Y Combinator Demo Day, revenue-based VC funding, Pivotal, Dell, Tumblr, WeWork, and more – gpgmail


Editor’s note

Due to bad travel logistics (thanks SFO), I wasn’t able to get the mid-week edition of the Extra Crunch roundup newsletter out. Sorry about that. Instead, here is everything we published this week on Extra Crunch in one fell swoop — and my, we covered a lot of ground. Hope you enjoy some great weekend reading.

Y Combinator Demo Day Coverage-a-palooza

Much like the equinoxes that synchronize Earth’s calendar, Y Combinator’s biannual demo days are a key fixture of the Silicon Valley calendar. This year was no different, with 166 companies presenting from the summer batch (and occasionally from previous batches if they chose to delay their presentation).

We had a full squad on site not only covering the 84 companies from day one and 82 companies from day two, but our team also put their collective heads together to identify the top companies from each set exclusively for Extra Crunch members.

The 11 best startups from Y Combinator’s S19 Demo Day 1

Read our favorite 11 startups from day one, which included:

PopSQL provides collaborative SQL query editing. You can store SQL queries you run regularly, grouping them into folders that can be kept private or shared amongst your team. Version history tracks changes so it can be reverted if/when something breaks. It currently has more than 100 paying companies, and is making $13K per month. It plans to build a marketplace for apps that run on top of your company’s database.

Why it’s one of our favorites: SQL database queries can be a nightmare, especially if they’re not something you’re used to dealing with every day. PopSQL lets you hammer on queries collaboratively until they’re working exactly as you want — then you can save them for future use and share them amongst your team members. And when you’ve spent the last 45 minutes trying to figure out why your query isn’t working only for a team mate to fix it in thirty seconds, you can use version control to see exactly what they changed. PopSQL says its product has already found customers in companies like Instacart, Redfin, and DoorDash.

Our 12 favorite startups from Y Combinator’s S19 Demo Day 2

Read our favorite 12 startups from day two, which included:

Business Score is helping companies automate background checks on other businesses. The startup is looking to stamp out tired manual processes that largely mean picking up the phone and scouring documents. The single API taps data sources across the web to build out real-time profiles that can help customers scan businesses in an effort to prevent fraud, qualify leads and onboard new clients.

Why it’s one of our favorites: Though it’s yet another startup in the batch catering to other startups, we thought Business Score stood out. The company integrates with thousands of data providers to help companies verify other startups and enterprises they are considering doing business with, using a system they’ve dubbed “the business passport.” There’s an opportunity here to create a tool essential to company-building across industry.

YC is doubling down on these investment theses in its most recent batch

Finally, amidst all the zany craziness of watching 166 companies present over two days (there should be a YC company for unmelting your brain), our venture capital reporter Kate Clark stepped back to assess what all the various companies in the batch indicated about the accelerator’s strategy these days.

YC knows its sweet spot: enterprise SaaS. One might go as far as to say it’s transitioning into a full-on SaaS incubator. Why? Because one of the greatest advantages of going through YC is the network of alumni companies you can tap into. Many successful B2B companies have emerged from the program, raised boat loads of venture capital funding and rocketed to the moon (hello Stripe, Brex, Gusto and Atrium). With that in mind, YC is doubling down on its resources for startups that sell products to other startups, which brings us to our first piece of news.

YC chief executive officer Michael Seibel and president Geoff Ralston announced this week that the accelerator has implemented something called CTO and HR demo days. In short, CTO and HR demo days are an opportunity for B2B startups to pitch their products to YC alum companies’ CTO and/or head of HR. Seibel and Ralston said 60 CTOs attended the event, as well as 30 HR heads. In total, 42 startups presented and we’re guessing a bunch of those companies booked a few customers.


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Startups Weekly: Diamond-encrusted disruption – gpgmail


Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about the flurry of IPO filings. Before that, I noted the differences between raising cash from angels vs. traditional venture capitalists.

Remember, you can send me tips, suggestions and feedback to kate.clark@Gpgmail.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

What’s new

Venture capitalists look for companies poised to disrupt markets untouched by innovative technology. Believe it or not, a very small percentage of jewelry shopping is done online, which means there’s a big opportunity — for the right team — to bring jewelry buyers and sellers to the 21st century.

Enter Pietra, a new startup that’s just raised $4 million in a round led by Andreessen Horowitz’s Andrew Chen (Substack & Hipcamp investor). Robert Downey Jr.’s VC fund Downey Ventures and Will Smith’s fund Dreamers Fund also participated, as did Hollywood manager Scooter Braun, Michael Ovitz and supermodel Joan Smalls.

I spoke to the founding team, which includes Uber alum Ronak Trivedi and Ashley Bryan, who hails from fashion e-commerce site Moda Operandi. The pair bring a healthy mix of technology and fashion expertise to the mix. Trivedi tells gpgmail he’s drawn on his Uber experience to recruit engineers from top tech companies and to advocate for fast growth. Meanwhile, Bryan has leveraged her fashion industry connections to establish relationships with luxury designers.

 “Fashion is typically really under-resourced in terms of tech,” Bryan tells gpgmail. “[The fashion industry] is great at the creativity part but it’s tough, especially with jewelry because you really have to put up a lot of capital.”

