Who are The Global top 250 Private Companies ?

The Innovation.io Festival in Silicon Valley gathers the brightest minds and top entrepreneurs, investors, and corporate dealmakers in the global Silicon Valley. At this festival, the Global top 250 companies will be honoured. 

The Global Top 250 are the break-out private companies that are changing the way we work and play.

They leverage new innovations and business models to disrupt the media, entertainment, finance, cloud (infrastructure and B2B services), health (including devices), education, machines (robots, drones and electric cars), sustainability (energy, food and recycling), retail (consumer goods and services), and Internet of Things industry sectors. 

The Global Top 250 companies are selected based on a set of five criteria: 

• founders and management team, 
• innovative advantage, 
• target market size, 
• category leadership position, 
• projected growth and funding and 
• exit strategy. 

Current list of private companies nominated for the Alchemist.io Global Top 250 list:

3VR

4Info

51Xinyongka

Accelergy

Acquia

Act-On Software

Actifio

Adaptive Biotechnologies

ADARA

Addepar

Adelphic

Adroll

Adyen

Affirmed Networks

Africa Internet Group

Agari

Age of Learning

Agiliance

Airbnb

Aiwujiwu

AlienVault

Anaplan

Anki

Ant Financial

Apontador

App Annie

appbackr

AppDirect

AppDynamics

AppEnsure

Apperian

Applause

AppNexus

Apsalar

Apttus

Apus Group

Aria Systems

Asana

August

Auto1 Group

Automattic

Avant

AvantCredit (subsidiary of Avant)

AVAST Software

Banjo

Beepi

BeiBei

Benu Networks

BetterCloud

Betterment

Beyond the Rack

Big Switch Networks

Bigcommerce

Bill.com

Birchbox

Birst

BlaBlaCar

Blazent

Blippar

Bloom Energy

Blue Apron

Blue Bottle Coffee

Blue Jeans Network

BlueLine Grid

Blurb

BOKU

Bonobos

Borqs

BrightSource Energy

Business Insider

busuu

BuzzFeed

C3 IoT

Capillary Technologies

Capriza

Carbon3D

Cardlytics

CareCloud

CashStar

Celtra

Centrify

China Internet Plus Holding

China Rapid Finance

chloe + isabel

Choicestream

CJ Games

Clarizen

ClearStory Data

Cloudera

Cloudflare

CloudPhysics

CloudVelox

Coinbase

CollabNet

Compass

Conductor

ConnectAndSell

ContextLogic (dba. Wish)

Conviva

Cool Planet Energy Systems

Cortera (eCredit.com)

Coskata

Couchbase

Coupang

Credit Karma

Cumulus Networks

CureVac

Cyanogen

Cylance

d.light design

Dada

DailyBreak

DailyWorth

Datameer

Dataminr

DataSift

DataStax

DataXu

Datto

Decolar

Deem

Deliveroo

Delivery Agent

Delivery Hero

Delphix

Desire2Learn

DHgate

Didi Chuxing

DJI Innovations

Docker

DocuSign

Dollar Shave Club

DOmedia

DOMO

DoubleDutch

DraftKings

DrawBridge

DriveWyze

Dropbox

Dstillery

Dwolla

EcoMotors

Egenera

Ele.me

Elementum

Ensighten

EnStorage

etouches

Eventbrite

EverFi

Expensify

Fanatics

FanDuel

Fanli

Farfetch

FEM, Inc.

Flatiron Health

Flipboard

Flipkart

Flite

ForeScout

Forescout Technologies

Foursquare

Freshbooks

Funding Circle

Funny or Die

Garena Online

Gigya

GitHub

Gigya

GitHub

Glassdoor

Global Fashion Group

Go-Jek

GrabTaxi

Greensky

GuaHao

Guazi

Gusto

Handy

Heliatek

HelloFresh

Hike

Hinge

Honest Co.

