Morgan Beller, co-creator of the Libra digital currency, just joined the venture firm NFX

Morgan Beller, who is a co-creator of the proposed Libra digital currency, along with Facebook vice presidents David Marcus and Kevin Weil, has left the company to become a general partner with the venture firm NFX .

In a call yesterday, she said she first became acquainted with the San Francisco-based outfit five years ago when on a “tech trek” to Israel, she met its local partner, Gigi Levy-Weiss, and formed a friendship with him.

At the time, she was a young partner at Andreessen Horowitz, working on its deal team after graduating from Cornell as a statistics major.

A role working on corporate development and strategy at Medium would follow, then it was on to Facebook in 2017, where Beller began in corporate development and — intrigued by cryptocurrency tech — where she quickly began evangelizing to her bosses the importance of better understanding it.

As she half-jokingly explains it, “Crypto is a mental virus for which there is no cure. I was at a16z when they got infected with the crypto virus.” She eventually caught it herself, and by the time she joined Facebook, she says she “realized no one was thinking about that space full time, so I took it upon myself to [help the company] figure out its point of view.”

Indeed, a CNBC story about Beller last year reports that at one point, she was the sole person on a Facebook blockchain initiative —  meeting with those in the know, attending relevant events, and otherwise researching the technology. Bill Barhydt, the CEO of the digital wallet startup Abra, told the outlet of Beller:  “I give her a lot of credit for taking what seems like a very methodical, long-term approach to figuring this out.”

All that said, Beller notes that as a full-time investor with NFX, she will not be focused exclusively or even mainly on crypto. Her focus instead will be finding and helping to cultivate seed-stage startups that aim to grow so-called network effects businesses.

It’s the broad theme of NFX, a now 25-person outfit cofounded five years ago by serial entrepreneurs who have all seen their companies acquired, including Levy-Weiss (who cofounded the online travel site Lastminute.com, and the social casino game publisher Playtika); Pete Flint (cofounder of the home buyers’ site Trulia); and James Currier (of the social network Tickle).

Certainly, she will keep busy at the firm, she suggests. As part of getting to know the partners and their thinking better, she introduced them to one company that they have since funded.

The pace has generally picked up, Flint tells us, saying that during the second quarter of this year and the third, NFX has twice broken its own investing records both because of “incredible founders who are reacting to this opportunity” and growing awareness about NFX, which last year closed its second fund with $275 million.

Last month, for example, NFX led a seed round for Warmly, a nine-month-old, San Francisco-based startup whose product tracks individuals in a customer’s CRM system, then sends out a notification when one of his or her contacts changes jobs. It also led a round recently for Jupiter, a year-old, San Francisco-based grocery delivery startup.

Naturally, Beller’s new partners are full of praise for her. Flint says the firm began looking for a fourth partner two years ago and that it has “spoken with dozens of exceptional people” since then, but it “always came back to Morgan.”

As for why the 27-year-old is ready to leap back into VC, Beller says that her work across Facebook and Medium and a16z “made me realize my favorite parts of projects is that zero-to-one phase and that with investing, it’s zero-to-one all day” with a team she wanted to be part of.

Further, she adds, while at Facebook, she was helping scout out deals for the venture firm Spark Capital, so she’s already well-acquainted with the types of founders to which she gravitates. “They’re are all weird in the right ways, and they’re all maniacally obsessed with winning.”

As for how she launches her career as a general partner in a pandemic, she notes that she loves walking and that she’ll happy cover 20 miles a day if given the opportunity.

“If anyone wants to safely walk with me,” she suggests that she’d love it.  Says Beller, “I’m not worried about San Francisco longer term. I don’t think there’s a replacement for in-person meetings.”

#andreessen-horowitz, #cryptocurrencies, #facbook, #fundings-exits, #libra, #medium, #nfx, #novi, #recent-funding, #spark-capital, #startups, #tc, #venture-capital

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Six things venture capitalists are looking for in your pitch

Founders pitch venture capitalists at every available chance, which is why most of them quickly develop the skills required to identify whether someone is offering them an opportunity or wasting their time.

