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OnLoop launches with $5.5M to inject some fun into performance reviews
Performance reviews eat up a lot of a manager’s time and are often the most dreaded part of work. OnLoop aims to bring some joy into the process by enabling information-gathering to happen behind the scenes and be easier for hybrid workforces.
The Singapore-based company designed a mobile-first product that consistently gathers employee feedback and goals so that the company has better insights into how both individuals and teams are doing. The feedback is also captured and converted into auto-generated reviews that lay out all of the content collected for managers to then quickly put together a finished product.
The platform was in private beta since January 2021, and after a successful run with 25 companies, OnLoop raised $5.5 million co-led by MassMutual Ventures and Square Peg Capital along with Hustle Fund and a group of angel investors including XA Network, BCG’s Aliza Knox, Uber’s Andrew Macdonald, Ready’s Allen Penn, Google’s Bambos Kaisharis, Ripple’s Brooks Entwistle, Robert Hoyt, Nordstar’s Eddie Lee, Nas Academy’s Alex Dwek and hedge fund managers John Candeto and Keshav Lall.
OnLoop co-founder and CEO Projjal Ghatak spent over three years at Uber and said he saw his fair share of productivity tools, but still struggled to develop his own team as tasks and communication were done differently by each employee.
“This is the one problem that companies consistently complain about — not having the right tool to develop teams,” he added.
As someone who began spending more and more time on his phone, Ghatak wanted his product to be mobile-native and eliminate the need for managers to start from scratch on performance reviews each time. Rather than spend days gathering the information, as the name suggests, OnLoop continuously and automatically captures the data and converts it into a well-written summary.
OnLoop app. Image Credits: OnLoop
Having that continuous loop of information is good for morale, he said. He points to data that shows regular self-reflection and feedback increased productivity by 20%, and a Gallup study where only 14% of employees thought their performance reviews inspired them to improve.
“A lot of company culture is set by the leaders, so as they want to drive this culture in their organizations, we are the tool that drives this,” Ghatak said. “Our job is to help educate the teams on how to do that well. We hear time and time again to make it fun and convenient. Teams don’t realize that if you are helping colleagues understand, showing them a light they didn’t have before, it will drive impact.”
The new funding will be mainly invested into product development and R&D, including expanding product, data and engineering teams. The company will also look at its sales and marketing framework. The company currently has 22 employees.
OnLoop was able to convert some of its early adopters into paying customers and is now focusing on figuring out a scalable way to get the product into the hands of more teams.
Piruze Sabuncu, partner at Square Peg Capital, experienced the pain of performance reviews when she was working in Stripe’s Southeast Asia and Hong Kong region. One of the challenges she faced working with regional teams was that an employee’s direct manager could be located elsewhere, yet work closely with a manager in their respective office.
Square Peg itself uses OnLoop, and Sabuncu said she liked that it is mobile-first and was designed in a way that people didn’t open it up and dread using it.
“Who your manager is, is a big question, but it shouldn’t matter,” she added. “It would still be my duty to be capturing and developing the person even if they were not my direct person. Everyone is talking about remote and hybrid work, and it is not going anywhere — it is here to stay. We believe this is a huge opportunity, a $400 billion market to disrupt, and OnLoop is providing better ways to communicate and give feedback.”
Editor’s note: Due to error, the round amount and lead investors were updated following the announcement.
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Yummy raises $4M, aims to be ‘super app of Venezuela’
Yummy, a Venezuela-based delivery app on a mission to create the super app for the country, announced Friday it raised $4 million in funding to expand its dark store delivery operations across Latin America.
Funding backers included Y Combinator, Tinder co-founder Justin Mateen, Canary, Hustle Fund, Necessary Ventures and the co-founders of TaskUs. The total investment includes pre-seeding capital raised in 2020.
“This appears to be a contrarian bet, but Yummy has quickly become the No. 1 super app in Venezuela and proven that the team can scale the business in a difficult territory,” Mateen said in a statement. “Now Vicente and the rest of the Yummy team will expand into more traditional markets with the necessary experience and support to overcome inevitable challenges that they will face.”
Vicente Zavarce, Yummy’s founder and CEO, launched the company in 2020 and is currently part of Y Combinator’s summer 2021 cohort. Born in Venezuela, Zavarce came to the U.S. for school and stayed to work in growth marketing at Postmates, Wayfair and Getaround before starting Yummy. Zavarce was a remote CEO over the past year, stuck in the U.S. due to travel restrictions, but said he is making the most of it.
