C2V May 2021 Notes from the Trenches

Welcome friends! It’s 75 and sunny here in NY, we’re meeting with other humans in person (and we can even see their faces!), we have a new company to talk about and our second fund is nearly up and running. Not even the 28 - 0 shellacking Matt’s softball team took the other night (or their 0 - 4 start) can bring us down.

We’re excited to introduce you to our new company, Copper, but first…

Putting the Unicorn Out to Pasture

According to the internet (so we’re at least 50% sure this is accurate), the first use of the term “unicorn” to describe billion-dollar-plus startups was in a 2013 TechCrunch post by Aileen Lee, Founder and Managing Partner of Cowboy Ventures. Since then it’s had as good a run as any moniker (google the word and you’ll see more links related to startups than to horses with horns), but eight years later, its time has passed.

When Ms. Lee coined the term unicorn in 2013, there were an estimated 39 startups that fit the description; today there are 682, including 50 that first reached “unicorn” status in March of this year alone. The 125 newly minted private unicorns in the first 80 days of 2021 are more than all last year, and that doesn’t include the 51 exits of $1 billion or more in this year’s first 3 months.

Data from CB Insights & C2V Research

Bottom line – there is no longer anything “unusual, rare or unique” (Webster’s definition of a unicorn) about a $1 billion startup valuation.

So where do we go from here?

We suggest changing the $1 billion designation to the “White Tail Deer”:

1) The reaction most people have to seeing a deer in their neighborhood and to reading about that day’s newest $1 billion valuation are similar. You generally stop and admire them for a second (but only a second) and most likely forget about it 10 minutes later.

2) Much like today’s $1 billion startup cohort, in a lot of cities and suburbs there are now way too many deer, most of whom are slowly dying as they fight over a resource pool that can’t sustain them all, gradually destroying their ecosystems in the process, and occasionally running into traffic, causing real destruction and ending up a mangled mess on the side of the road.

It’s not glamorous, but it’s not wrong either. You had a nice run, unicorn, have fun on the golf course.

Our Latest Investment

Copper is a "smart" IoT printer cord containing a tiny Linux computer, that replaces the existing cord connecting any Point-of-Sale (“POS”) terminal to its receipt printer.

This simple swap out of a single cord takes less than a minute to complete and instantly upgrades any legacy POS systems to a cloud-connected platform in addition to adding a QR code to each receipt, enabling contactless payments and bill splitting. Restaurant owners can then access, visualize and download historical sales, SKU and other receipt data by date, customer name, table number, employee, etc., allowing them to optimize their business and menu offerings.

The true genius of Copper’s product, however, is that does not require a full POS system overhaul. Among other advantages this:

  1. Removes a significant barrier to sales conversions, as many restaurants are reluctant to change hardware for a number of reasons, including the non-trivial time and effort required to retrain its low-skilled and highly mobile labor force, and

  2. Allows Copper to partner with both the existing POS hardware providers and payment processors who still control roughly 80% of the market, leveraging them as sales channel partners, rather than having to go to each business directly as Toast, Square and other cloud-data POS companies must do (making scaling significantly easier and more cost-efficient).

Copper’s wifi-enabled smart cable also interfaces directly with third-party online ordering platforms (e.g., Seamless, GrubHub), eliminating the need for multiple hardware devices in the kitchen and the manual step of re-keying online orders into their current POS system.

As brick and mortar merchants increasingly adopt data science tools to help them compete with ecommerce, smart POS systems will eventually become ubiquitous, and we see Copper as a better, more easily scalable version of this than what is currently available.

Portfolio Companies in the News

Other C2V News

The Superpowers podcast is back! Season 3 kicks off this week with Chris’s interview of Kara Goldin, Founder and CEO of Hint Water.

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