At TechCrunch Early Stage, I chatted with NFX Managing Partner James Currier about how founders can find the right investors and what they need to show to win an investment. Currier has been on both sides of the deal table and founded several startups before devoting himself to early-stage investing, where he has backed companies like Lyft, Houzz and Houseparty .

“One of the ways that investors are similar is that whenever they look at all the companies coming to them, most of them get into a quick ‘no’ situation, some of them get into the ‘maybe’ and very few get into the quick ‘yes,’ ” Currier says.

He shared six reasons investors might give a founder the rare and highly coveted “quick yes,” an effort to lock down a deal that’s either perfect for them or too enticing to pass up. Realizing what exactly investors are seeking can help founders understand how to pitch at the first meeting and what they should leave for follow-ups. For those who couldn’t virtually attend TechCrunch Early Stage, check out the link below.

This interview has been lightly edited for clarity. 

1. Traction

“So the first thing that they’re looking for is traction. Look, even if they don’t like you, if they don’t like the market, but you’re making a ton of money, what are they going to say? Like if it’s growing really quickly and you’re profitable, you’ve got high margins and everyone wants to work for you, and there’s this buzz around you. What are they going to say? They’re gonna have to invest because you’ve got traction.”

#corporate-finance, #economy, #entrepreneurship, #extra-crunch, #funding, #fundraising, #houseparty, #houzz, #iphone, #james-currier, #lyft, #nfx, #private-equity, #startup-pitch, #startups, #tc, #venture-capital

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La Haus is bringing US tech services to Latin America’s real estate market

The alchemy for a successful startup can be hard to parse. Sometimes, it’s who you know. Sometimes it’s where you go to school. And sometimes it’s what you do. In the case of La Haus, a startup that wants to bring U.S. tech-enabled real estate services to the Latin American real estate market, it’s all three.

The company was founded by Jerónimo Uribe and Rodrigo Sánchez Ríos, both graduates of Stanford University who previously founded and ran Jaguar Capital, a Colombian real estate development firm that had built over $350 million worth of retail and residential projects in the country.

Uribe, the son of the controversial Colombian President Daniel Uribe (who has been accused of financing paramilitary forces during Colombia’s long-running civil war and wire-tapping journalists and negotiators during the peace talks to end the conflict) and Sánchez Ríos, a former private equity professional at the multi-billion-dollar firm Lindsay Goldberg, were exposed to the perils and promise of real estate development with their former firm.

Now the two entrepreneurs are using their know-how, connections and a new technology stack to streamline the home-buying process.

It’s that ambition that caught the attention of Pete Flint, the founder of Trulia and now an investor at the venture capital firm NFX. Flint, an early investor in La Haus, saw the potential in La Haus to help the Latin American real estate market leapfrog the services available in the U.S. Spencer Rascoff, the co-founder of Zillow, also invested in the company.

“Latin America is very early on in its infancy of having really professional agents and really professional brokerages,” said Flint.

La Haus guides home buyers through every stage of the process, with its own agents and salespeople selling properties sourced from the company’s developer connections.

“The average home in the U.S. sells in six weeks or less,” said La Haus chief financial officer Sánchez Ríos in an interview. “That timing in Latin America is 14 months. That’s the dramatic difference. There is no infrastructure in Latin America as a whole.”

La Haus began by reaching out to the founders’ old colleagues in the real estate development industry and started listing new developments on its service. Now the company has a mix of existing and new properties for sale on its site and an expanded geographic footprint in both Colombia and Mexico.

“We have a portal… that acts as a lead-generating machine,” said Sánchez Ríos. “We aggregate listings, we vet them. We focus on new developers.”

The company has about 500 developers using the service to list properties in Colombia and another 200 in Mexico. So far, the company has facilitated more than 2,000 transactions through its platform in three years.

“Real estate now is turning fully digital and also in this market professionalizing,” said Flint. “The publicly traded online real estate companies are approaching all-time highs. People are just prizing the space that they spend their time in… the technologies from VR and digital walkthroughs to digital closes become not just a nice to have but a necessity. “

Capitalizing on the open field in the market, La Haus recently closed on $10 million in financing led by Kaszek Ventures, one of the leading funds in Latin America. That funding will be used to accelerate the company’s geographic expansion in response to increasing demand for digital solutions in response to the COVID-19 epidemic.

