Browsing Tag: Startups

    Startups

    Cultivating adaptability is a pandemic coping skill

    April 4, 2020

    It’s no secret that adaptability has become a critical trait for knowledge workers. To stay on top of a rapidly evolving world, we must assess new situations, make intelligent decisions and implement them effectively.

    A 2014 research report by Barclays indicated that 60% of employers say adaptability has become more important during the last decade, and BBC called adaptability the “X factor” for career success in an era of technological change.

    But even the most intrepid executive, entrepreneur or freelancer would be forgiven for struggling to adapt to a global pandemic. The impact of coronavirus has been unrelenting: hospitals at capacity, students sent home, conference cancellations, sold out inventory, markets in free fall and cities under lockdown.

    Whatever you thought 2020 was going to look like, you were dead wrong. Box CEO Aaron Levie and Stanford professor Bob Sutton’s recent Twitter exchange said it all:

    This moment requires us to learn new skills, develop new habits and let go of old ways of working. In the book “Range,” there’s a chapter about “dropping familiar tools” that details how experienced professionals will overlearn specific behavior and then fail to adapt to a new circumstance. This mentality affected everyone from firefighters to aviation crews to NASA engineers, often with deadly results, and underscores how hard it can be to adapt to change.

    To help us cultivate adaptability in this unprecedented moment, I sought answers in unexpected places. Here’s what I learned.

    Let go of your attachments

    Adaptability is required first and foremost when circumstances change. It’s easy to get attached to certain outcomes, especially when they’ve been planned long in advance or have significant emotional weight.

    Due to coronavirus, a couple I know is postponing their wedding originally set for April. Having tied the knot only a year ago myself, I can’t imagine how frustrating that must be for them. But it was the right decision; demanding that the show go on would have been dangerous for their families, friends and the public at large.

    I recently spoke with my friend Belinda Ju, an executive coach with a longstanding meditation practice. Non-attachment is a core concept of Buddhism, the spiritual path she’s followed for many years, and I wanted her thoughts on how that idea might help us adapt to unforeseen circumstances.

    “Attachment doesn’t work because certainty doesn’t work. You can’t predict the future,” she explained. Being attached to something means “seeing the world through a false lens. Nothing is fixed.” For Ju and her clients, non-attachment doesn’t mean giving up on goals — it means focusing on what you can control.

    “You might have a fixed goal of needing to raise X million dollars to keep your team afloat,” she said. “But in the age of coronavirus, investors might be slower to respond. So what are the levers in your control? What are the options you have and the pros and cons to each one?”

    Her points hit home for me. As a NYC-based startup founder, I was preparing to make several trips to the West Coast to raise the next round for my company, Midgame, a digital party host for gamers.

    I like pitching in person, but that’s obviously not going to happen, so I need to embrace video calls as my new reality. By doing that, I can get to stocking up on coffee, cleaning up my work space and setting up a microphone so when I do pitch over video, I’m bringing my A game.

    Be present

    Another way to think about adaptability is that it’s the ability to improvise. In theater, improv performers can’t rely on prewritten lines, and have to react in real time to suggestions from the audience or the words and actions of their scene partners.

    “ ‘Playing the scene you’re in’ is a principle from improv which means to be present to the situation you’re in.”

    That’s what Mary Lemmer told me. As an entrepreneur and VC who spent a stint at The Second City improv theater in Chicago, Lemmer knows a thing or two about having to adapt. Today, she brings her insights to corporations through training and workshops.

    She explained that as an improv performer, you may start a scene with a certain idea in mind of how it will go, but that can quickly change. “If you’re not present,” she said, “then you’re not actively listening and because there’s no script, you’ll miss details. That’s when scenes fall apart.”

    When I was a PM at Etsy and we had a major launch, we’d get engineering, dev ops, product, marketing and customer support together in a room to talk through the final event sequencing. These weren’t always the most exciting meetings and it was easy to get distracted by email or chat. One time engineering announced a significant last-minute issue that almost slipped through the cracks. Luckily, someone piped up with a clarifying question and we were all able to work together to minimize the issue.

