Startup Accelerator

Auto Added by WPeMatico

Changing policy, Y Combinator cuts its pro rata stake and makes investments case-by-case

Published April 16, 2020

In a message posted to its internal communications channel earlier this week, the massive startup accelerator Y Combinator said it will change the terms of its own PPP (the YC pro rata investment program) and investing in companies raising seed and Series A rounds on a case-by-case basis.

The company began a policy of investing in every seed and Series A round for its portfolio companies back in 2015.

Since then, it has taken a 7% stake in every company that raised a priced seed and Series A round, investing in more than 300 Y Combinator companies over nearly 500 rounds.

Under its new policy, the accelerator is reducing its investment size from 7% to 4% and is only investing on a case-by-case basis going forward.

The reason for the change is that the number of companies in its portfolio has gotten too large for it to invest and some of the limited partners who back the accelerator’s operations are balking at making commitments to the pro rata investment program.

“We have significantly exceeded the funds we raised for pro ratas, and the investors who support YC do not have the appetite to fund the pro rata program at the same scale,” the accelerator wrote in a post seen by TechCrunch. “In addition, processing hundreds of follow-on rounds per year has created significant operational complexities for YC that we did not anticipate. Said simply, investing in every round for every YC company requires more capital than we want to raise and manage. We always tell startups to stay small and manage their budgets carefully. In this instance, we failed to follow our own advice.”

For entrepreneurs who take investments from the accelerator, the change is pretty significant. On the accelerator’s internal messaging board they worried about the potential optics of having the accelerator not make a follow-on commitment.

YC addressed those concerns by saying it would not make an investment decision until a company had already received an initial term sheet from a lead investor.

The changes will take effect on May 8, 2020, the investor said.

“In the future, we will no longer invest automatically in every priced seed and Series A/B round. Instead, we will exercise pro rata rights on a case-by-case basis, like other investors on your cap table,” the accelerator wrote. “We’ve heard your feedback that YC’s pro rata allocation is bigger than what some of you would prefer. So for those investments we do make, we will reduce the size of our pro rata and simplify its calculation to be a flat 4% participation right in each priced round. To calculate the size of YC’s pro rata investment in your round, simply multiply the amount of capital you are raising by 4%. If our ownership right before the round is less than 4%, we will cap our investment in the round at our then-current ownership. Our intention is not to have a super pro-rata right.”

Even with the reduced investment size, YC said it would only make investments in roughly one-third of its portfolio.

“The YC Continuity team will manage these investment decisions and will work very hard to inform you within a day or two of receiving your materials,” the accelerator wrote. “We will honor any pending pro rata investments for term sheets signed before May 8. But we wanted to communicate this message broadly so that founders can plan accordingly.”

The Urban.Us and BMW Mini accelerator focused on urban innovation names its latest cohort

Published December 4, 2019

URBAN-X, the accelerator program focused on companies developing technologies to increase the sustainability, resiliency and efficiency of cities, has selected seven companies for its latest cohort.

Operating as a partnership between BMW’s Mini brand and the early-stage investment fund Urban.Us since 2017, the accelerator has backed 51 companies, which have raised more than $100 million in the three years since its initial launch.

“Mini aims to inspire entrepreneurship, design and collaboration with innovative minds, and this ambition comes to life through URBAN-X,” said Esther Bahne, head of Mini Brand Strategy & Innovation.

Co-investors who have come in to invest behind the accelerator include: Fred Wilson, Brad Burnham, Edgar Bronfman Jr., BMW i Ventures, Draper Associates, Fontinalis Partners, Ekistic Ventures, Wireframe Ventures, Fifth Wall Ventures, Samsung NEXT, Story Ventures, Kairos, UL Ventures, Mark Cuban, Point 72 Ventures and Robert Bosch Venture Capital.

Some of the largest investments to date have been in companies like Blueprint Power, which raised $4 million for its technology that provides energy efficiency and demand response tools connecting real estate portfolios to the power grid; Roadbotics, roadway monitoring to optimize maintenance spending for cities, utilities and construction firms, which raised $11.4 million; and Versatile Natures, which provides safety and budget management tools for construction sites.

