How to raise your first VC fund

As a founding member of TI Platform Management, I have quarterbacked more than $200 million in investments into first-time fund managers around the world. That portfolio includes being one of the first institutional checks into Atomic Labs ($170+ million, SaaStr ($160+ million) and Entrepreneur First ($140+ million), among many others.

Having seen successful returns as a fund manager and an early-stage VC (as well as recently raising my own angel fund), I’ve formulated several best practices and strategies for investing in fund managers. If you want to raise your first fund, here’s how.

Understand the mentality of an LP

Just as VCs bucket startup founders into categories, limited partners (the investors in your venture fund, also known as “LPs”) have an unwritten way of categorizing venture managers. The vast majority fit one of three archetypes:

  • Former founder/operator turned VC
  • Spin-off manager from a mega fund
  • Angel investor with a strong track record

Here’s how each is perceived by institutional LPs and the unique blockers they have to overcome:

Former founder/operator turned VC

Having been through the journey of starting a company, former founders/operators often have strong intuition in identifying founders and an empathy/rapport that raises their win-rate on deals. Additionally, having built an innovative company, they can bring special insights in where the market is headed. Building a company, however, requires different skills from founding a fund.

If you’re a former founder/operator turned VC, expect LPs to ask questions that suss out:

Data startup Axiom secures $4M from Crane Venture Partners, emerges from stealth

Axiom, a startup that helps companies deal with their internal data, has secured a new $4m seed round led by UK-based Crane Venture Partners, with participation from LocalGlobe, Fly VC and Mango Capital. Notable angel investors include former Xamarin founder and current GitHub CEO Nat Friedman and Heroku co-founder Adam Wiggins. The company is also emerging from a relative stealth mode to reveal that is has now raised $7m in funding since it was founded in 2017.

The company says it is also launching with an enterprise-grade solution to manage and analyze machine data “at any scale, across any type of infrastructure”. Axiom gives DevOps teams a cloud-native, enterprise-grade solution to store and query their data all the time in one interface – without the overhead of maintaining and scaling data infrastructure.

DevOps teams have spent a great deal of time and money managing their infrastructure, but often without being able to own and analyze their machine data. Despite all the tools at hand, managing and analyzing critical data has been difficult, slow and resource-intensive, taking up far too much money and time for organizations. This is what Axiom is addressing with its platform to manage machine data and surface insights, more cheaply, they say, that other solutions.

Co-founder and CEO Neil Jagdish Patel told TechCrunch: “DevOps teams are stuck under the pressure of that, because it’s up to them to deliver a solution to that problem. And the solutions that existed are quite, well, they’re very complex. They’re very expensive to run and time-consuming. So with Axiom, our goal is to try and reduce the time to solve data problems, but also allow businesses to store more data to query at whenever they want.”

Why did they work with Crane? “We needed to figure out how enterprise sales work and how to take this product to market in a way that makes sense for the people who need it. We spoke to different investors, but when I sat down with Crane they just understood where we were. They have this razor-sharp focus on how they get you to market and how you make sure your sales process and marketing is a success. It’s been beneficial to us as were three engineers, so you need that,” said Jagdish.

Commenting, Scott Sage, Founder and  Partner at Crane Venture Partners added: “Neil, Seif and Gord are a proven team that have created successful products that millions of developers use. We are proud to invest in Axiom to allow them to build a business helping DevOps teams turn logging challenges from a resource-intense problem to a business advantage.”

Axiom co-founders Neil Jagdish Patel, Seif Lotfy and Gord Allott, previously created Xamarin Insights that enabled developers to monitor and analyse mobile app performance in real-time for Xamarin, the open-source cross-platform app development framework. Xamarin was acquired by Microsoft for between $400 and $500 million in 2016. Before working at Xamarin, the co-founders also worked together at Canonical, the private commercial company behind the Ubuntu Project.

How Kubernetes came to rule the world

Open source has become the de facto standard for building the software that underpins the complex infrastructure that runs everything from your favorite mobile apps to your company’s barely usable expense tool. Over the course of the last few years, a lot of new software is being deployed on top of Kubernetes, the tool for managing large server clusters running containers that Google open sourced five years ago.