    Lemmer argues that in improv, like in business, you can’t make assumptions about people or situations. “We see this a lot in board meetings. People start to assume ‘Sally’ will always be the proactive one or ‘Jim’ will always be the naysayer and tune out.”

    This is kind of attitude is problematic in a stable environment, but downright dangerous in an unstable situation where new data and events can quickly open up a new set of challenges and opportunities.

    Early on, some experts thought the coronavirus crisis would stabilize globally by April. In early February, S&P Global stated that in the “worst-case scenario,” the virus would be contained by late May. A month later, that prediction already looked wildly optimistic.

    Build mental toughness

    Experts are saying now that cases may peak in May or June, which means everyone should be hunkering down for eight or more weeks of social distancing and isolation. A COVID-19 vaccine just started human trials, but testing in large enough sample sizes to identify side effects and then ramping up large-scale production still might not be fully available for more than a year.

    In other words, dealing with this virus is not a sprint, it’s a marathon. A marathon no one signed up for.

    Someone who knows a lot about this topic is Jason Fitzgerald. A 2:39 marathoner, Fitzgerald now helps people run faster and healthier as an author and coach.

    When we spoke over the phone, he pointed out that running, unlike say basketball or gymnastics, is a sport where “you have to voluntarily want to experience more and more discomfort.”

    Fitzgerald calls this ability to endure “mental toughness,” and it’s a skill we all can build. For runners, it requires doing workouts that scare them, putting in mileage that’s higher than they have in the past and racing regularly. It’s also about accepting and even embracing the pain of running hard.

    The same is true for adaptation. We can train ourselves to respond better to change (we’re all getting lots of practice right now!), but developing new habits and working in new ways is always uncomfortable. As decorated cyclist Greg LeMond once said, “it doesn’t get easier, you just get faster.”

    We also have to recognize that we won’t get it right every time. “The more that we get comfortable with poor performances, the more we can learn from them,” Fitzgerald said, noting that he’s had his share of bad races, including failing to finish an ultramarathon in 2015. “Sometimes you dwell on a bad race for a couple days, but then you have to just forget about it and move on with your training.”

    Many of us are reeling from more cancellations, suspensions and complete one-eighties in the last month than in the last five years. But we can’t let ourselves stay bogged down by our feelings of frustration or disappointment. We accept our new reality, learn what we can from it, and keep going.

    It’s clear that the people who can let go of their past plans and embrace the new environment ahead will thrive. Already we’re seeing companies pivot from live events to online webinars, and remote-first workplaces becoming the new normal. Shares of Zoom have risen even as the stock market has taken a beating and I’m sure other winners will emerge in the coming weeks and months.

    But adaptability doesn’t just matter for individuals or even companies, it matters for governments. For China, Taiwan and Hong Kong, thanks to aggressive testing and quarantining efforts, life is returning, somewhat, to normal. New cases are on the decline and there’s hope of life returning to normalcy in the near future. Countries that bungled their response to the disease progression, including Italy, Spain, the U.K. and the United States, are now facing increasingly dire consequences.

    Whether you want to survive a global pandemic, reach the next phase in your career or be selected on a mission to Mars, it’s hard to overstate the importance of adaptability in getting there.


    Source: Tech Crunch Startups | Cultivating adaptability is a pandemic coping skill

    Startups

    ZmURL customizes Zoom link previews with images & event sites

    April 3, 2020

    Sick of sharing those generic Zoom video call invites that all look the same? Wish your Zoom link preview’s headline and image actually described your meeting? Want to protect your Zoom calls from trolls by making attendees RSVP to get your link? ZmURL.com has you covered.

    Launching today, ZmURL is a free tool that lets you customize your Zoom video call invite URL with a title, explanation and image that will show up when you share the link on Twitter, Facebook or elsewhere. ZmURL also lets you require that attendees RSVP by entering their email address so you can decide who to approve and provide with the actual entry link. That could stop Zoombombers from harassing your call with offensive screenshared imagery, profanity or worse.