Yummy’s app can be downloaded for free, and the company charges a delivery fee or merchant fee. In contrast to some of his food delivery competitors, Zavarce told TechCrunch Yummy’s fees are “the lowest in the market” so they do not affect the merchant’s ability to use the app.
Yummy order heat map. Image Credits: Yummy
The company is pulling together additional key components for its super app strategy, which includes launching a ridesharing vertical this year. Yummy has already connected more than 1,200 merchants with hundreds of thousands of customers.
And, over the past year the company completed more than 600,000 deliveries of food, groceries, alcohol and shopping. It reached $1 million in monthly gross merchandise volume while also growing 38% in revenue month over month.
Over the past eight years, the political and economic challenges faced by the country have led to its recent adoption of the U.S. dollar, Zavarce said. In some cases up to 70% of transactions are happening in dollars on the ground. He said this has protected the business against hyperinflation and ultimately created the opportunity for startups to begin operating in Venezuela.
Because of that, combined with more consumer technology innovation over the past decade, Zavarce said there is no reason why Venezuela should not have the best last-mile logistics. It’s there that Yummy has an opportunity to connect multiple vertices into a super app with little to no competition.
“Eventually, other players will enter, but because we have a super app, we already have an amazing frequency of usage,” he added. “We also already have exclusivity with 60% of the food delivery marketplace, which has enabled us to build a moat around the market. We believe we are the right people to execute on this and feel it is our responsibility to do it.”
Plans for the new funding include user acquisition — the company has close to 200,000 registered users already — and to expand in Peru and Chile by August. At the same time, Zavarce will spend some of that capital to attract more users across Venezuela. He also expects to be in Ecuador and Bolivia by the end of the year.
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Hustle Fund backs Fintor, which wants to make it easier to invest in real estate
Farshad Yousefi and Masoud Jalali used to drive through Palo Alto neighborhoods and marvel at the outrageous home prices. But the drives sparked an idea. They were not in a financial position to purchase a home in those neighborhoods (to be clear, not many people are) either for investment or to live. But what if they could invest in homes in up and coming cities throughout the U.S.?
Then they realized that even that might be a challenge, considering that with all their student debt, affording a down payment would be impossible.
“There was nothing available out there besides a crowdfunding platform, which when we first signed up, took away $1,000 from our account that we didn’t have, and then our capital would be locked up for three to 10 years,” recalls Yousefi.
So the pair started doing research and spoke to 1,000 individuals under the age of 35. Eight out of 10 said they would like to invest in real estate but were deterred by all the barriers to entry.
“There is clearly a large demand for access to real estate,” Yousefi said. “And we wanted to give people a way to invest in it like they can in stocks, via a mobile app.”
And so the idea for Fintor was born.
Yousefi and Jalali founded the company in 2020 with the goal of purchasing homes via an LLC, and turning each into shares through an SEC-approved broker dealer. Individuals can then buy shares of the homes via Fintor’s platform. Its next step is to sign agreements with individual real estate investors or bigger real estate development firms to list their properties on the platform and give people the opportunity to buy shares.
And now Fintor has raised $2.5 million in seed money to continue building out its fractional real estate investing platform. The startup aims to “fractionalize” houses and other residential property, giving people in the U.S. access to investment opportunities “starting with as little as $5.” The company attracted the interest of investors such as 500 Startups, Hustle Fund, Graphene Ventures, Houston-based real estate investor Manny Khoshbin, Mana Ventures and other angel investors such as Cindy Bi, Skyler Fernandes, VU Venture Partners, Minal Hasan, Andrew Zalasin, Alluxo CEO and founder Safa Mahzari, SquareFoot CEO and founder Jonathan Wasserstrum and Teachable CEO and founder Ankur Nagpal.
Image Credits: Fintor
Fintor is eying markets such as Kansas City, South Carolina and Houston, where it already has some properties. It’s looking for homes in the $80,000 to $350,000 price range, and millennials and Gen Zers are its target demographic.
“Fintor can give the same return as the stock market, but at half the risk,” Yousefi said. “As two [Iranian] immigrants, we’ve seen how much this country has to offer and how real estate sits at the top of everything, yet is so inaccessible.”
The pair had originally set out to raise just $1 million but the round was quickly “way oversubscribed,” according to Yousefi, and they ended up raising $2.5 million at triple the original valuation.
Jalali said the company will use machine learning technology to filter and rate properties as it scales its business model.