Today, Kubernetes is the fastest growing open-source project and earlier this month, the bi-annual KubeCon+CloudNativeCon conference attracted almost 8,000 developers to sunny Barcelona, Spain, making the event the largest open-source conference in Europe yet.

To talk about how Kubernetes came to be, I sat down with Craig McLuckie, one of the co-founders of Kubernetes at Google (who then went on to his own startup, Heptio, which he sold to VMware); Tim Hockin, another Googler who was an early member on the project and was also on Google’s Borg team; and Gabe Monroy, who co-founded Deis, one of the first successful Kubernetes startups, and then sold it to Microsoft, where he is now the lead PM for Azure Container Compute (and often the public face of Microsoft’s efforts in this area).

Google’s cloud and the rise of containers

To set the stage a bit, it’s worth remembering where Google Cloud and container management were five years ago.

Startup spending guide: Where to spend money

money-arrows There is no shortage of advice when it comes to which tools software companies should use to run their businesses. We’ve all come across numerous “Top 100 resources for startups”-type posts at least once as we Google our way to entrepreneurial success. But after reading just one of them, it’s not hard to go from “I have no idea what’s out there” to… Read More

Y Combinator-backed Convox launches Grid service to automate code deployment

Convox Grid.

Convox, a startup seeking to simplify the deployment of applications on the Amazon Web Services public cloud, is launching today a new web service for automatically running new versions of applications as new code gets checked in on GitHub.

The new Grid service, which has free and paid tiers, can also integrate with companies’ Slack channels in order to send notifications about events. The tool can allow multiple team members to use application infrastructure.

The big story here is that Convox is becoming more useful at more stages of the journey of developing applications. It’s not just an easier way to host using an open-source tool — it’s now also a continuous delivery tool.

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Why did Convox do this? For one thing, because people could use additional tools as they seek to deploy code on Convox’s open-source Rack platform as a service (PaaS) across different infrastructure for different stages of application development.

“Grid makes it easy to keep track of and manage multiple Racks. You can give the racks easy names like ‘production’ and ‘dev’ and then switch between them on the CLI [command line interface] with commands like ‘convox switch production’ instead of having to remember a hostname for the rack,” Convox cofounder Matt Manning told VentureBeat in an email.

Convox also has business reasons for releasing Grid: It’s a big step toward monetization. If you’re only working with public repos, then you may not have to pay anything for it each month. But if you want to use it with private repositories on GitHub, the service costs money.

The service will become more fleshed out in the future, with more integrations of third-party tools, including full-featured continuous-integration/continuous-delivery services, Manning said.

San Francisco-based Convox participated in the summer 2015 batch of Silicon Valley accelerator Y Combinator.

A blog post on Convox Grid has more on the new feature.

Facebook Parse now lets you easily deploy mobile apps to Heroku

Mark Zuckerberg speaks at the Facebook Parse Developer Day in 2013.

The Facebook-owned Parse mobile-backend-as-a-service (MBaaS) cloud for hosting mobile apps is announcing today new tools that will make it easier for developers to run apps on the Heroku platform-as-a-service (PaaS) cloud from within Parse’s tools.

The news is interesting because, for the most part, building apps with Parse has necessarily meant deploying apps to Parse, which runs on top of the Amazon Web Services (AWS) public cloud. Now Parse is becoming more open when it comes to where people run apps.

“We’ve created a smooth experience for you to run code on either Heroku or the Parse Cloud, and we’re excited about the opportunities this combination has to offer,” Parse engineer Pavan Athivarapu wrote in a blog post on the news.

The integration into Parse’s command line interface is a result of a partnership with Salesforce, which Heroku bought in 2010, Athivarapu wrote.

Just like Parse, Heroku runs on top of AWS. Still, this is a win for Salesforce, because it’s picking up a new on-ramp for mobile app workloads.

Competing MBaaS services, such as Kinvey, provide deployment options across multiple clouds. AWS itself announced a full-fledged MBaaS, AWS Mobile Hub, earlier this month.

More information:

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