    “We built zmurl.com to make it easier for people to stay physically distant but socially close,” co-founder Victor Pontis tells me. “We’re hoping to give event organizers the tools to preserve in-person communities while we are all under quarantine.”

    Zoom wasn’t built for open public discussions. But with people trapped inside by coronavirus, its daily user count has spiked from 10 million to 200 million. That’s led to new use cases, from cocktail parties to roundtable discussions to AA meetings to school classes.

    That’s unfortunately spawned new problems, like “Zoombombing,” a term I coined two weeks ago to describe malicious actors tracking down public Zoom calls and bombarding them with abuse. Since then, the FBI has issued a warning about Zoombombing, The New York Times has written multiple articles about the issue and Zoom’s CEO Eric Yuan has apologized.

    Yet Zoom has been slow to adapt it features as it struggles not to buckle under its sudden scale. While it has turned on waiting rooms and host-only screensharing by default for usage in schools, most people are still vulnerable due to Zoom’s permissive settings and reused URLs that were designed for only trusted enterprise meetings. Only today did Zoom concede to shifting the balance further from convenience to safety, turning on waiting rooms by default and requiring passwords for entry by Meeting ID.

    Meanwhile, social networks have become a sea of indistinguishable Zoom links that all show the same blue and white logo in the preview, with no information on what the call is about. That makes it a lot tougher to promote calls, which many musicians, fitness instructors and event producers are relying on to drive donations or payments while their work is disrupted by quarantines.

    ZmURL’s founders during their only in-person meeting ever

    Luckily, Pontis and his co-founder Danqing Liu are here to help with ZmURL. The two software engineers fittingly met over Zoom a year ago and have only met once in person. Pontis, now in San Francisco, had started bike and scooter rental software companies Spring and Scooter Map. Liu, from Beijing but now holed up in New York, had spent five years at Google, Uber and PlanGrid before selling his machine learning tool TinyMind.

    The idea for ZmURL stemmed from Liu missing multiple Zoom events he’d wanted to attend. Then a friend of Pontis’ was laid off from their yoga instructor job, and they and their colleagues were scrambling to market and earn money from hosting their own classes over Zoom. The duo quickly built a beta, with zero money raised, and tested it with some yoga gurus who found it simplified promoting events and gathering RSVPs. “We’re all going through a tough time right now. We see ZmURL as our opportunity to help,” Pontis tells me.

    To use the tool, you generate a generic meeting link from Zoom like zoom.us/ji/1231231232 and then punch it into ZmURL. You can upload an image or choose from stock photos and color gradients. Then you name your event, give it a description and set the time and date. You’ll get a shorter URL like https://zmurl.com/smy5m or you can give it a custom one like zmurl.com/quidditch.

    When you share that URL, it’ll show your image, headline and description in the link preview on chat apps, social networks and more. Attendees who click will be shown a nicely rendered event page with the link to enter the Zoom call and the option to add it to their calendar. You can try it out here, zmurl.com/aloha, as the startup is hosting a happy hour today at 6pm Pacific.

    Optionally, you can set your ZmURL calls to require an RSVP. In that case, people who click your link have to submit their email address. The host can then sift through the RSVPs and choose who to email back the link to join the call. If you see an RSVP from someone you don’t recognize, just ignore it to keep Zoombombers from slipping inside.

    Surprisingly, there doesn’t seem to be any other tools for customizing Zoom call links. Zoom paid enterprise customers can only set up a image and logo-equipped landing page for their whole company’s Zoom account, not for specific calls. For now, ZmURL is completely free. But the co-founders are building out an option for hosting paid events that collect entry fees on the RSVP site while ZmURL takes a 5% cut.

    Next, ZmURL wants to add the ability to link your Zoom account to its site so you can spawn call links without leaving. It’s also building out always-on call rooms, recurring events, organizer home pages for promoting all their calls, an option to add events to a public directory, email marketing tools and integrations with other video call platforms like Hangouts, Skype and FaceTime.