Pietra’s plan is to create a high-end marketplace for consumers to connect with jewelry designers. To do this, the team has adopted the standard marketplace approach, taking a 30% marketplace fee from sellers, as well as a 7% fee from buyers commissioning jewelry on the platform.

“Whether you do custom jewelry or engagement jewelry or you do jewelry for celebrities like Drake, you can come on Pietra and connect with a global marketplace,” says Trivedi.

The jewelry market is expected to be worth more than $250 billion by 2020, according to McKinsey research. And where there’s a billion-dollar market, there are VCs. 

“Even though gemstones and jewelry have been at the center of art, commerce, and culture since the dawn of human civilization — going from stone jewelry created 40,000 years ago in Africa to the trade routes between East and West to Fifth Avenue in New York to the Instagram feed on your phone — the technology for discovering, designing, and purchasing jewelry online hasn’t evolved much at all,” writes a16z’s Chen, who overlapped with Trivedi during his Uber tenure.

Pietra completed its official launch this week. It has 100 designers on the platform and counting, along with what the founders say is a lengthy waitlist.

hands signing check 1

In other news

This week I published a long feature on the state of seed investing in the Bay Area. The TL;DR? Mega-funds are increasingly battling seed-stage investors for access to the hottest companies. As a result, seed investors are getting a little more creative about how they source deals. It’s a dog-eat-dog world out there and everyone wants a stake in The Next Big Thing. Read the story here.

Demo Day

Y Combinator graduated another batch of 200 companies this week. We were there both days, taking notes on each and every company. To make things easy on you, I’ve put together the ultimate YC reading list:

Here’s a look at some of the profiles we’ve written on the S19 companies:

Listen

We recorded two great episodes of Equity, gpgmail’s venture capital podcast, this week. The first was with YC CEO Michael Seibel, in which he speaks to trends at the seed stage of investing, changes at the accelerator program, including its move to San Francisco and more. You can listen to that one here. Plus, we had on Unusual Ventures co-founder and partner John Vrionis, who talked to us about direct listings versus IPOs and the future of DoorDash and Airbnb. You can listen to that one here.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast and Spotify.

Tips for B2B startups

Contributors Tyler Elliston and Kevin Barry share advice for B2B companies: “Over the years, we’ve seen a lot of B2B companies apply ineffective demand generation strategies to their startup. If you’re a B2B founder trying to grow your business, this guide is for you. Rule #1: B2B is not B2C. We are often dealing with considered purchases, multiple stakeholders, long decision cycles, and massive LTVs. These unique attributes matter when developing a growth strategy. We’ll share B2B best practices we’ve employed while working with awesome B2B companies like Zenefits, Crunchbase, Segment, OnDeck, Yelp, Kabbage, Farmers Business Network, and many more.” Read the full story here. (Extra Crunch membership required.)




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Watch YC CEO Michael Seibel chat startups, prices, and tech’s center of gravity – gpgmail


This week, nearly 200 startups convened at Y Combinator Demo Day to pitch venture capitalists, angels and other folks looking to spend some money.

YC chief executive officer Michael Seibel took some time out of his busy schedule to join us on a special episode of Equity, gpgmail’s venture-capital-focused podcast. Given that we had Seibel to chat with, Kate and Alex decided to drop the regular format and riff interview-style about what the accelerator program is up to.

We discussed the new startup batch (roundups here, here, and here), recent changes to the program, rising deal prices, SAFEs versus convertible notes and the future of technology in San Francisco. Regarding price, here’s what Seibel had to say:

“It’s a competitive market where investors are bidding against each other. So if you see pricing go up you have to ask yourself the question, ‘where is the money supply coming from?’ The big trend over the last six years has been institutional investors moving from just kind of Series A funds and growth funds down to the seed level. When you looked at Demo Day when I was going through the first time it was full of angels – people investing off their own personal balance sheet. And if you look at the room today it’s full of funds. The reality is that, as the pool of capital increases in the seed world, the seed investors are competing against each other and one of the easier ways for investors to compete is to bid up price.”

But, Seibel continued, YC doesn’t necessarily consider the situation a net-positive, because companies that raise such huge rounds can spend money as though they had reached the fabled “product-market fit,” when in reality they have not. They just have money, which can feel the same but is not.

Ultimately, the thing that’s going to kill you, Seibel says, isn’t fundraising or who you raised from. The thing that’s going to kill you, he says, is that you didn’t build something your customers wanted.

Watch a clip from the interview here:

To hear more from Seibel and watch four more video clips discussing YC, the new class, and the startup game in San Francisco and beyond, become an Extra Crunch member. You can learn more and try it for free. 




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YC is doubling down on these investment theses in its most recent batch – gpgmail


Nearly 200 startups have just graduated from the prestigious San Francisco startup accelerator Y Combinator. The flock of companies are now free to proceed company-building with a fresh $150,000 check and three-months full of tips and tricks from industry experts.

As usual, we sent several reporters to YC’s latest demo day to take notes on each company and pick our favorites. But there were many updates to the YC structure this time around and new trends we spotted from the ground that we’ve yet to share.

CTO and HR demo days


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