HootSuite

HotelTonight

Houzz

Huimin

Hulu

Huimin

Hulu

Human Longevity

Icarbonx

Illumio

Infinidat

Infor

InMobi

InnoPath

InsideSales.com

Instacart

InstaMed

Instart Logic

Intacct

Intarcia Therapeutics

Integral Ad Science

Interana

Ironsource

ItsOn

iTutorGroup

iwjw.com

iYogi

Jasper

Jawbone

Jiuxian

Jivox

Jobvite

Joyus

JustFab

Kabam

Kabbage

KaChing

Kaltura

Kenandy

Kenshoo

Kiip

Kik Interactive

Klarna

Knewton

Koudai Gouwu

Lakala.com

Lamabang

LeSports

Lianjia

Liepin

Lithium Technologies

Localytics

Lookout

Lu.com

Lucidworks

Lufax

Lumos Labs

Lyft

Lyst

Lytro

Magic Leap

Magisto

MapR

MarkLogic

Marqeta

MC10

Medallia

MediaFriends

MediaMath

Medium

Medsphere

Meitu

Meituan-Dianping

MemSQL

Mendix

Mercari

Mesoshphere

MetaMarkets

Mia.com

Midokura

MindMaze

Mirantis

Mixpanel

Moat

Mocana

Moda Operandi

Moderna

Mofang Apartments

Mogujie

moka5

MongoDB

Motif

Mozido

Mu Sigma

Mulesoft

Munchery

Music Mastermind

N3twork

Nativo

Nerdwallet

NewsCred

Nexenta

Nextdoor

NinthDecimal

OfferUp

Okta

Ola Cabs (ANI Technologies)

Omnifone

One97 Communications

OneSpot

Optimizely

OrganizedWisdom

Oscar Health Insurance Co.

Outbrain

OVH

Oxford Nanopore Technologies

Palantir Technologies

Paltalk

Panshi

Payfone

PeerNova

Personal Capital

Phunware

Pica8

Pinterest

Pivotal

Plexxi

PLOW

 

PLUMGrid

Pluralsight

Pluribus Networks

Pocket Gems

Poshmark

Postmates

PowerLinks Media

Practice Fusion

Promasidor Holdings

Prosper Maketplace

Proteus Digital Health

PubMatic

Pulsepoint

Qliance Medical Management

Qualia

Qualtrics

Quanergy Systems

Quikr India

Quirky

Quixey

Quora

RadiumOne

Radius

Raise Marketplace

Raptr

Raydiance

Razer

RazorGator

RebelMouse

Remind

Rent The Runway

Retailnext

RichRelevance

RiskIQ

Robinhood

RockYou

Roku

Rong360

Rover.com

Royole Corporation

Samanage

Samba Tech

SavingStar

Scribd

SessionM

ShareThis

Shazam

Shopclues

Shyp

SigFig

SilkRoad Technology

SimpleTuition

SimpliVity

Sitrion (fka NewsGator)

Skillshare

Skyhigh Networks

Skyscanner

Slack

Smartling

SMS Assist

Smule

Snapchat

Snapdeal

SnapLogic

SOASTA

Social Finance (SoFi)

SoFi

Solarflare Communications

Sonos

SoundCloud

SoundHound

Souq

SpaceX

Spiceworks

Splice Machine

Spongecell

Spotify

Spredfast

Sprig

Sprinklr

SST, Inc. (fna ShotSpotter)

Stardoll

StellaService

Stormwind

Stratified Medical

Stripe

STX Entertainment

SugarCRM

Surf Air

SurveyMonkey

Switch Communications (UberConference)

Taboola

Tango

TangoMe

Tanium

Tapjoy

TaskRabbit

Taulia

Teespring

Tegile Systems

Telly (fna TwitVid)

Ten-X

textPlus

The Honest Company

Theranos

ThirdLove

Thismoment

ThousandEyes

Threatmetrix

Thumbtack

TidalTV

Tintri

Tipalti Solutions

TransferWise

Trendy Group International

Tujia

Turn

TutorGroup

Uber

UBTECH Robotics

Udacity

Udemy

Unity Technologies

Uptake

Urban Airship

VANCL

vArmour

Vast

Vibes

Vice Media

Viptela

Visible Measures

Vox Media

Weiying

WePiao

WeWork

Wickr

Wifimaster

Wish (ContextLogic)

xAd

Xiaohongshu

Xiaomi

Xignite

XMOS

Xuanyixia

Yapta

Yello Mobile

Yik Yak

YouMail

Zenefits

Zeta Interactive

Zetta

Zhangyue

Zhong An Insurance

Zocdoc

Zomato Media

Zoox

Zscaler

Zuora

Alchemist.io is a  social media network informing and connecting company builders and thought leaders operating in the global innovation industries.  