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    Pontis says the biggest challenge will be learning to translate more of the magic and business potential off offline events into the world of video calling. There’s also the risk that Zoom will try to intercede and force ZmURL to desist. But it shouldn’t, at least until Zoom builds all these features itself. Or it should just acquire ZmURL.

    We’re dealing with an unprecedented behavior shift due to shelter-in-place orders that threaten to cripple the world economy and drive many of us crazy. Whether for fostering human connection or keeping event businesses afloat, Zoom has become a critical utility. It should accept all the help it can get.


    Source: Tech Crunch Startups | ZmURL customizes Zoom link previews with images & event sites

    Startups

    Pandemic puts the brakes on micromobility

    April 3, 2020

    As of this writing, nearly a million people globally have been infected with the novel coronavirus and 50,322 have died. Healthcare systems are overwhelmed, consumers and profiteers are hoarding supplies and some service workers have launched strikes while many others have been let go. In the world of micromobility, we’ve seen Bird lay off hundreds of employees and Lime is reportedly gearing up for layoffs of its own.

    Ride Report creates software that enables cities to better work with micromobility operators and has a bird’s-eye view on the industry. In a conversation with TechCrunch, CEO William Henderson outlined some of the trends that have emerged and what we can expect for micromobility operators amid the pandemic — and once it’s over.

    “All of this came at a really hard time for micromobility,” he tells TechCrunch. “It couldn’t really have occurred at a worse time in some ways.”

    That’s because there was already a lot of pressure on startups in the space to reach profitability on an accelerated timeline, Henderson says. While winter is notoriously known as a rough time, the environment in this pandemic is “micromobility winter on steroids.”

    Over the last month, companies have paused operations in cities and started laying off people. Operators Bird and Lime, for example, paused operations across the board last month.


    Source: Tech Crunch Startups | Pandemic puts the brakes on micromobility

    Startups

    How Homage is tackling Southeast Asia’s growing eldercare need

    April 3, 2020

    The world’s population is aging, but the needs of elderly people are still being underserved. A United Nations report found that older people make up more than one-fifth of the population in 17 countries, and by 2100, a majority of the world’s population, or 61%, will be aged 60 and above.

    One of the most urgent needs for families is caregiving, with demand outstripping the pool of qualified providers. This means many people in their thirties and forties are now part of the “sandwich generation,” juggling jobs and child care while looking after elderly relatives. This creates both an opportunity and challenge for tech startups and investors in almost every market around the world.

    In Southeast Asia, Homage is addressing the issue with a platform that takes a curated approach to pairing caregivers and families, using a combination of in-person screening and its matching engine to make the process more efficient. Currently operating in Singapore and Malaysia, the startup announced earlier this year that it will use its Series B funding to expand into five new countries in the region.

    Backed by investors, including HealthXCapital, Golden Gate Ventures and EV Ventures, Homage was co-founded in 2016 by chief executive officer Gillian Tee, who grew up in Singapore and was inspired by her family’s own experiences looking for caregivers. Tee says she wanted to build a platform that would make the process of matching caregivers and clients easier, and be scalable into different markets.

    “It’s not the easiest space to be in, and I would say that you do need to want to be intentionally working in this space, rather than just falling into it. It goes hand in hand,” she told TechCrunch. “We found that there is a huge market opportunity, but why we’re doing it goes way beyond that.”

    How Homage addresses the talent pool shortage


    Source: Tech Crunch Startups | How Homage is tackling Southeast Asia’s growing eldercare need

    Startups

    Germany’s Xpension pension platform raises €25M in a Series C growth round

    April 3, 2020

    The German pension and insurance industry was a laggard in the world of online a few years ago, but in recent times it has quickly caught up. There’s further evidence of this trend with the news that Xpension (trading as xbAV), an online platform for pensions and life insurance, has raised €25 million in its Series C financing round. This will take its total funding to date to more than €50 million.