“Because of Covid-19, consumers’ willingness to conduct real estate transactions online has gone through the roof,” said Sánchez Ríos, in a statement. “Fortunately we were in the position to enable that, and we expect to see a permanent shift online in how people conduct all, or at least most, of the home-buying process. This funding gives us ample runway to build the end-to-end real estate experience for the post-Covid Latin America.”

Joining NFX, Rascoff, and Kaszek Ventures are a slew of investors, including Acrew Capital, IMO Ventures and Beresford Ventures. Entrepreneurs like Nubank founder David Velez; Brian Requarth, the founder of Vivareal (now GrupoZap); and Hadi Partovi, CEO and founder of Code.org, also participated in the financing.

“We backed La Haus because we saw many of the same ingredients that resulted in a fantastic outcome for many of our successful companies: A world-class team with complementary skills; a huge addressable market; and an almost religious zeal by the founders to solve a big problem with technology,” said Hernan Kazah, co-founder and managing partner of Kaszek Ventures. 

#acrew-capital, #colombia, #david-velez, #hadi-partovi, #kaszek-ventures, #la-haus, #latin-america, #mexico, #nfx, #nubank, #online-real-estate, #pete-flint, #real-estate, #recent-funding, #spencer-rascoff, #stanford-university, #startups, #tc, #trulia, #united-states, #vivareal, #zillow

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Bearish VCs, bullish founders and changing investing trends

During the early days of the COVID-19 pandemic, concern was high, public markets were suffering and it wasn’t hard to find wags on Twitter declaring that the world had changed and startup valuations were now off 40% — if you could put a round together.

But last night, we reported that more startups than expected were raising new capital at a higher valuations than prior rounds, an event often called an “up round.”


The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.


The data looked remarkably steady. As Connie Loizos wrote, “so-called up-rounds only declined modestly, from 72% [of Silicon Valley financings] in March to 70% in April.” Hardly doom and gloom.

The notion that the funding environment is not as bad as it was anticipated has been borne out in other data, including what appears to be a falling pace of startup layoffs. Perhaps the world is not falling for private, growth-oriented companies that we tend to call startups?

The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.More data helps fill in the picture. Surveys from NFX, a San Francisco-based seed fund, and DocSend, a platform that some founders use to distribute pitch decks, detail how sentiment has changed amongst founders and investors alike. There’s some good news in the collected sentiments, albeit with a few warning signs as well.

What seems clear from the reports is that the purported startup apocalypse hasn’t come, provided that they weren’t serving, or working in a sector of the economy that zeroed-out due to COVID-19.

Let’s dig into the numbers to better ground our understanding of how entrepreneurs and venture capitalists really view —and disagree on — today’s private markets.

Concerns and realities

TechCrunch covered the first NFX COVID-19 survey back in April, writing at the time that founders seemed a little more optimistic than venture capitalists when it came to the economy’s rebound and their short-term fortunes.

#coronavirus, #covid-19, #docsend, #extra-crunch, #fundings-exits, #market-analysis, #nfx, #seed-stage-startups, #startups, #tc, #the-exchange, #venture-capital

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As Americans look to escape, this peer-to-peer RV rental startup is happy to accommodate them

The world feels as fragile as ever, and those with any options at all are looking to get away this summer.

For many, planes and hotel rooms won’t be an option they consider owing to continued concerns about the coronavirus (not to mention the expense, which 40 million fewer Americans can likely afford). That leaves perhaps renting a local Airbnb this summer or, for a growing number of people, looking for the first time to rent an RV or camper van, including as a way to visit far-flung family members who might otherwise be unreachable.

Last week, we talked with Jeff Cavins, a serial operator and the cofounder and CEO of a company that’s poised to benefit from the latter trend: Outdoorsy, a peer-to-peer RV rental company that was founded in 2015, bootstrapped by its founders for a couple of years, and has more recently attracted $88 million in venture funding, $13 million of it an extension to a $50 million Series B round that it quietly closed early this year.