“We’ll use ML to categorize neighborhoods and to come up with the price of properties to offer to potential sellers,” he added. “Our ultimate goal is to create indexes so that people can invest in multiple properties in a given city. That creates diversification right away.”
Elizabeth Yin, co-founder and general partner of Hustle Fund, believes that Fintor is solving a generational problem with real estate.
“Retail investors have almost no access to great real estate investments today and the best opportunities are reserved for the select few,” she told TechCrunch. “Not to mention that in addition to access, retail investors often need a lot of capital in order to have a diversified portfolio or be accredited to join funds.”
Fintor’s approach to securitize real estate assets will give millions of investors who are not accredited investors access they would otherwise not have had, Yin added.
“Simultaneously, it provides increased liquidity to property owners, while improving the user experience for both parties,” she said. “Effectively this becomes a new asset class, because it’s entirely turnkey and is fractionalized, which opens up many new pockets of investors.”
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Meroxa raises $15M Series A for its real-time data platform
Meroxa, a startup that makes it easier for businesses to build the data pipelines to power both their analytics and operational workflows, today announced that it has raised a $15 million Series A funding round led by Drive Capital. Existing investors Root, Amplify and Hustle Fund also participated in this round, which together with the company’s previously undisclosed $4.2 million seed round now brings total funding in the company to $19.2 million.
The promise of Meroxa is that businesses can use a single platform for their various data needs and won’t need a team of experts to build their infrastructure and then manage it. At its core, Meroxa provides a single software-as-a-service solution that connects relational databases to data warehouses and then helps businesses operationalize that data.
Image Credits: Meroxa
“The interesting thing is that we are focusing squarely on relational and NoSQL databases into data warehouse,” Meroxa co-founder and CEO DeVaris Brown told me. “Honestly, people come to us as a real-time FiveTran or real-time data warehouse sink. Because, you know, the industry has moved to this [extract, load, transform] format. But the beautiful part about us is, because we do change data capture, we get that granular data as it happens.” And businesses want this very granular data to be reflected inside of their data warehouses, Brown noted, but he also stressed that Meroxa can expose this stream of data as an API endpoint or point it to a Webhook.
The company is able to do this because its core architecture is somewhat different from other data pipeline and integration services that, at first glance, seem to offer a similar solution. Because of this, users can use the service to connect different tools to their data warehouse but also build real-time tools on top of these data streams.
Image Credits: Meroxa
“We aren’t a point-to-point solution,” Meroxa co-founder and CTO Ali Hamidi explained. “When you set up the connection, you aren’t taking data from Postgres and only putting it into Snowflake. What’s really happening is that it’s going into our intermediate stream. Once it’s in that stream, you can then start hanging off connectors and say, ‘Okay, well, I also want to peek into the stream, I want to transfer my data, I want to filter out some things, I want to put it into S3.’ ”
Because of this, users can use the service to connect different tools to their data warehouse but also build real-time tools to utilize the real-time data stream. With this flexibility, Hamidi noted, a lot of the company’s customers start with a pretty standard use case and then quickly expand into other areas as well.
Brown and Hamidi met during their time at Heroku, where Brown was a director of product management and Hamidi a lead software engineer. But while Heroku made it very easy for developers to publish their web apps, there wasn’t anything comparable in the highly fragmented database space. The team acknowledges that there are a lot of tools that aim to solve these data problems, but few of them focus on the user experience.
Image Credits: Meroxa
“When we talk to customers now, it’s still very much an unsolved problem,” Hamidi said. “It seems kind of insane to me that this is such a common thing and there is no ‘oh, of course you use this tool because it addresses all my problems.’ And so the angle that we’re taking is that we see user experience not as a nice-to-have, it’s really an enabler, it is something that enables a software engineer or someone who isn’t a data engineer with 10 years of experience in wrangling Kafka and Postgres and all these things. […] That’s a transformative kind of change.”
It’s worth noting that Meroxa uses a lot of open-source tools but the company has also committed to open-sourcing everything in its data plane as well. “This has multiple wins for us, but one of the biggest incentives is in terms of the customer, we’re really committed to having our agenda aligned. Because if we don’t do well, we don’t serve the customer. If we do a crappy job, they can just keep all of those components and run it themselves,” Hamidi explained.
Today, Meroxa, which the team founded in early 2020, has more than 24 employees (and is 100% remote). “I really think we’re building one of the most talented and most inclusive teams possible,” Brown told me. “Inclusion and diversity are very, very high on our radar. Our team is 50% black and brown. Over 40% are women. Our management team is 90% underrepresented. So not only are we building a great product, we’re building a great company, we’re building a great business.”