    The financing round was led by HPE Growth, a growth capital fund. Existing investors Cinco Capital, led by Lars Hinrichs (founder of XING and chairman of Xpension), and Armada Investment, led by Daniel S. Aegerter (founder of Tradex), also participated.

    The new funding will be used to scale up Xpension’s corporate pension and life insurance SaaS platform in Germany; expand the offering into private pensions and life insurance and corporate health insurance; and prepare a rollout into other European countries. The company has also launched a video platform for agents to speak to clients, in the wake of the COVID-19 pandemic.

    To date, Xpension has attracted to its platform more than 40 life insurers, 11,000 insurance agents and 3,000 SMEs.

    Martin Bockelmann, CEO and founder, commented: “After several years of intensive R&D and broad-based user acquisition, this partnership with HPE Growth allows us to unleash the full potential of our platform in Germany and abroad.”

    Tim van Delden, partner at HPE Growth, said: “The move online of the €2.5 trillion global pension and life insurance industry is a huge topic. A SaaS platform like Xpension — which connects life insurers, agents and their corporate and private customers to buy and manage policies — will be a game-changer.”

    Speaking to TechCrunch, Hinrichs, the active chariman and largest private shareholder, said: “We target not just occupational pensions but the entire segment, which is worth €700 billion in premiums a year. German pensions are the leading pensions segment in Europe. And we are taking advantage of the recent changes in pension policy.”

    It would appear that Xpension is in a strong position to potentially open up to end consumers who don’t have pensions, as have similar U.S. platforms, or even to leverage its position to build its own insurance company at some point.


    Source: Tech Crunch Startups | Germany’s Xpension pension platform raises €25M in a Series C growth round

    Startups

    Bustle Digital Group lays off staff of The Outline as part of broader cuts

    April 3, 2020

    Bustle Digital Group, owner of a portfolio of digital media properties including Bustle itself, says it laid off two dozen staffers today. That includes eliminating the entire staff of The Outline, a culture site that it acquired a year ago.

    In a statement, a BDG spokesperson said the company will continue to host The Outline’s archives, and that founder Josh Topolsky will be “exploring alternative paths forward” for its future.

    “The unprecedented impact of COVID-19 has forced us to make some tough business decisions,” a BDG spokesperson said. “Most staff will be taking temporary tiered salary reductions and unfortunately, we have eliminated two dozen positions across the company.”

    Topolsky (former editor in chief of Engadget and founder of The Verge) founded The Outline in 2016. The site shifted its publication model over time, laying off its writers while maintaining an editorial team that continued to publish freelance content. It was then acquired by Bustle, and Topolsky went on to launch the tech news site Input under the BDG umbrella.

    “[I] am tremendously proud of all the weird, funny, interesting, and brilliant stuff we put into the universe, and all the talented writers we were able to publish,” The Outline’s executive editor Leah Finnegan tweeted this morning. “[T]hank you for reading, and [I] hope you will remember what we did fondly.”

    BDG, meanwhile, was founded by CEO Bryan Goldberg (pictured above) in 2013. In the past few years, it hasn’t just acquired The Outline, but also Elite Daily, Mic, Nylon and Gawker. In many cases, the deals came after layoffs or other turmoil.

    We’re entering what’s likely to be a brutal few months (or longer) for the media industry, as the COVID-19 pandemic has led to a dramatic pullback in advertising. The layoffs have already started, while BuzzFeed is trying to avoid them by cutting employee pay.


    Source: Tech Crunch Startups | Bustle Digital Group lays off staff of The Outline as part of broader cuts

    Startups

    OctoML raises $15M to make optimizing ML models easier

    April 3, 2020

    OctoML, a startup founded by the team behind the Apache TVM machine learning compiler stack project, today announced it has raised a $15 million Series A round led by Amplify, with participation from Madrona Ventures, which led its $3.9 million seed round. The core idea behind OctoML and TVM is to use machine learning to optimize machine learning models so they can more efficiently run on different types of hardware.