We wanted to know what trends the company — which collects fees from both the vehicle owners and the renters on its platform — is seeing, including how its customers are changing and where they’re looking to park themselves this summer. Below are some excerpts from our chat, edited lightly for length.

TC: How has your model changed because of the coronavirus?

JC: We had typically seen an average rental on our platform would run about six days. That’s now over nine days. With COVID, as  with many other companies, we saw a lot of de-bookings in the platform, but then they all roared back and then some. We’ve seen a 2,645% increase in bookings from the low point of COVID, which was late March, to right now.

TC: What percentage of those booking trips are first-time customers?

JC: In the month of May, 88% of our bookings were by first-time renters, which is a record for us. And more than half of them have come back and already booked their second trip. So some booked in May; they went away for the Memorial Day weekend [and] came right back. And they booked another one for, in this case, like the Fourth of July or [trips in] June. As you know, a lot of people are at home with their kids, so everybody in America has this big, long extended summer break. And with the kids, they’re finding this is the safer option for travel.

TC: Are their expectations different? Are they looking for certain things that maybe more seasoned RV campers wouldn’t think to ask?

JC: The big trend that we’re seeing in the RV industry, and this is not unique to America, is the new consumers don’t want those big land barges. What they want are camper vans, because the average user on our platform is under the age of 40, which was a big surprise to this industry because it’s always leaned a little bit towards the Boomer or the retiree demographic. And they like camping off the grid. They like to operate with vehicles that feel comfortable to them, that have a smaller footprint, that are easier on the environment. And so things that have become popular are solar power, potable water that can be transportable, hookups for mountain bikes, sporting gear . . . They also to be able to head to unique locations where they can build those Instagram mobile moment. So we’re starting to see that trend, and it has become a global phenomenon.

TC: When we last talked, in January of last year, Outdoorsy had around 35,000 vehicles available to rent on the platform. How many are on the platform now?

JC: We have 48,000 peer-to-peer listings; when we add our international users and we have a lot of these mega fleets that are connected to our site via an API like Indies Campers or Jucy, that puts our our supply at 68,000 units.

TC: And how are you making sure that these vehicles are free of germs and don’t transmit diseases?

JC: Cleanliness is a big factor for any form of accommodation. In our case, we’ve been producing for our listing community CDC guidelines on cleaning standards. We’ve asked our owners to place additional time between rentals so they can let the vehicles take time to manually disinfect. One of the our investors at our company is a molecular biologist [whose] doctoral thesis at Harvard won the Nobel Prize for chemistry and he’s been helping us communicate with our owner community on things like these new ultraviolet radiation lamps that are common. You’ll see them installed in ambulances . . . if you let them set for a while, they will help completely decontaminate the environment.

We’re also encouraging renters to bring cleaning supplies with them if they you know A lot of people will feel much more safe if they’re able to control their environment. And we’ve started a contactless key exchange, [meaning] the owner will deliver the vehicle to a campsite, put up the awning, the camping chairs, and so on. And then the renter will come later.

TC: You mentioned changing user behaviors. Out of curiosity, are you you seeing renters who aren’t heading to Yosemite or Yellowstone but instead to an RV down the street so they can, say, work apart from young children?

JC: One of the things that we’ve seen is, I may live in San Diego, for example, and grandma lives in Kansas City, and there’s no way for the kids to go see her. So camper van and RV travel has become that way for families to see those loved ones they haven’t been able to see during quarantine and maintain family connectivity.

TC: You mentioned de-bookings earlier this year. Did you have to lay off staff?

JC: We had about 160 employees prior to COVID. And we did do some right sizing. Most of the impact in our organization was in our international markets — we had a  team in Italy, Germany, France, UK, Australia, New Zealand [that were cut].  In terms of our domestic employees, rather than cuts, we sat down with the team and said, ‘If everybody is willing to take a salary adjustment, we will reward you with more equity in the business. This could be a period of time where we save those jobs around us.’

I work with no income; I don’t have a salary.  And there are a few other executives who elected to do [forgo theirs]. So it was a way to align our employees with our investors by compensating them more in equity.

TC: As business picks up again, are you thinking about another round of funding?

