“…the line between public and private markets continues to blur.”
When Less is More
// There’s an equation for the time value of money which tells you that the money you have now is worth more than the identical sum in the future due to its potential. But, what would be the equation for the money value of time?
As we are inundated with nonstop information time is becoming a diminishing resource. And, as Econ 101 will tell us, the less there is of something, the more valuable it becomes.
Luckily, there are companies trying to solve this problem by creating value by saving you time, three examples I highlight below. I’m also trying to help in this regard via this newsletter, but I think I can add even more value and thus have started a website as my next iteration…
Pipeline
// Pipeline News is attempting to be the go-to resource of the “New Market.” As I’ve beaten the dead horse constantly in this newsletter, the private/public market will become THE market. In the extreme case, I sometimes question, what if there was no public market? How would a private company’s price react without that backstop? What are the services that would complement and supplement investors research, news, and analysis?
Newsletters are definitely an avenue to facilitate the flow of information, but this game is getting saturated. The bundling idea I think is good, as I’ve talked about before, but that’s starting to become overwhelming. Because email is valuable property, you have to tread lightly. Once someone lets you in the door to the party, you shouldn’t sneak in ten of your friends. And if/when you are let in the door, it’s only polite to bring something of value for the host.
I believe there is value to be created in sourcing the most relevant news, coupled with original commentary and analysis, to help people navigate these unchartered waters. Stated again, it’s impossible to ingest all of the information that is thrown at you. But, there is, or should be a way to strategically and efficiently find what is most relevant to you.
(Politically agnostic) When I think of websites like the Huffington Post or the DrudgeReport, and now Knewz, these are simple yet effective ways to drown out some of the noise. These sites have focused on niche audiences and have created substantial monetary returns by saving people time.
I’m thankful to be invited into a persons’ email, but at the same time, I shouldn’t presume that I get to pop in whenever I want. Therefore, I think the reader should have the option to opt-in. This is what I’m going to try and do with Pipeline. Pipeline will be updated, sometimes daily, most likely weekly, where I will populate the site with the most relevant private/public news along with outside commentary I find interesting in addition to original analysis from me, and hopefully outside contributors down the road.
Quick disclaimer, this is a work in progress as I calibrate both the newsletter and website based on feedback. There are a lot of links each week that I could include in the newsletter, so most of the curation will be pushed to the website. Also, I am going to start releasing the newsletter bi-monthly so I can dig a little deeper and focus more on analysis and research to add more value.
Thanks for checking it out. Feedback welcome.
h/t to MZ for all the help
Companies to Know
// Following the theme of this the newsletter, here are three companies that are creating value by saving you time.
~ Seeing how I have over 500 books in my Amazon cart, Blinkist is something I probably need. Blinkist is an app that allows its users to read the most important insights from non-fiction books in 15 minutes. The company has raised $38.4M to date and currently sits at a Series C. Prominent investors include Greycroft and Insight Partners.
~ Otter.ai is a Los Altos, California-based technology company that develops speech to text transcription applications using artificial intelligence and machine learning. The company’s most recent raise was Series B in January of this year, bringing total funding to $23M. DFJ DragonFund, Draper Associates, and Bridgewater Associates are three of the company’s more notable investors. The company recently announced a partnership with Zoom with its Otter Live Notes which is a new feature that enables meeting hosts to provide live transcription and collaborative note-taking to all participants.
~ I always thought this would be a good idea, and had thought about it as a possible business model, so I am a big fan of PodcastNotes. Once a week they send out their newsletter which highlights ~10 popular podcasts from the previous week and the key findings for each. Similar to my Amazon cart, my podcast backlog is becoming insurmountable.
Analysis
// Brad Gerstner of Altimeter Capital, who I highlighted about a few weeks ago, who also just crushed it with his early bet on Snowflake, announced a SPAC a few days ago. Similar to my quick analysis of Dragoneer and Ribbit Capital, I tried to handicap three companies within Gerstner’s portfolio that could merge with the SPAC. For signals, I considered stage, money raised, momentum, and familiarity with the company and industry. See the Dragoneer post for my rationale.
My top pick is Cockroach Labs, the startup that provides the CockroachDB next-generation SQL database which allows organizations to move and manage critical transactional data in the cloud. The company has raised $195.1M to date, with an $86.6M Series D in May of this year. Altimeter was a lead investor in both its Series C and D. A who’s who of investors are on the company’s cap table including; Bond, Benchmark, GV, Index Ventures, Redpoint Ventures, Sequoia Capital, Tiger Capital, and FirstMark Capital. Even if Altimeter chooses another company for its SPAC, Cockroach Labs’s price is only going higher from here. The “price action” looks similar to the trajectory of Snowflake which also raised close to $200M at its Series D.
Coming in second and third are Clumio and Sigma Computing.
Clumio is a data backup and recovery software-as-a-service (SaaS) provider. The company has raised $186M with its latest round a Series C in November 2019. That round was for $135M which Altimeter co-led with Sutter Hill Ventures. Sutter Hill Ventures also led its Series A and B. Sutter Hill should be capitalized, underlined, and highlighted as it was the venture firm that led Snowflakes Series A.
Sigma, a cloud analytics and business intelligence platform, has only raised a total of $58M, $30M of which in its last round, a Series B in November 2019. This is probably a long shot for the SPAC, but keep an eye on this company as Altimeter co-led the Series B with, once again, Sutter Hill Ventures.
*all data and definitions from Crunchbase
Analysis x 2
// Bessemer Venture Partners recently published a handful of their investment memos. It’s a good exercise for those who might want to see how a successful VC firm approaches the investment decision.
“One pattern that consistently emerges is that Bessemer’s best investment decisions centered on people. In retrospect, the early products themselves are barely recognizable today. Rather, passionate, analytical and relentless founders zigged and zagged their way to that elusive “product-market fit”, and these memos provide a glimpse of those winning entrepreneurs before they were famous.”
Here is the memo on Shopify as an example.
Listen
// Harry Stebbings talks SPACs, IPOs, and founder advice with Kevin Hartz and Troy Steckenrider on The Twenty Minute VC.
Here are the key takeaways from PodcastNotes.
// Thanks.
This newsletter is created and authored by Bryce Tolman and is published and provided for informational purposes only. The information in the newsletter constitutes the Author’s own opinions. None of the information contained in the newsletter constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You understand that the Author is not advising, and will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in the newsletter may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.