    “There’s been quite a bit of progress in creating machine learning models,” OctoML CEO and University of Washington professor Luis Ceze told me. “But a lot of the pain has moved to once you have a model, how do you actually make good use of it in the edge and in the clouds?”

    That’s where the TVM project comes in, which was launched by Ceze and his collaborators at the University of Washington’s Paul G. Allen School of Computer Science & Engineering. It’s now an Apache incubating project and because it’s seen quite a bit of usage and support from major companies like AWS, ARM, Facebook, Google, Intel, Microsoft, Nvidia, Xilinx and others, the team decided to form a commercial venture around it, which became OctoML. Today, even Amazon Alexa’s wake word detection is powered by TVM.

    Ceze described TVM as a modern operating system for machine learning models. “A machine learning model is not code, it doesn’t have instructions, it has numbers that describe its statistical modeling,” he said. “There’s quite a few challenges in making it run efficiently on a given hardware platform because there’s literally billions and billions of ways in which you can map a model to specific hardware targets. Picking the right one that performs well is a significant task that typically requires human intuition.”

    And that’s where OctoML and its “Octomizer” SaaS product, which it also announced, today come in. Users can upload their model to the service and it will automatically optimize, benchmark and package it for the hardware you specify and in the format you want. For more advanced users, there’s also the option to add the service’s API to their CI/CD pipelines. These optimized models run significantly faster because they can now fully leverage the hardware they run on, but what many businesses will maybe care about even more is that these more efficient models also cost them less to run in the cloud, or that they are able to use cheaper hardware with less performance to get the same results. For some use cases, TVM already results in 80x performance gains.

    Currently, the OctoML team consists of about 20 engineers. With this new funding, the company plans to expand its team. Those hires will mostly be engineers, but Ceze also stressed that he wants to hire an evangelist, which makes sense, given the company’s open-source heritage. He also noted that while the Octomizer is a good start, the real goal here is to build a more fully featured MLOps platform. “OctoML’s mission is to build the world’s best platform that automates MLOps,” he said.


    Source: Tech Crunch Startups | OctoML raises M to make optimizing ML models easier

    Startups

    The pendulum will swing away from founder-friendly venture raises

    April 3, 2020

    Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

    This morning brought fresh economic bad news for the U.S. economy, with over 700,000 jobs lost in the latest report, despite the window of time measured not including some of March’s worst days, and the data itself not counting as many individuals as it might have; the unemployment rate still rose nearly a full point to 4.4%. The barometer generally expected to rise far higher in a month’s time.

    Rising unemployment, markets in bear territory, shocking weekly unemployment claims, and some major states just starting lockdowns paint the picture of protracted downturn that has swamped our national and state-led economic response. Some help is coming, but individual payments are probably too small and too late. And a key program aimed at helping small businesses is rife with operational mistakes that will at least delay rollout.

    It’s an economic catastrophe, and one that won’t lead to anything like a V-shaped recovery, the vaunted shape that everyone holding equities through the crisis was hoping for. We’re entering a prolonged slump. Precisely how bad isn’t yet known, yes, but it’s going to be bad, with unemployment staying elevated into 2021.

    The impacts of the national economic slowdown are going to change the face of venture capital as we’ve come to know it during the last ten years. How so? Let’s talk about it.

    After picking through some COVID-19-focused PitchBook data this morning, it’s clear that the era of founder-friendly venture terms is heading for a reset. Even more, recent economic and market data, TechCrunch research and select trends already in motion help paint a picture of a changed startup reality.

    So this morning let’s talk about what is coming up for the world of upstart companies and risk embracing capital.


    Source: Tech Crunch Startups | The pendulum will swing away from founder-friendly venture raises

    Startups

    Longtime VC Neil Sequeira: Funding founders without in-person meetings is ‘quite difficult’

    April 3, 2020

    Neil Sequeira was a managing director with General Catalyst for more than 13 years before co-founding early-stage firm Defy several years ago with another veteran of the industry, Trae Vassallo, who’d spent the dozen years prior with Kleiner Perkins.