JC: There is no plan to [raise more right now]. We were profitable in the month of May. We’ll be profitable again in the month of June. Unless there’s a second wave of COVID and lockdowns, our booking activity is now foretelling a profitable July, August and September, so we’ll possibly produce a year-on-year fiscal profitable year.

The ones we typically get inbound activity from are the late-stage growth investors. We’ll all sit down with the board and we’ll talk about it and decide: do we want to do something with that or just want to just keep, you know, chopping wood as fast as we can on our own?

#altos-ventures, #aviva-ventures, #covid-19, #greenspring-associates, #nfx, #outdoorsy, #rv, #tc

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LeverEdge wants to get you and your friends a volume discount on student loans

Student loans are both a trillion-dollar debt category and also one of the most popular mini-verticals out there in fintech startup investing right now. There are dozens if not hundreds of companies in the space, and they all mostly do one of two things: either they help students think through their student loan options before choosing one (acting as a financial advisor to avoid mistakes) or they help students after they finish school figure out how to optimize their repayments or acquire loan forgiveness.

And so when I heard the pitch for LeverEdge, I was intrigued, because it really doesn’t fit either bucket.

Rather than approaching each user individually and trying to optimize their own financial decision independently, LeverEdge proposes helping students band together as a group and negotiate reduced student loan rates by essentially acting as a collective bargaining unit with banks.

For founders Chris Abkarians and Nikhil Agarwal, the idea came as they were entering Harvard Business School.

The two connected with some other HBS students through online new admit groups on Facebook and came up with the idea of trying to work together to lower their interest rates. The annual cost of attendance at HBS is $111,102 right now (annually!), so multiplied by two for the two-year MBA and you are looking at potentially massive cost savings if you can lower your interest rate.

There was just one problem: banks loved the idea, but no one knew how to actually negotiate interest rates at individual branches. As Agarwal explained, “So after work we would try to leave at a reasonable time to get to the bank branch before it closes and then pitch the branch manager on this. They were super excited, but then they’d be like, well, I don’t know what to do with this, I can’t change interest rates for you.”

So Abkarians started sending cold emails to bank CEOs with the same proposition, and also got a positive response, but was told that he would need much more volume to make a negotiated deal worthwhile for banks. At the time, the two only had 50 to 70 people working together, but they spread the option around more heavily with their classmates and students at other business schools and eventually got to 700 students with $26 million in loan volume over the next 10 days.

With that scale, the two were able to negotiate a competitive rate with a bank that saved each student an average of $15,000 in fees over the full life of their loans according to their calculations.

They did all this entirely virtually too. Abkarians and Agarwal eventually met for the first time in person at Harvard in the fall, still with a whirl of excitement over what had transpired over the summer. They started asking for feedback from their users about the process, and Agarwal said:

The number one negative feedback we got was you closed the deal on July 26, [but] I couldn’t use it because my tuition due date was before that day. And then every other piece of feedback — even for this haphazardly run group — was incredibly amazing. And that really convinced us [… that] we owe it to our members and really the future generation of classes to make this a thing.

LeverEdge is taking that one-off experience and systemizing it for more students in more contexts. The startup, which was officially founded in May 2018, targets the private student loan market outside of federal programs typical for most undergrads. That loan market typically has higher (and sometimes dramatically higher) interest rates than traditional federal student loans, and lenders also has the flexibility to negotiate interest rates unlike with federal loans.

Today, LeverEdge has more than 15,000 students on its platform and has financed $100 million in student loans according to the startup. It also raised a $2.5 million seed round led by NFX along with Global Founders Capital and founders from fintech companies Earnest and SoFi.

The company spends most of the year aggregating students for the next school year, and then “we spend around two months in this auction process between different lenders,” Abkarians said. The company currently has nine employees, and “our staff is focused on partnership building,” he said.

The new version of a startup team photo. LeverEdge Team, photo via LeverEdge

As for business model, LeverEdge takes a pre-set referral fee from lenders upfront for each tranche of loans that they negotiate between students and the lender. That fee is “non-negotiable” according to Agarwal, and all lenders participating in the auction agree to pay it if they have the winning bid. The company varies the fee based on the loans that are grouped together (Agarwal said that, for example, refinance loans have a lower referral fee than other student loans). He believes this approach ensures that LeverEdge always has the right incentives to get the best prices for students.