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InsurGrid raises pre-seed financing to help modernize legacy insurance agents
Insurance agents spend hours handling paperwork and grabbing client information over the phone. A new seed-stage startup, InsurGrid, has developed a software solution to help ease the process, and make it easier for agents to serve existing clients — and secure new ones.
InsurGrid gives agents a personalized platform to collect information from clients, such as date of birth, driver’s license information and policy declaration. This platform helps agents avoid sitting on long calls or managing back-to-back emails, and instead gives them one spot to understand how all their different clients function. It is starting with property and casualty management.
The startup integrates with 85 insurance carriers, serving as the software layer instead of the provider. Using the InsurGrid platform, insurers can ask clients to upload information and within seconds be registered as a policyholder. This essentially turns into a living Rolodex that insurers can use to access information on the account, and offer quotes on a faster rate.
Image Credits: InsurGrid
There’s a monetary benefit in providing better service. Eden Insurance, a customer of InsurGrid, said that people who submit information through the platform converted at an 82% higher rate than those who don’t. Jeremy Eden, the agency owner of Eden Insurance, said they were able to show consumers that its plan was $300 cheaper than its existing rate.
At the heart of InsurGrid is a bet from the founding team that legacy insurance agents aren’t going anywhere. Co-founder/CEO Chase Beach pointed out that the majority of the $684 billion of annual property and casualty insurance premiums in the United States is distributed by approximately 800,000 agents working in 16,000 brokerages. So far, InsurGrid works with more than 150 of those agencies.
When asked if InsurGrid ever had plans to offer its own insurance, similar to insurtech giants Hippo, Lemonade and Root, Beach said that it is solely working on innovating around the sales process for now. He said that these big companies, which have either recently gone public or are planning to, still rely on agents to be successful.
“Instead of us replacing the insurance agent, what if we gave them that same level of technology of a Hippo or large carrier,” Beach said. “And provide them with the digital experiences so they can compete in 2021.”
As time goes on, he sees insurance agents taking the same role that financial advisors or real estate agents take: “very much involved in the process because they are that expert.”
Other startups that have popped up in this space include Gabi, Trellis and Canopy Connect. The differentiator, the team sees, is that Beach comes from a 144-year-old insurance legacy, giving him key insights on how to sell to agents in a successful and effective way. It is starting with sales, but expect InsurGrid to expand to other parts of the insurance process as well.
To help them compete with new and old startups, InsurGrid recently raised $1.3 million in pre-seed financing to help it fulfill its goal to be the “underdog for the underdogs,” Beach said. Investors include Engineering Capital, Hustle Fund, Vess Capital, Sahil Lavingia and Trevor Kienzle.
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Venture capital LPs are the missing link to solving Silicon Valley’s diversity problem
Pranavi is an investor and writer currently doing pre-seed and seed-stage B2B SaaS investing at Acceleprise Ventures and writing at publicbeta.substack.com.
In the last few months, we’ve seen much of Silicon Valley finally start to acknowledge generations of systemic racial inequity and take actionable steps to empower and support underrepresented people in tech. Funds are looking to invest capital more equitably and have started to take concrete steps to achieve this goal.
For example, Eniac Ventures and Hustle Fund have started to meet with more Black founders via consultations and encouraging cold inbound pitches. Initiatives like venture capital fellowships run by Susa Ventures and Unshackled Ventures will allow for increased representation in investment teams. While these initiatives are exciting, it’s important to explore how we can enable sustainable change and solve the diversity problem at the root.
It’s as simple as this: Investing in diverse perspectives makes for a far more efficient economy. The data also confirms this, given that homogeneous investing teams had a success rate for M&A and IPOs that was 26.4%-32.2% lower. Data since 1990 shows that approximately only 8% of VCs identify as women, with 2% of VCs identifying as Latinx and less than 1% identifying as Black.
It’s clear that the inequitable deployment of capital that results from homogenous investment teams at VC funds has translated into missed opportunity for outsized financial returns. Since this really comes down to how venture funds operate at their core, an entity that can greatly influence this and reinvent the status quo are VC funds’ limited partners.
Limited partners are the often unheard of backers of venture capital funds. Institutional venture capital funds raise money from sources such as high-net-worth individuals (HNWs), endowments, foundations, fund of funds, banks, insurance/pension funds and sovereign wealth funds that they will in turn use to invest money into high-growth, category-defining startups (the part that you do hear about).