The latest companies to be accepted into the accelerator are:

ChargeLab: an electric vehicle charging management service for businesses, utilities, individuals and governments.
CoInspect: a service that automates the entire food safety and quality management workflow for restaurants and food processing facilities.
Eva: a provider of charging stations for healthcare and emergency responders operating cargo drones and associated vertical take-off vehicles.
Firmus: a machine learning-based software toolkit to expedite the construction design review process.
Hades: the developer of software to evaluate sewer and flood prevention infrastructure.
Metalmark: a new materials developer for highly efficient catalytic decomposition of air pollutants.
UsurpPower: the creator of a marketplace for sustainable finance for renewable power generation.

“URBAN-X, Urban Us and MINI are deeply committed to advancing the low carbon, resilient, high density future of our cities through technology, investment and mentorship,” said Shaun Abrahamson, URBAN-X Investment Committee and managing partner at Urban.Us, in a statement. “Startups are critical to playing an outsized role in reimagining the core sectors of our cities — like transportation, real estate and energy — and we’re thrilled to invest in this new class of creative and entrepreneurial minds.”

Ready, Set, Raise — the Y Combinator for female founders — announces second cohort

Published August 27, 2019

About one-fourth of the startups in Y Combinator’s summer batch had a female founder. Not the most disappointing statistic if you consider this: Companies with at least one female founder have raised only about 11% of venture capital funding in the U.S. in 2019, according to PitchBook. Companies with female founders exclusively have raised just 3%.

There is so much room for improvement.

To close the funding gap, programs tailored to female entrepreneurs are working tirelessly to mentor and incubate upstarts in hopes of impressing venture capitalists. Ready, Set, Raise, an accelerator program built for women, by women, is amongst the new efforts to help female and non-binary founders raise more dollars, or, at the very least, build relationships with investors.

The accelerator program, created by the Seattle-based network of startup founders and investors called the Female Founders Alliance, is today announcing its second batch of companies, a group that includes a sextech business, an AI-powered tool for podcasters and a line of workwear created for women who work on farms, construction sites and factory floors.

Ready, Set, Raise has partnered with Microsoft for Startups to provide entrepreneurs $120,000 in Azure credits, as well as technical and business mentoring from executives of the Redmond-based software giant. Other new partners include Brex and Carta, two well-funded companies that plan to lend the support of their executives to teach entrepreneurs about startup finance, valuation and fundraising terms.

“Both FFA and Microsoft recognize a major lapse in opportunities given to women and non-binary founders,” writes Ian Bergman, a managing director of Microsoft for Startups, in a statement. “We look forward to our continued work together to promote this necessary shift in the VC landscape.”

FFA’s founder and chief executive officer Leslie Feinzaig, who launched the organization in 2017, has been an outspoken advocate of diversity in entrepreneurship and venture capital, and well as providing awareness and resources for founders who are also parents.

“My experience fundraising was undeniably shaped by the fact that I am a woman, and at the time was a new mom,” Feinzaig, who previously founded an edtech startup, told Seattle Business Magazine earlier this year. “A year later, I was about to give up. Instead, I started a Facebook group, including all of the founders and tech startup leaders I knew. It was the group that I needed, made up of people who knew exactly what I was going through. That’s how the Female Founders Alliance was born.”

FFA’s Ready, Set, Raise provides its companies childcare throughout the six-week program, in which companies work one-on-one with experienced coaches ahead of a demo day that will take place on October 16th.

Here’s a look at Ready, Set, Raise’s sophomore class of startups:

Echo Echo: AI-powered tools for podcasters.
Give InKind: Coordinates support through major life events.
Honistly: A provider of extended auto warranties to help with short-term cash needs.
Juicebox It: Modernizes erotica with a chatbot that is arousing and educational.
Panty Drop: A personalized intimates shopping experience for women sizes XS-6XL.
The Labz: A platform that protects and memorializes creative content development in real time.
Tougher: Functional, well-fitted workwear for women in the skilled trades.

Here are the 82 startups from day 2 of Y Combinator’s S19 Demo Days

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

Published August 21, 2019

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

Meet 500 Startups’ 25th batch of startups

Published July 22, 2019

It’s that time of year again. When startup founders fret for weeks on end as the long-awaited Demo Day approaches. Investors pore through lists of startups participating in various accelerator programs and have their associates ping dozens of founders for coffee meetings.

Demo Day season is upon us. Soon Y Combinator’s latest cohort of startups will pitch to investors for two days, beginning August 19, and 500 Startups, another San Francisco-based accelerator program for early-stage companies, will host its own Demo Day on August 22.

