C2V November Notes From The Trenches
Welcome friends! Well, it’s that time of year when we take a step back and reflect on all of the things we’re thankful for in life.
We thought we’d expand the circle of appreciation this year. In addition to the people without whose support and dedication we wouldn’t be here, we’re giving thanks to those we can consistently count on for a laugh and those at whom we have to laugh because otherwise, we’d be crying (and as male children of the ‘80s, taught that the remedy for any physical or emotional injury was to (literally or figuratively) “rub some dirt on it and get back in there,” crying is out, so we process all emotion via dark humor instead).
So, without further ado, let’s open the cornucopia of appreciation.
The Serious Bit
Our LPs
Their faith in us continues to be heartening and humbling, and their ongoing support and counsel are invaluable.
Our founders
Their unceasing passion, ingenuity, and determination are truly inspiring, and seeing that payoff ultimately makes this whole thing worthwhile for us.
Our families
It’s no small ask to put up with the long hours and high stress, not to mention the killer emerging-VC sales pitch (“Just think of the upside that we have to look forward to when our big winners are exiting… in 8-12 years… probably… you know, if it turns out we actually know what we’re doing…”).
Our readers
We really enjoy producing this newsletter every month, and our special brand of commentary isn’t for everyone (including, often, the prior group), so we very much appreciate your continuing to read and provide us with feedback.
The Fun Stuff
Web3
Sadly, the submissions from this sector that have brought us so much joy over the past 4 or 5 years have dwindled to a trickle these days. Still, we’ve kept our pan in the water because you never know when a big gold nugget will float by… like a pitch for a new Metaverse app… via an email… written by a cockroach…
There’s a lengthy middle part that we’ll skip, where Mr. Roach may have described a product (we were having trouble concentrating at that point) before signing off in style:
Bit of a blurry screengrab, but that last one is in fact a gif of a man being attacked by a giant cockroach. Long live Web3.
Adam Neumann (w/assists from Softbank & a16z)
He’s the comedy gift that keeps on giving. Now that WeWork has officially filed for bankruptcy, we thought it was time to honor this perfect embodiment of just about every negative startup founder stereotype and his two largest backers (both kind enough to do the same for negative VC stereotypes).
Some highlights from Neumann’s remarkable run to the Forbes Billionaire List:
Circa 2002: Neumann conceives of the idea of WeLive (the residential version of WeWork) for a college entrepreneurship competition which, according to a Business Insider recounting, “was killed in the competition's second round, because a professor didn't think Neumann would be able to raise enough money ‘to change the way people live.’" (You know what they say — those who can consistently espouse utter nonsense with a straight face move to SF and light other people’s money on fire; those who can’t, teach).
August 2017: Masayoshi Son, head of Softbank’s tech-focused Vision Fund, commits $4.4 billion to WeWork after a single 12-minute meeting (leaving us all to wonder whether the 13th minute would have revealed that this wasn’t a tech company so much as a poorly structured real estate business, lavishly veneered in bullsh-t).
September 2019: Neumann opens the kimono and then some, with the S-1 (IPO) filing to end all S-1 filings.
September 2019: Absolutely horrified by what was under that kimono, WeWork’s board fires Neumann (serious question: had they not actually read the S-1 before it was filed with the SEC?), who leaves behind little more than a pile of ashes where fourteen billion dollars once stood and a few delightful pearls of high-school-stoner-worthy wisdom (e.g., “the power of We — greater than any one of us, but inside each of us“)… and is handed a $500mm check on his way out the door.
Every day since September 2019: Neumann remains not incarcerated (easily his most impressive achievement so far).
August 2022: Andreessen Horowitz hands its largest check ever ($350mm!) to Neumann to pursue another preposterous real estate idea that has nothing to do with tech but somehow gets to call itself tech (TBD if we should expect any consciousness elevation from this one, though).
Today: WeWork backers, zero; Neumann, 2.2 billion.
America, f—k yeah.
Overplayed hands
To the small subset of lead investors who read in Tech Crunch (or wherever) that it’s now a buyer’s market and are laying it on thick with everything from upending cap structures and board compositions to doling out pre-money warrants and options like they’re Halloween candy.
Hey, when you show up after all the hardest work and de-risking has been done, with that heavily conditioned, middling check that barely covers a quarter of the round, you deserve to strut around like you run the joint. And don’t worry, no one’s keeping receipts for when your leverage dwindles in a few quarters.
Utterly pointless, millennia-old… er… weapon-measuring contests that just won’t end
After having our Fund I raise nearly derailed by a global pandemic and the back half of our Fund II raise by a post-bubble crash, our Fund III raise (kicking off early next year) was in danger of being impacted only by our merits as a fund manager. But since 2,000 years of repeatedly fighting the same fight and accomplishing absolutely nothing in the process hasn’t dissuaded the various Middle East factions from running it back once more, we may have World War III to contend with this time. Let’s face it, though: our future memoirs just won’t pack the same punch if we suddenly face only the basic, run-of-the-mill, impossibly long odds.
Rough Pitches
99% of the emails and decks we get are serious, earnest pitches from legitimate people with legitimate ideas, but then there’s that other 1%…
Some recent highlights:
Best of the Email Subject Lines
“To get our flying cars, we need flying roads” (That’s deep)
“We are all digits in God's Computer” (That’s deeper)
“Please ignore if you hate money.” (That… is genius; we’re definitely stealing it for our next fundraise)
Best of the product “descriptions”
“A gamified crypto casino” (Also a good way to sum up the early 2020s)
“As you know, [startup-no-one-has-heard-of] is at the forefront of a digital revolution, challenging the status quo of IT development.” (Oh, we know)
“Roblox for businesses” (F—-ing Millennials… )
Being on the right, and somehow also wrong, side of history
When you’re among the very few VCs who realize in real time that the emperor is naked, are too seasoned, scarred, or cynical (or maybe all three) to be susceptible to the rampant FOMO epidemic, end up with a portfolio that couldn’t contrast more favorably to the torrent of write-downs now plaguing institutional LPs’ fund investments, you go to cash in on your patience and (relative) wisdom… and those LPs are all pausing on new VC investments while they sort out the mess they walked into back then (while passing on your funds, twice).
