Thoughts | Emergence Capital

G2 Crowd Joins the Emergence Family

October 11, 2018

How to Hack Your Way into a Proprietary Dataset

September 10, 2018

software continues eat world every company must become tech good news Declining cloud compute hosting costs open-sourced machine learning frameworks TensorFlow mean never cheaper easier build intelligent bad longer competitive differentiator table stakes enter Great Commoditization era CEO de-commoditize long term moat around business believe data gold separates winners also-rans next generation learning-driven datasets created equal Deep focused solving specific problems better large broad Dynamic constantly refreshing vastly superior static typically regardless size ultimately proprietary harder access replicate wider long-term fuel turn empty commoditized workflow rich defensible recommendation engines closed-loop set inputs drive outputs Generally speaking math works actions correlated outcomes recalibrated improve accuracy ads users click website bought going able train AI anything dataset especially starting Ground Zero starts rethinking relationship product collection series one-off exercises used inform strategy built core words time user engages collect interaction systematically make future usage across network Bradford Cross Merlon Intelligence describes flywheel products ensure capturing totally unique capture designed precisely serve needs models functionality meet customer value chain ensures customer's motivation aligned compound Building effective key achieving state nirvana call Compounding enters phase new add makes thus attracts customers etc model work effectively rethink base requires significant architecture technical legal security maximizing system Google Amazon formidable businesses known leveraging exciting opportunity use companies harvest sell instead help complete tasks Coaching Networks automate workers away augment real-time performing jobs Textio example startup initially recruiting space Hire optimizes job posts recruiters right people faster write highlights phrases suggest tweaks likelihood attracting targeted candidate profile posted tracks candidates apply automatically updates suggestions recruiter improves leads three years market amassed thousands collectively world's largest database 370 million strong writing user-driven start hacks Types placed along spectrum aggregation creation former existing pooled together interesting relatively straightforward hack result common end name suggests involve existed least structured manner tend rarer point Another dimension understood hacked hard others meaningful portion frame truly exclusive owns ultimate goal achieve using less started journey move quickly depend assets Established unstructured sets structure staff co-opt hackers Startups fewer definition often creative Indeed best founders extremely comes designing explore commonly Scraping non-proprietary Perhaps consists collecting publicly available scattered take form websites online databases offline Corelogic back public records government offices country packaged real estate players sums Pros easy low cost e.g web crawler allow volumes fast iteration Cons present issues check rules beforehand acquire output necessary close loop Partnering partnerships entities industry incumbents governments already talent focus exchange offer partners revenue shares partial IP ownership in-kind services old cash Tractable provides car accident repair processes success provide valuable closed input pairings barrier entry partnership involves exclusivity incumbent leverage unused asset towards cleansing serious tax financially legally well-structured deals providing free Crowdsourcing popular seed variety forms leaders asking teams photos create surveys label outsourcing Mechanical Turk tailor easiest cheapest Depending tactic scale important First two-step driving via looking ways captured Salesforce quintessential provider direction Einstein offerings monetize early traditional benefits SaaS perspective step challenging contracts need clearly sharing beginning bulletproof privacy team place layer boards synthetic assumed remained board inversely quality post filled allowed rough algorithm enough approach potential worked employers provided optimization historical hiring injection selling paying continued began spin CEOs everything freshly minted answer critical questions pursuing lead similar version article appeared Forbes