LPs hold a lot of power in the venture financing life cycle as institutional venture capital firms can’t write checks at the scale they do without the external financing that LPs provide. Since LPs are the source of capital, they can control who they invest in (GPs) and how they invest and manage their capital. What if LPs are the missing link who can control the flow of capital to GPs who empower, find and fund more underrepresented entrepreneurs and keep them accountable?
That sounds great, but why does this matter?
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Company-builder Antler passes $75M raised after investment from Schroders and Ferd
Antler is a “company builder” that emerged a couple of years ago, running startup generator programs and investing from an early stage, bringing a heady mix of technologists, product builders and operators together with its own technology stack.
Now, plenty of “company builders” have come and gone. It’s a bit like Apocalypse Now: everyone goes in thinking they will come up with the major formula to spit out startups at a prodigious rate and they come out screaming “The Horror! The Horror!”
But Antler appears to have been on an interesting run. It has so far made more than 120 investments across a wide range of companies, with several going on to raise later-stage funding from the likes of Sequoia, Golden Gate Ventures, East Ventures, Venturra Capital and the Hustle Fund.
Since its launch in Singapore two years ago, Antler now has a presence across New York, London, Singapore, Sydney, Amsterdam, Stockholm, Nairobi and Oslo.
Today, it’s announcing that it has attracted investment from British investment management company Schroders, investment house FinTech Collective and Ferd, the vehicle used by Johan H. Andresen, the Norwegian industrialist and investor.
This latest investment takes the capital raised by Antler over the past six months to more than $75 million.
These investors join an existing group that includes Facebook co-founder Eduardo Saverin, Canica International and Credit Saison, the third-largest credit card issuer in Japan. The idea here is that these investors get exposure to early-stage companies as they are built.
As with most company builders and accelerators, Antler only takes 1-1.5% of the applicants
Its portfolio includes Sampingan, an on-demand workforce in Indonesia; Xailient, a computer vision technology; Airalo, a global e-sims marketplace; and FusedBone, which enables medical centers to produce bespoke, non-metal implants on-site.
Magnus Grimeland, Antler co-founder and CEO said: “With our support, our founders start refining their ideas and building new and innovative businesses. What is equally important is the deep relationship our founders build with their peers, our advisors and backers. Having accomplished investors like Schroders, Ferd and FinTech Collective on board means we can provide a more valuable network for our startups as they grow their businesses.”
Peter Harrison, Group CEO of Schroders, who will also be joining Antler’s advisory board, said: “We are in a period of unprecedented change. The visibility on venture capital activity and innovation that Antler provides is therefore leading-edge.”
Antler says more than 40% of its portfolio companies have a female co-founder and 78% of these have a female CEO.
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Trulia founder Pete Flint backs real estate startup Modus
The founders of Seattle-based Modus cold-emailed Pete Flint, the founder of Trulia and a current managing partner at the venture capital firm NFX, for months, to no avail. In a last-ditch effort, Alex Day, Jai Sim and Abbas Guvenilir sent one more message to the investor whose real estate listings tool sold to Zillow in 2014 for $3.5 billion. They were at a coffee shop below his San Francisco office, was he interested in meeting?
Fortunately for them, he was.
Modus co-founders Abbas Guvenilir (left), Jai Sim, Alex Day (right)
Modus, a real estate startup focused on title and escrow services, is today announcing a $12.5 million Series A financing co-led by NFX’s Flint and Niki Pezeshki of Felicis Ventures. Liquid 2 Ventures and existing backers, including Mucker Capital, Hustle Fund, 500 Startups, Rambleside and Cascadia Ventures, also participated in the round.
“The first revolution in online real estate was transforming the research experience, the next revolution in the industry is transforming the transaction,” Flint said in a statement.
Modus launched in 2018 with a focus on Washington (state) real estate opportunities. The startup, led by former employees of a nearly defunct lunch delivery company, Peach, has developed software to help both agents and home buyers navigate the home closing process, which, unlike many other real estate experiences, has yet to receive a boost of innovation from startups building in the sector. That’s why Modus started with an emphasis on escrow services, though the team’s long-term vision, they explain, is to power all real estate transactions.
“When you think about communication, you think of Gmail; when you think of traveling, you think of Uber. We want to be synonymous with home closing,” Sim, the company’s executive chairman, tells TechCrunch.
Day, Modus’ chief executive officer and former head of expansion at Peach, says Modus has ambitions of becoming a sort of operating system for real estate, or “like what Stripe is for payment processing, we want to become for real estate transactions.”