We’ll report live from YC’s Demo Day next month. For now, here’s a closer look at all the startups finishing out 500 Startups’ latest program. As a reminder, through its four-month seed program, the 500 Startups seed fund invests $150,000 in participating companies in exchange for 6% equity. The companies below include a mix of fintech, digital health, edtech and e-commerce businesses, 33% of which 500 Startups says are women-led and 40% have Black or Latinx founders.

Alluva: Rewards individual users for their blockchain and crypto price predictions.
AMPAworks: An inventory management tool focused on hospitals. The startup uses computer vision AI to track and manage inventory in real time.
BeatDapp: Helps music labels and artists track their songs to collect royalties by providing real-time audit reports of streaming-play counts.
BlackCart: A try-before-you-buy app for fashion e-commerce stores.
Blue Studios: The Peloton of STEM education focused on teaching 1 billion kids STEM skills.
Blue Wire: A sports podcasting network.
Bytez: Helps developers and data scientists work faster.
Chemtech: An AI-product for manufacturing plant automatization.
Crash: A tool to help people launch their career.
Curie: A camera-based AI shopping assistant.
Dispatchr: Helps electric utilities prevent wildfires, catastrophes and crippling outages.
Docket: A system of record and workflow management SaaS for legal teams.
EINO: An AI platform that produces predictive and historical insights on localized population movement and their intention in urban areas for enterprise business users.
EZFarming: A marketplace that helps farmers finance their business and sell their produce.
FitzyTV: An internet TV platform designed to help consumers watch and record all their streaming TV channels across multiple services.
Gentem: A tool that provides instant claims reimbursements for physicians.
Glyph: A digitally knit shoe company.
Hearo Live: Turns passive media into a powerful, live social experience for games, sports, streaming and more.
Heartex: Helps companies quickly build AI products and features.
HYVE: Helps users navigate their social media universe by allowing them to follow more people.
InnerTrends: A data science service for SaaS that uncovers insights in customer onboarding, retention and engagement without the need for data scientists.
KIKI: The first app that pays you for having fun. A social marketplace where you can meet people, and buy and share experiences with them.
Lucidact Health: An AI assistant for nurses and case managers to help them know what to do faster and eliminate errors.
Nanno: The first on-demand childcare app that lets parents book vetted sitters nationwide.
Nanogrid: Building advanced cost calculation technology that enables home energy companies to ensure their customers get the most value out of their products.
NewoldStamp: An email signatures platform that turns every employee’s email into a marketing tool.
Renaissance: Allows users to earn loyalty points by listening to music.
Resonado: Reimagining audio systems for businesses with patented Flat Core Speaker technology.
RestAR: 3D capturing and product visualization for e-commerce using AI with any mobile device.
Rovilus: Developing safe and reliable battery packs for industrial vehicles and light electric aircraft.
Send4: Enables retailers to offer a seamless post-purchase experience to their customers.
Sharebee: A vertically integrated marketplace where anyone can book moving and storage in a couple of minutes for half of the traditional price.
Tradespace: A global IP marketplace for companies to buy, sell, license and invest in technology.
Visionful: Connects smart cities and autonomous vehicles leveraging AI and computer vision to provide full automation for parking and traffic monitoring.
Voogy: An IP to domain name database that allows companies to track and discover the anonymous web visitors that do not convert into their sales funnel.

A look at all the companies participating in 500 Startups’ 24th accelerator program

500 Startups brings its ‘Distro Dojo’ program to LA for post-seed startups looking for big growth

Published March 25, 2016

downtown los angeles skyline, night 500 Startups has been aiming to globalize its brand and work toward attracting the attention of young, cool companies outside the Bay Area echo chamber. This has taken 500’s investments into distant corners of the world, with dedicated funds and accelerators scoping out what has amounted to a prolific number of investments. Today, TechCrunch has learned that 500 Startups is launching… Read More

Where Vancouver’s Tech Ecosystem Goes From Here

Published August 16, 2015

Vancouverskylinepurple Compass recently published its second report on the global startup ecosystem. The report is the result of more than 200 interviews with entrepreneurs from 25 different countries, 11,000 startup surveys and insight from data partners like CrunchBase, Deloitte and Dealroom, as well as more than 60 local partners. Our CEO, Ray Walia, was also quoted; he summarized Vancouver’s strengths in… Read More