What Entrepreneurs Need To Know Before Securing Series A Venture Debt

September 4, 2018

Venture debt financing increased markedly recent years startups taken advantage low interest rate environment Despite surge activity largely misunderstood experienced entrepreneurs Emergence helped dozens secure different types facilities part comprehensive plan quick guide understanding negotiating Series facility consider flexible form provided banks dedicated funds early-stage option specified period time 12-18 months company draw predetermined amount capital exercises loan created plus needs repaid drawn senior equity first event exit bankruptcy falsely assume pursued last resort reality presents low-cost alternative offers several key attractive features funding options contrast non-dilutive secured quickly Second terms traditional example investors passive require board seats observer positions importantly provide additional choose use Given cash lifeblood startup believe critical execute However ones common case extend runway order achieve meaningful milestone prior fundraise considered replacement Rather companies complement effective raised shortly round due diligence materials ready lender making commitment based investor's enthusiasm great everyone default repayment covenants applicable providers force sell liquidate include available typically 2-4MM 25-40 Drawdown exercise responsible interest-only payments typical 9-18 Term allotted repay principal 24-36 ended annual paid tied WSJ prime 1 Fees various listed sheets including Prepayment charged early final payment fee required upon 3 closing costs complete process 5 10K Warrants right purchase shares company's preferred stock price represent 0.1 0.2 dilution either expressed ownership coverage warrant 6 line 2M strike 2 share receive 0.06 60 000 financial non-financial provisions reach certain target prevent specific decisions selling minimal nonexistent exist go securing best deal enlist assistance Ask recommend facilitate introductions three offer Silicon Valley Bank Square Bridge among prominent underwriting reputation investor 2-3 weeks interested conduct submit sheet optimizing flexibility else result focus following advise far possible enables longest delays upside lenders offering cost negotiate away completely structure align interests versus push portion issued balance proportionally amounts least 9 Sometimes requires adding milestones feels comfortable unlocking larger earn return eliminate motivation opt lower identical timing extends addition provider partner long ascertain worked similar clients past understand services benefit international banking corporate credit cards Finally important act downside scenario invaluable critically need

The 5Ms: How Emergence Evaluates Series A Pitches

August 1, 2018

Learn Management Market Metrics Moat M-Factor matters first significant infusion capital Series investment marks pivotal moment life startup accelerate entrepreneurs toward vision Emergence evaluate 1 000 pitches enterprise cloud every year means logged 10 000+ Malcolm Gladwell hours last decade safely say experts evaluating early stage companies 5M framework opportunities attributes matter long term success 01 Powering promising company exceptional team look teams possess five superpowers successful intense passion deep focus super speed charismatic accelerated learning often find strong team-problem fit expertise within industry opportunity gives startups huge advantage focusing right iterating quickly pivoting completely securing customers key employees Veeva Systems entirely based founding platform sciences started Peter Gassner CEO Matt Wallach President Peter's experience PeopleSoft taught build foundation scaling role Salesforce exposed power gained GM Siebel pharmaceuticals biotechnology division complementary formed cornerstone today 12B public best venture investments time uniquely positioned capitalize 02 Unicorns need ample room run target large enough near 1+ billion revenue addition size positive dynamics example avoid highly competitive markets low barriers entry actively seek undergoing dislocations provide fertile ground disrupt status quo Finally tailwinds startup's go-to-market adoption invested videoconferencing Zoom knew targeting replacement software WebEx telepresence hardware Polycom sizing IDC projected 7B took mobile wedge users wanted smartphone video conferencing cheap tablet control conference rooms Second able leverage freemium business model rapidly user introduced product twenty-two new average simply using meetings big now harness unlock 03 important validation assure path expect investor diligence basic operating financial quick guidelines Unfortunately lagging indicators indicative future Thus sub-metrics predictive examples spent want see upward trend benchmark versus similar products Engagement frequency Weekly active monthly 50 NPS 40+ Gusto 60+ Pipeline Health Win rates 25 3x weighted coverage increasing steady CPL Sales Velocity Ramped quota attainment vs expectation 80 rep ramp improving Customer Cohorts retention general newer perform better older larger outperform smaller multiple beat SalesLoft months launched real traction identified three charts spending corporate email combined showed concretely show end creating 90 days post-implementation prior though meet criteria traditional unanimous enthusiasm bet amazing strategy assumptions proven data scale working repeatable machine 04 Iconic stand test must defensive trench protects core disruption competition types moats effective network effects record proprietary intelligence True incredibly rare extremely powerful Project44 logistics enables freight shippers Electric carriers FedEx connect via API integration shipper carrier joins increases value member expanding network's reach result grown dominant experiencing less lifetime churn 2000s idea evolve system Salesforce's created hundreds providers built integrations resulting workflows top nearly impossible competitors replicate final particularly AI recruiter Mya incredible building Mya's conversational powers millions annual hiring conversations languages 120 conversation outcome trains pushes engine ahead 05 4 M's make solid However invest partnering going truly world-changing call factor short unique attribute makes inevitablity mind meld entrepreneur's know inevitable Aaron Levie Box proposition strategic command 50x incumbent buy Yammer channel partnership source demand generation creates unstoppable Doximity catapult conclusion aspire partner change world works one-size-fits-all recipe found 5M's predictor