“We are entering into an era of accelerating transformation across all industries,” explains Alchemist.io founder and editor, Tony Perkins. 

“The Alchemist.io provides an insider view as Silicon Valley consolidates its economic power, and spreads it’s innovation around the planet.”  the network’s ultimate mission is to help professionals build better careers and better companies.

 Alchemist.io leads the industry by empowering its members, partners, contributing bloggers, and advertisers meet, connect, learn and collaborate like no other media brand.

Fishburner appoints leading marketing and advertising guru to its board

Fishburners appoints Bilyana Smith to their board

Fishburners creates highly-scalable Australian tech startups, and has seen the birth of over 800 startups in its Sydney, Brisbane and Shanghai spaces over gthe past 5 years. 

Bilyana Smith is an experienced CEO,strategic advisor and Angel Investor, with over 20 years’ experience in executive and non-executive roles in creative industries, media, marketing and communications. Previously CEO of Emerystudio, Executive Director with Clemenger Group Limited, Director of Marketing and Communications at Barangaroo. She is an angel investor with Scale Investors.

“I am a firm believer in the power of creativity and innovation to drive economic and social growth, and am thrilled to join the Fishburners board at the time when the entrepreneurship in Australia is gathering pace.” – Bilyana Smith

“The board consists of two halves, bringing together experienced and relatively inexperienced directors in order to generate a diaspora of Fishburners members with their first board experience. I’m immensely pleased to see Bilyana join our board, and not just help oversee and drive the progress of Fishburners, but also serve as an example for incoming board members to aspire to.” – Murray Hurps, CEO of Fishburners

Fishburners is proudly supported by Google, News Corp, Optus, Flight Centre, NAB, Dropbox, Amazon and BigAir.

Source: Fishburners media release

Neurala BRAIN RAISES $14m Series A

From https://www.design-reuse.com/news/41272/neurala-series-a-funding.html 

Based on work originally developed for NASA, ‘The Neurala Brain’ enables a new generation of smart products that learn, adapt and interact with their environment in real time.

BOSTON—January 18, 2017—Neurala, the software company that has invented The Neurala Brain, a deep learning neural networks platform that is making smart products like toys, cameras and self-driving cars more autonomous, interactive and useful, today announced the closing of a $14 million series A funding round, 

led by Pelion Venture Partners, with participation from Sherpa Capital, Motorola Solutions Venture Capital, 360 Capital Partners, Draper Associates Investments, SK Ventures, and Idinvest Partners through its Electranova Capital II Fund and in partnership with Ecomobility Ventures. 

Both 360 Capital Partners and Draper Associates also provided seed funding. 

Neurala will use the capital to accelerate servicing of its rapidly increasing customer demand, as well as to revolutionize additional application areas by adding built-in intelligence and autonomous behavior.

“The Neurala Brain was designed from the beginning to transform industries,” said Massimiliano “Max” Versace, co-founder and CEO of Neurala. “Bio-inspired brainpower can be built right into drones, cars, toys, cameras, and other devices found in the home so that they can learn, see and act. This is essential for applications like drones and self-driving cars, where reaction time is critical and where you can’t always get fast network access. It’s also an endearing capability when built into toys that recognize their young owners by sight and give them a smile without communicating with a server.”

Neurala pioneered the development of deep learning neural network software for NASA to use in planetary exploration, where processing power, battery life and communications are limited. Instead of designing deep learning neural networks for super computers, as other companies do, The Neurala Brain was designed to work where the decisions need to be made. Today, Neurala has customers deploying a broad range of applications, including autonomous drones and cars. Customers include Teal Drones, Parrot and multiple members of the Fortune Global 500. Neurala is currently working with Motorola Solutions on new applications of video, image and audio analytics for public safety.

Neurala’s neural network software uses a bio-inspired approach to mimic the way the human brain learns and analyzes its environment. This software enables a variety of smart products—from self-driving cars and industrial drones to toys, consumer electronics and smart cameras—to learn, adapt and interact in real time. With The Neurala Brain, toys can learn to identify their owners, security cameras can identify specific threats, drones can “learn” how to diagnose problems at the tops of cell towers, saving humans considerable danger and drudgery, and self-driving cars can be safer and learn to avoid obstacles.

