Welcome to startups Weekly, a new version of the human being on the news and trends starting this week. To get this delivered to your inbox, subscribe here.
Tech founders and emerging investors must be exuding extreme energy from the main character, because this week in tech was all about making your life easier.
AngelList announced the AngelList Stack, a new suite of products that will compete with Carta in providing services to help founders start, operate and maintain ownership of their companies. The new software will cover four bases: end-to-end onboarding, commercial banking, advisor capital grants, and limit table management.
Here’s why AngelList isn’t concerned about Carta, according to CEO Avlok Kohli:
There are many experiments around point solutions, around solving different problems for different point problems for the founders. Our opinion is that the founders prefer to always be integrated into a single package.
Moving into the world of founder support was a surprising but sensible move for AngelList, according to my Twitter DMs. The startup spent the last year growing its risk services business, after piloting mobile funds, which allow LPs to back investors on a quarterly subscription model. Speaking of mobile backgrounds, one of the first to launch was from Sahil Lavingia, the founder and CEO of Gumroad. He had some news of his own with AngelList this week, albeit in the world of explorers or people seeking venture capital investor deals.
Lavingia is launching a new scout pool with AngelList in which each scout gets their referral contract (5%) and an additional 5% across the entire startup pool. In other words, he redirected 33% of his carry, or how much money the fund makes from portco outings, to his scouts.
The scout fund is unique because while most funds may have scout programs today, it is still very rare to share the carry with scouts in a group. other individual perspective.
He explained why it is important on a personal note: paper traces.
I want to go very broad with this and build a very different kind of scouting coalition. If you can prove your worth and get a paper proof that you have, I can help you connect to this ecosystem.
[Even with crypto] you are seeing the financialization of all these relationships. Before, there’s kind of an informal handshake, pay-in-advance thing that happens in Silicon Valley, whereas with cryptocurrencies, it’s like “I’ll buy it this transactional way knowing what the incentives really are.” I’m sending you this deal, but let’s face it: this is a business transaction and I’m sending you this deal, so I think it’s good to code it.
In fact, I don’t mind that I don’t make money off Pinterest, but what’s frustrating at times is that an LP doesn’t value the fact that I sent an investor to Pinterest. [when it was valued at $5 million].
As Lavingia hints, a common thread between their effort and AngelList’s is that they both want to formalize the processes, whether it’s starting a business or presenting one to an investor. It’s hard to argue philosophically against more transparency and distribution in entrepreneurship, but it’s also hard to achieve those goals in a way that truly helps those who need it most.
Think of it like this: AngelList wants to make it easier than ever to start a startup. But for whom? Lavingia thinks it’s great that scouts are fully charging the companies they spot and therefore build a track record. But what if the scouts are the same people who could probably start a moving background if they wanted to? I am always concerned that new bets, whether it is a company that is completing or an investor who shares more of their carry, will want to eliminate the risk of built-in volatility. In the end, democratizing access requires betting on historically overlooked people, and that is a risk that, clearly, the company does not do often.
That is why AngelList and Lavingia have to be bold when building these new projects. Optionality (and affordability) is key when trying to use it in a new generation of innovators. But, they must ignore the status quo of who served in the past. Hell, they even need to take a page out of the crypto playbook.
In the rest of this newsletter, we’ll talk about the impact of frozen yogurt on consolidation, benefits in the workplace, and a refresher on blitzscaling. As always, you can find me on Twitter. @nmasc_ or listen to me in fairness.
Workplace benefits, meet Alicia Keys
As the pandemic drags on, employees are seeking a broader purpose or are simply exhausted by the uncertainty and outdated culture of their current jobs. And consumer education technology is catching on.
This is what you need to know: Outschool and MasterClass are quietly teaming up to sell their services to employers, rather than going straight to end users like in the old days. Similar to other sectorsEdtech wants to update the way it sells to consumers, but it will run into “point-of-solution benefits fatigue” when it knocks on companies’ doors.
Work work work:
Consolidation everywhere, always
This week on Equity, we moved on from a conversation about comprehensive approaches, like the ones above, to how consolidation seems to be everywhere these days. There are layers, or as the Equity team would like to say, flavors, to think about.
This is what you need to know: We use cold-yo ingredients as a way to understand whether it makes sense for startups to be point solutions (they give you the best of a flavor) or complete solutions (they give you the medium option, but they offer everything). This mindset helps drive whether consolidation makes sense from a horizontal or vertical perspective. And the conversation started with an RPA space deal.
When mergers and acquisitions disappear:
Reid Hoffman wants to talk
I’m still reflecting on a conversation I had with Reid Hoffman last week during TechCrunch Disrupt. The founder of LinkedIn joined us on the same day that Greylock, where he is an investment partner, announced a $ 500 million seed fund. So, there was definitely a lot to talk about.
This is what you need to know: Even though Hoffman is ironically increasing the vast capital of today’s market, one of his strongest messages was staying focused.
An excerpt from my piece:
When LinkedIn co-founder and Greylock partner Reid Hoffman first coined the term “blitzscaling,” he kept it simple: It’s a concept that encourages entrepreneurs to prioritize speed over efficiency during a period of uncertainty. Years later, the founders are going through a pandemic, perhaps the most uncertain period of their lives, and Hoffman has a clarification to make.
“Blitzscaling itself is not the goal… blitzscaling is ineffective; you are spending capital inefficiently and hiring inefficiently; you are not sure of your business model; and those are not good things. ”Instead, he said, blitzscaling is a choice that companies may have to make over a set period of time to outperform a competitor or react to a pandemic rather than a route to take from the idea until IPO.
I buried the led here, but this week we announced that ExtraCrunch will be changing its name to TechCrunch +. We’re doing this to better take advantage of the TechCrunch brand, but also because we don’t think our parts, most of which help provide signal in the middle of noise, are “extra.” Instead, as our team says, it is the stake. Also, it is a super cute logo.
Seen on TechCrunch
Current and former employees raise significant safety concerns, sexual harassment allegations at Blue Origin
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TikTok starts flirting with NFT
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Seen on TechCrunch +
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Scaling series A to C
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Startups have more options than ever to reduce their dependence on venture capital