C2V October Notes From The Trenches
Welcome friends! It’s our favorite time of year here at C2V. The Northeast weather is peaking, football season, Halloween (aka, buy your kids costumes to cover for your plan to drink with your friends while wandering the neighborhood), and of course… our second annual LP Day!
It may be hard to believe that this is only our second in-person annual meeting (particularly for you wonderful folks who patiently digest a couple of thousand words a month from us and probably feel like we’ve been talking at you for decades). But believe it or not, we just passed the third anniversary of our first close of Fund I, and one of those years included a ban on human interaction.
In fairness, when we looked back at last year’s event, it seems like more than 12 months time has passed given how much activity we’ve seen and how much the world seems to have changed.
From a C2V perspective, the new developments were generally positive:
We closed our second seed fund, increased our total company count by 57%, and our total capital deployed by 85%.
Our portfolio companies raised 13 follow-on rounds.
We had our second and third exits.
From a bigger-picture perspective, it was more of a mixed bag.
Big picture positives:
This year’s attendance was great despite the geographic diversity of our companies and investors, with 65 total attendees (roughly one-third founders and two-thirds LPs)
We were only meeting a couple of founders and LPs in person for the first time this year (vs possibly as many as half the attendees last year).
The NASDAQ is off around 20%, late-stage venture funding is off 15-20%, and the pace of late-stage valuation growth has more than halved.
But wait, you’re saying, doesn’t this last bullet belong in the “negative” column? For some of the less discriminating, absolutely, but from where we sit, things had gotten completely out of control and needed to correct. On top of that, it’s been a surprisingly orderly reset thus far (that may not last, but so far, so good).
As a bonus, the tech sell-off seems to have stopped (for now, anyway), the billionaire-man-child compensation-rocket race, which was really getting awkward toward the end of last year.
Big picture not-so-positives:
At this time last year, the idea of 3% inflation, let alone 7-8%, seemed preposterous, and a full-scale Ukraine invasion was just a bad idea in the back of Putin’s troubled mind.
Neither the tech sell-off, nor his track record, nor basic common sense seems to have stopped VCs from writing absurdly large checks to Adam Neumann to be a glorified landlord (this time, residential instead commercial, and with Marc Andreesen instead of Neumann providing the grandiose commentary about the “transformative power” of being completely full of sh*t).
Not to be outdone by the hot mess on our side of the pond, the British Parliament appointed a head of lettuce as PM (or maybe it was that the lettuce would have been a better choice? It was hard to follow).
Meanwhile, our event itself was resoundingly positive. Having learned a critical lesson from last year’s event (that our founders and LPs get more than enough “Chris and Matt” the other 364 days), we tried to cede as much of the floor as possible to our founders who generously volunteered for panel-style discussions and LP Q&A on topics ranging from the challenges of using software to revamp archaic business practices in centuries’-old industries to the challenges of your own success as companies grow from plucky startup to budding corporation.
As usual, our LPs didn’t pull punches with their outstanding questions, and our founders made us look smart by association (for one day, anyway) with incredibly thoughtful and insightful responses. Bonus points for the couple of LPs that managed to work a shot at Chris into their questions (Brian Quinn, you’re Matt’s new favorite).
In The Trenches
After several years working remotely, C2 Ventures has a new place to call home. We are excited to have a place for you to visit us in person and get focus time together to help drive the business forward. Come visit us!
Chris flew to Hawaii this month to attend the Lobby event. Lobby brings founders, investors, and operators together to break ground on all essential topics personally and professionally - because the best conversations happen in the lobby.
Chris attended the Fierce Founders AMA to speak about how female founders can fundraise in the current economic climate. He spoke about how we will see less angel investor capital to write smaller checks. However, there is still a good deal of money in seed and early-stage funds. Portfolio companies that are focused on putting together a path to success with less capital being consumed and are ok with valuations being 25-50% less will do well.
He also talked about it being harder to get funded if you don’t have unit economics behind you. He recommended doing things slower and more conservatively.
The really good startups will get funded, even in this harsh environment.
Click here to watch the whole session.
The Emerging Manager Circle hosted its first annual Summit, an intimate gathering of emerging managers, LPs, and leaders in venture capital.
This invite-only event will bring together the industry’s most exciting emerging VC fund managers and the forward-thinking LPs backing them. Every GP attending is a firm founder, and each LP attending must have demonstrated a track record of investing significant capital into emerging fund managers.
Portfolio News
Kyle Stoner, Founder of Unreal Estate gave a shoutout to Nasdaq for featuring Unreal Estate on their tower this week.
“I’m really proud of this photo for one crucial reason; We get the chance to highlight all the money ($300M+) we’ve saved our customers.
Whenever I get to speak with our community of buyers and sellers, I always ask them what they did with the money they saved. This might be my favorite part of the job.
People pay off nagging credit card debt, invest in their kids’ college funds, or treat themselves to something special for the first time in a long time. I’ve learned that people are inspired to do some unreal things when they save tens of thousands while pursuing their home ownership dreams.”
Small Fleet Owners No Longer Compromise on Safety
Due to budget constraints, small fleets like mom-and-pop plumbing companies have struggled to overcome the technological gaps in tracking and safety. But Driver technologies are breaking the barrier and giving small fleet owners the advances they need to compete with larger trucking fleets.
DCA Live’s 2022 Red Hot Cyber Companies
The Washington, DC region has become ground zero for the cyber security industry as dozens of great entrepreneurs and innovators have chosen this area to build companies and help solve some of the most significant security issues facing our federal government, national security, and millions of American consumers.
Phalanx has been named one of the DCAs Red Hot Cyber companies of 2022. They will be celebrating in person on October 26, 2022.
C2 Ventures Leads Pre-A Round in EdgeEnergy
EdgeEnergy, an edge-of-grid power infrastructure company with patent-pending single-phase to three-phase conversion technology, is excited to announce that New York-based C2 Ventures will lead its Pre-A Round. They will use this new capital to scale the company to meet the demand for their products and solve critical power infrastructure and supply chain problems for utilities across the U.S. that threaten to slow the deployment of EV Fast Charging stations.
Job Opportunities
Paladin: Head of Data and Analytics Engineer, Full Stack Engineer, Product Manager, and Product Designer