Importantly, no student is obligated to take the final loan as negotiated by LeverEdge. But, if the company is doing its job, then the offered loan should be competitive with any alternative loan on the market. “We still encourage people to compare it against other things and if they find anything that is better than what we’ve found to please just let us know. No one has yet,“ said Abkarians.

The big question now is what will happen this coming school year given COVID-19. On one hand, students may avoid campuses knowing that schools are moving heavily toward virtual classes due to social distancing policies. On the other hand, economic recessions and greater concerns around costs may lead more students to seek out cheaper student financing options: exactly the customers that LeverEdge wants to find.

Overall, it’s an interesting play on the student loan space and one of the more interesting fintech startups I have seen in some time.

#debt, #finance, #funding, #fundings-exits, #global-founders-capital, #nfx, #startups, #student-loans

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7 VCs discuss how COVID-19 is changing the media startup landscape

The world has changed dramatically since May 2019 when we last surveyed venture capitalists about the trends they were seeing in media, entertainment and gaming.

Since then, COVID-19 and the resulting physical distancing measures have created plenty of demand for companies helping to inform and entertain us as we’re stuck at home. At the same time, there’s a dramatic reduction in ad spending, making it harder to monetize that consumer attention.

So we checked in a variety of top VCs about the new landscape, where they’re investing and what kind of advice they’re giving their portfolio companies.

Not all of them invest directly in what (paraphrasing Betaworks’ Matt Hartman) we might call media media — the companies whose business models revolve around content creation and advertising — but each of these investors are backing startups looking to change the way we stay connected and entertained.

Here’s who we surveyed:

  • Kevin Zhang (Partner, Upfront Ventures)
  • Pär-Jörgen (PJ) Pärson (General Partner, Northzone)
  • Vasu Kulkarn (Partner, Courtside Ventures)
  • MG Siegler (General Partner, GV)
  • Jana Messerschmidt (Partner, Lightspeed Venture Partners)
  • Matthew Hartman (Partner, Betaworks Ventures)
  • Gigi Levy-Weiss (Managing Partner, NFX)

The consensus? You can’t count on the ad business to recover in the next few months, but there are still opportunities for startups exploring new formats and new business models. And there’s still plenty of excitement about gaming and esports.

You can read their full responses, lightly edited, below.

Kevin Zhang, Upfront Ventures

What (if any) media trends are still exciting you from an investing perspective?

Live and interactive formats, especially shorter form, continue to be very exciting, made even more evident in this time of shelter-in-place. What has worked in China and broader Asia has not yet translated into explosive success in the West. As interesting as celebrity live broadcasts are from their homes, the lack of real interaction and participation features hampers long-term engagement and doesn’t make up for the lack of production quality.

Modern content production technology is needed to push both production and live ops cost down while enabling more interactive and engaging formats. Game engines are one example, there’s of course the Travis Scott concert that just happened in Fortnite built on the Unreal engine, but that 15-minute, pre-rendered show took months to create, we’re only just scratching the surface of what’s possible.

One of our investments in this space is Tellie for live-action formats, another is The Wave for rendered, live formats, and we continue to look for great combinations of tech and media talent innovating on new formats.

Speaking of gaming, multiplayer games continue to grow and grow exponentially, there is a lot to unpack in popular titles from new favorite Animal Crossing to classics like World of Warcraft to indie hits like For the King. They all have social cooperation as a core part of the game loop and design. I’d love to see more teams working on cooperative play and just overall a broader diversity in multiplayer experiences beyond purely competitive ones.

#betaworks-ventures, #coronavirus, #courtside-ventures, #covid-19, #events, #extra-crunch, #funding, #gv, #investor-surveys, #lightspeed-venture-partners, #market-analysis, #matthew-hartman, #media, #mg-siegler, #nfx, #northzone, #par-jorgen-parson, #startups, #upfront-ventures, #venture-capital

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This venture firm is offering fast funding in a time of uncertainty

The early-stage venture firm NFX is launching a seed-funding initiative today that invites founders to apply for seed funding of $1 million to $2 million in exchange for 15% of their company.