Since closing its Series A financing in May — the team waited until now to make its financing information public — Modus has increased its headcount to 50 employees across product, engineering and operations. Their goal now is to provide their software to home buyers in 15 to 20 states over the next two years. To support expansion efforts, Modus plans to raise a Series B in the second or third quarter of next year.
Modus previously raised $1.8 million in seed funding.
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Afore Capital raises second pre-seed venture capital fund
As expectations from seed investors intensify, a new stage of investment has established itself earlier in the venture-backed company life cycle.
Known as “pre-seed” investing, one of the first legitimate outfits to double down on the stage has refueled, closing its second fund on $77 million.
Afore Capital’s sophomore fund is likely the largest pool of venture capital yet to focus exclusively on pre-seed companies, or pre-product businesses seeking their first bout of institutional capital. In many cases, a pre-seed startup may even be “pre-idea,” yet to fully incorporate. While some funds are happy to invest that early, Afore seeks slightly more mature companies.
Afore invests between $500,000 and $1 million in nascent startups. As it kicks off its second fund, founding partners Anamitra Banerji and Gaurav Jain tell TechCrunch they plan to lead all of their investments.
We have the opportunity to build a firm that defines a category. – Afore founding partner Anamitra Banerji
Standouts in Afore’s existing portfolio include the no-fee credit card company Petal — which has raised roughly $50 million to date — mobile executive coaching business BetterUp, childcare information platform Winnie and Modern Health, a B2B mental wellness platform.
Afore portfolio companies have raised more than $360 million in follow-on funding, with an aggregate market cap of $1.5 billion, Jain, the founding product manager at Android Nexus and former principal at Founder Collective, tells TechCrunch. “These are high-quality teams with high-quality projects and ideas.”
Jain and Banerji — a founding product manager at Twitter and former partner at Foundation Capital — began raising capital for Afore’s $47 million debut fund in 2016. Since then, the landscape for seed investing has shifted. Early-stage investors have begun funneling larger sums of capital to standout teams at the seed, while billion-dollar venture capital funds set aside capital for serial entrepreneurs working on their next big idea. As a result, deal sizes have swelled and deal count has shrunk simultaneously.
“Pre-seed has replaced seed in the venture ecosystem,” Banerji tells TechCrunch. “We saw this early as a result of both of us having been at funds. We knew that this was going to be a massive category just like seed was before it. Now we think it’s clearly here to stay and we have the opportunity to build a firm that defines a category.”
Since launching the firm, the pair explain they’ve noticed more and more founders explicitly stating that they are in the market for a pre-seed round, a statement you wouldn’t have heard as recently as two years ago.
This is a result of Afore’s efforts to legitimize the stage through investments and programming, including its annual Pre-Seed Summit. Though Afore is certainly not the only VC fund focused on the earliest stage of startup investing — other firms deploying capital at the stage include Hustle Fund, which closed an $11.8 million debut fund last year, plus the $20 million immigrant-focused pre-seed fund Unshackled Ventures and the predominant seed and pre-seed stage firm Precursor Ventures, which announced a $31 million second fund earlier this year.
In the past year alone, more than $200 million has been dedicated to the pre-seed stage, with at least nine new funds launching to nurture early-stage startups.
More and more firms are setting up shop at the pre-seed stage as competition at the seed stage reaches new heights. As we’ve previously reported, monster funds are becoming increasingly active at the seed stage, muscling seed funds out of top deals with less dilutive offers. While the pre-seed stage, for the most part, remains protected from competition at the later stage, these firms still have to compete.
“Nobody wants to lose sight of a deal, so they are willing to toss small amounts of capital very early behind interesting founders,” Jain said. “But frankly, we aren’t sure if it’s good for a company to raise that much capital that early in their life cycle.”
Working with a fund that isn’t passionate about what you are building or familiar with the plights of the stage of your business is terrible for founders, adds Jain. Pairing with a focused fund like Afore, on the other hand, allows for “incentive alignment.”
Afore invests across all industries, preferring to back startups in categories “before they are categories.”
“What we are looking for is deep authenticity and passion around the product they are building,” says Banerji. “Ideas on their own aren’t enough. Founder resumes on their own aren’t enough. While we do care about all of those aspects, we get crazy about their clarity of thought in the short term.”
“We don’t take the point of view of ‘here is some money, it’s OK to lose it,’ ” he adds. “For us to invest, the founder must be all in. And we generally don’t invest in celebrity founders; we are going after the underdog founder.”
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