Never has being so right felt so wrong. Or something.
In all seriousness, though, a very happy Thanksgiving to all! We love you all dearly and hope you’ll keep reading in 2024 and beyond.
New Investment
Beagle Labs, our latest investment in our Pre-Seed Tributary Fund, marks our third overall in the InsureTech category. While our prior two (Koffie Financial and Driver Technologies) are focused on modernizing data and underwriting for the transportation sector, Beagle’s product addresses inefficiencies in claims management in the property/casualty sector.
While administrative inefficiencies and delays in claims processing are a significant problem for the entire insurance industry, these issues are particularly acute for the property/casualty sector. In addition to the fact that nearly all P&C claims require onsite inspection, claims volumes are heavily impacted by weather events, making them extremely volatile. The increase in extreme weather events in recent years has driven a 40% increase in P&C claims over the past three years alone, and the industry now spends $12 billion per year on claims administration (not the claims themselves, just the administration of those claims).
Having lived the problem firsthand (three of Beagle’s four founders come from the insurance industry), they’ve built their initial subscription platform to address the largest pain points for insurance adjusters and claims administrators (and are selling to both).
On the adjuster side, Beagle provides field agents with a greatly simplified workflow, where they can write observations, measurements, and estimates and take and attach pictures directly into the final report template, which Beagle’s software automatically checks for (and alerts users to) missing information in real-time. Not only does this eliminate the extra step of transcribing notes and uploading pictures taken in the field (a 15-20% time savings for each report), but it also significantly reduces errors or omissions that may require re-submissions or, in some cases, re-inspections.
For administrators, the problems begin with finding and engaging adjusters with appropriate profiles (particularly for weather-related spikes in claims), for which Beagle is building a catalog of adjusters (numbering well over 1,000 already) from whom administrators can instantly assign claims. In addition to the improved speed and accuracy of the final reports, Beagle also solves the lack of visibility into the status and expected delivery of adjusters’ reports (another major pain point), giving administrators real-time access to adjusters’ progress.
We’ve seen impressive product-market fit thus far, with Beagle’s volumes scaling from a few early adopters to more than 200 claims a month just in the time between our initial meeting with them and closing the round, and we’re excited to help them expand from here.
C2V Watercooler
We are so stoked to see Olive recognized on the biggest stage in Times Square!
Portfolio Highlights
Medmo Raises $9 Million to Streamline Medical Imaging
Medical imaging technology company Medmo announced a $9 million funding round led by Lerer Hippeau alongside existing investors Jerusalem Venture Partners (JVP), C2 Ventures, and Stone IsraVentures. In addition, an array of notable angel investors participated, including Elliot Cohen, founder of PillPack (acquired by Amazon), and Klara (acquired by ModMed) Co-founders Simon Bolz and Dr. Simon Lorenz. The additional financing will further accelerate the company’s rapid expansion and platform development.
The 2023 New C-Suite Is Here to Shake Things Up
In case you’d mistakenly assumed that corporate America has been making the progress we’ve all been promised, only 28 percent of corner-office roles are currently occupied by women—and only 6 percent of those roles are filled by women of color. Which makes the triumphs achieved by the 13 founders down below all the more wow-worthy.
Steelhead is Shattering Industry Norms
Steelhead Technologies, a pioneering manufacturing software solutions industry leader, is thrilled to announce the remarkable achievement of the first-ever 36-hour ERP deployment at A1 Paint, Powder & Sandblasting LLC in Kansas City. The project commenced on Thursday, November 2nd, and concluded with a triumphant celebration on Friday, November 3rd at 6 p.m.
USAA Pitch Competition Winners Announced
On October 19th, 2023, in Washington, DC, seven companies competed at the USAA Pitch Competition Powered by Bunker Labs. All applicants were drawn from the security, data, AI systems, fintech, insurtech, and enterprise infrastructure industries and pitched to earn their share of $85,000 in prize money!
Global Ethanol Summit
CEO of StepOne Tech, Tuomo Isokivijärvi, was part of the Global Ethanol Summit in Reston, Virginia. The event gathered together ethanol industry stakeholders from around the world. There was an in-depth discussion about how sustainably made renewable fuels will be a big part of humanity's overall low-carbon solution in road traffic as the need for transportation is projected to keep increasing in the next decades.
Eskuad Secures Spot in 2024 Atlanta Metro Export Challenge Cohort
In an exciting development, Eskuad, a company specializing in software solutions for the logistics industry, has been selected as one of the 10 companies for the prestigious 2024 Atlanta Metro Export Challenge (MEC) cohort. This highly competitive program, now in its eighth year, is organized by the Metro Atlanta Chamber (MAC) and aims to support small and medium-sized enterprises in expanding their global business footprint.
Wats: featured on Fully Occupied Podcast
Meredith Danberg-Ficarelli is the Co-Founder and CEO of WATS (Waste Administration and Tracking Software). She joins Matt to talk about how commercial buildings can improve the way they handle all the waste produced on a daily basis. Meredith shares how she built WATS to help owners and tenants track all the waste generated through their commercial spaces.