Why is this interesting? It’s not because of the size stake that NFX is taking, though 15% is notable for remaining fair in a market where founders are suddenly facing serious headwinds.

The special catch is that NFX says founders who apply will receive a commitment in nine days or less.

It’s a touch gimmicky. It’s also a smart stance for a firm to take so publicly, during what’s surely a trying period for founders who aren’t already connected to venture firms.

As we’re written before, the public markets have tanked, making it harder for the money behind venture capitalists to get excited about seeing more money funneled right now into highly illiquid startups.

As many VCs have noted in recent weeks, it’s also a challenge for them to adjust to a world without the face-to-face meetings on which they are so reliant. Neil Sequeira of Defy Capital, for example, recently told us his firm has been actively investing since early March, but he readily admitted that, “In every case when we’ve been able to move really quickly, we’ve actually known the founders for the most part for a decade.”

Ellie Wheeler, an investor with Greycroft, echoed the sentiment during a panel discussion last week, asking, “How do you mimic what you pick up from spending time together casually and formally [with a founder seeking capital]? I don’t think people have figured that out.”

Even with some taking to Twitter to advertise that they are, indeed, open for business, others say they’ve been a little busy in recent weeks, trying to find soft landings for, or extend the runway of, existing portfolio companies. (The startup industry has also been grappling with how to extract funding from the government’s $349 billion paycheck protection program.)

Enter NFX with a new initiative that firm swears it was going to roll out anyway but that’s timed especially well for this very moment in time.

Here’s how it works. Last year, NFX — founded by James Currier, Pete Flint and Gigi Levy-Weiss, operators who’ve been involved, respectively, in the founding of the social network Tickle, the home buyers’ site Trulia, and the online travel site Lastminute.com — closed its second fund with $275 million.

It planned to use that capital to fund between 15 and 20 companies per year. Now, NFX — which is based both in the Bay Area and in Israel, where Levy-Weiss lives — is carving out $20 million from that pool for this new enterprise, which will almost double its investing pace.

“We’re really leaning into this environment,” said Flint yesterday on a Zoom call that Currier also joined.

How it will invest that $20 million isn’t so unique to NFX, which is accustomed to working with and meeting founders remotely because of its own distributed team.

As Currier explains it, “A lot of this is just carving out enough time to talk on Zoom with the founder about who they are, and how they think.” The firm also calls others who can talk about the individual’s strengths and weaknesses, and it talks with more of the startup’s team online, which Currier believes can be a richer and more informative experience than merely meeting with a founder who has flown in from L.A. or New York by himself or herself to pitch investors.

In fact, VCs may soon discover that there are advantages to seeing a founder in their home, adds Flint.

“Remote work from home has the consequence of getting to understand the full person — not just how they [present] at the office but how they spend their time and what their kids are doing,” he says.

“You avoid this manufactured pitch process and you can have more authentic conversations about what they want to do with the next 10 years of their life. If a kids barges in, that’s just fine. It reduces the fundraising theater we [as an industry have] built up over the years.”

Unsurprisingly, some sophisticated software should also help the firm, which in the past has indexed heavily on internal platforms that help its portfolio companies.

They need only upload a deck (here), answer 12 questions, and record a one-minute video of themselves and their team. The idea is to quickly and clearly extract information that’s often hard to pull out of a pitch meeting.

After that, NFX promises feedback within three business days and a final investment decision within nine days.

Whether or not it leads to the Next Big Thing can only be answered in time. In the meantime, NFX may well see a lot of interesting ideas.

If they see some terrible business plans, too, presumably that’s also okay, given the goodwill the move is likely to generate.

“Other investors are pausing or saying they’re pausing,” says Flint. “But we’re increasing the rate at which we’re investing and putting structure around [our investments] and making it easier for founders to get money quickly.

“We think it’s a great time to start or scale a company, and we want to be that partner right now.”

#coronavirus, #covid-19, #james-currier, #nfx, #pete-flint, #tc, #venture-capital

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