    We caught up with Sequeira yesterday afternoon and discussed whether he’s seeing valuations come down and whether he can imagine funding founders who may have an exciting pitch but is unable to meet in-person due to the pandemic.

    Our chat has been edited for length.

    TechCrunch: How are you, all things considered?

    Neil Sequeira: We’ve been pretty busy at home. Obviously, my kids are home, homeschooling and my amazing wife is with them.

    At work, we’ve been really busy. We have multiple term sheets out that we’ve done since the stay-at-home order [in the Bay Area] and I actually live within walking distance of my office, where I’m alone but it ends up being like a home office because it’s so close. And it’s great because my kids have been going bonkers.

    How are your companies faring?


    Source: Tech Crunch Startups | Longtime VC Neil Sequeira: Funding founders without in-person meetings is ‘quite difficult’

    Startups

    Forward Partners launches Forward Advances, a revenue-based finance solution for startups

    April 3, 2020

    Forward Partners, the early-stage venture fund and startup studio, has long offered something a little different to the U.K’s tech startup ecosystem, and today the VC is continuing that trend with the launch of “Forward Advances,” a revenue-based finance solution for startups that need to bolster marketing.

    Aimed at “fast-growing” e-commerce, marketplace and B2C SaaS businesses, Forward Advances will provide growth capital to startups in return for a 6% flat fee, with repayments taken as a small percentage of monthly revenue.

    “Unlike traditional venture capital or standard bank loans, a Forward Advance unlocks a novel way for founders to finance their marketing spend without giving up equity, or having to commit to personal warranties,” explains Forward.

    Crucially, this sees repayments structured as a percentage of revenues, meaning that companies won’t be required to make large repayments during tough economic times i.e. slower months mean smaller payments.

    In addition to the loan, Forward Partners says founders will have access its startup studio team, comprising product and growth specialists that can offer hands-on expertise and help accelerate their growth. The idea is that alongside capital, Forward Advances will provide insight into how the marketing cash is best deployed to make the most difference.

    Forward Partners’ Luke Smith is leading Forward Advances, and says that customer research carried out by the VC revealed that raising capital to invest in marketing is often difficult. “Founders find it lengthy, costly, dilutive, stressful or a combination of all four,” he says. One way to remedy this is by combining “flexible funding” with in-house growth specialists, which is exactly what Forward Partners is doing.

    Which brings us to the current Coronavirus pandemic and resulting slowdown and certainty, leading me to ask if there could be a worse time to launch a revenue-based finance product?

    “This is definitely a hard time for a lot of e-commerce and marketplace companies, particularly those in sectors that have been hit hard by COVID-19 disruption such as travel or events, and we’ve sadly had to turn down some companies in those spaces,” says Smith.

    “However, we’ve seen that a number of sectors such as household goods, gaming or edtech are showing strong growth. We will focus on sectors that are positively impacted or unaffected by the disruption for the next few months and then broaden our sector focus as the market improves. With VC funding expected to pull back, we expect that a lot of companies with strong fundamentals will need cash to fund growth.”

    More broadly, Smith underlines that Forward Advances is focusing on companies with “strong fundamentals.” This sees the VC look at cash flow as part of the decision making process and will only make advances to companies that it believes will be able to repay the loan. “That said, the loans are unsecured, so we can’t be sure we will get our money back and if companies revenues fall to zero we don’t get repaid,” he explains.

    Asked why more VCs don’t offer this kind of product, Smith says that despite making lots of risky investments, the VC industry is generally “very conservative” when it comes to its own business model. “Forward Partners has always been a little different, first by building our studio team that offers a level of support to our portfolio not seen at other VC funds, and now by launching Forward Advances,” he adds. “We see ourselves as a service provider to entrepreneurs and plan to keep broadening the range of services that we offer.”


    Source: Tech Crunch Startups | Forward Partners launches Forward Advances, a revenue-based finance solution for startups