One significant differentiator of Neurala’s deep learning software is that it scales from embedded hardware to powerful servers. Neurala calls this an “Anywhere Brain.” By operating “on the edge” and locally on the device, toys can entertain without communicating personal information to a third party, and applications like self-driving cars need not rely on the internet—which can be slow or unavailable—to avoid accidents.

Neurala’s software development kit (SDK) supports industry-standard NVIDIA, ARM and Intel processors, so teams can develop for the processor that is best for their product instead of being forced to select a high-priced proprietary processor.

“Motorola Solutions is constantly seeking ways to accelerate technology innovation for our public safety and commercial customers, who work in demanding and often dangerous environments ,” said Paul Steinberg, Chief Technology Officer, Motorola Solutions. “Neurala brings advanced deep learning capabilities that will enable us to further explore the potential of artificial intelligence to augment our customers’ experiences ‘at the edge. ’ This has the power to do things like help police find a missing person faster or guide a field worker’s maintenance activities by turning their body -worn camera into a sensor that can recognize actionable information in video and images—in real time at the edge .”

“Almost every application on earth can benefit from becoming smarter,” said Tim Draper, well-known venture capitalist and founder of Draper Associates. “Neurala is the only platform that enables products to see and react in their worlds, with fast, local, real-time learning. It’s already driving innovative new intelligent hardware applications even as it makes current ones more efficient, with greater financial feasibility.”

“Pelion is a firm that believes in a future in which automobiles, robots, drones and other mobile hardware devices will need to navigate the world autonomously and safely, and we believe that Neurala has the right solution to enable that future,” said Senior Associate Ben Lambert of Pelion Venture Partners. “Neurala’s executives have a deep technology background and have been leading development efforts in this industry since 2006. As a result, the company is far ahead of its competitors and is at the forefront of the deep learning and computer vision space.”

“Neurala technology is already achieving great traction in Europe. We will be able to help the company’s founders build upon that momentum to accelerate growth,” said Idinvest Director Julien Mialaret. “Our fund sponsors have ideas for ways to deploy Neurala’s exciting technology.”

About Neurala

Neurala, Inc. (http://www.neurala.com) is a software company that developed The Neurala Brain— deep learning neural network software that makes smart products like inspection cameras, robots, drones, toys, consumer electronics and self-driving cars more autonomous, engaging and useful. Neurala provides off-the-shelf and customized solutions spanning the world’s highest-end applications to inexpensive everyday consumer products. With the Neurala Brains for Bots Software Development Kit (SDK) and an ordinary camera, products can learn people and objects, recognize them in a video stream, locate them in the video and follow them as they move. The company has raised a total of $16 million in funding from Pelion Venture Partners, Sherpa Capital, Motorola Solutions Venture Capital, 360 Capital Partners, Draper Associates Investments, SK Ventures, TechStars and Idinvest Partners. The Neurala Brain technology is based on technology originally developed for NASA and the U.S. Air Force. Follow Neurala on Twitter at @Neurala, on Facebook at www.facebook.com/neurala, on YouTube at www.youtube.com/c/NeuralaTV or LinkedIn at https://www.linkedin.com/company/neurala.

About Pelion Venture Partners

Pelion Venture Partners is an early stage technology venture capital firm with a national track record of investing in software-based businesses that manage the exponential growth in the movement of information, or “bits,” across wired and wireless networks. Founded in 1986, Pelion has been a partner to leading technology innovators CloudFlare, Fusion-io, Integral Ad Science, Dino, RedHat, and Riverbed. For more information, visit www.pelionvp.com.

About Idinvest Partners, Electranova Capital II Fund and Ecomobility Ventures

Idinvest Partners, with assets under management of over €7 billion, is the largest venture capital investor in continental Europe and one of the most active investors in the European mid-market segment. Idinvest has supported over 160 high-tech companies to date and has specific expertise in information technologies (internet/media, software and telecommunications), new energy and environmental technologies, mobility and healthcare (biopharmaceuticals, diagnostics and medical instruments).

Electranova Capital II Fund works with entrepreneurs in new energy, smart city and mobility. The fund helps accelerate the growth of high-tech companies to reach markets worldwide. Electranova II was created in February 2016 through a partnership between Idinvest Partners, EDF Group and Allianz – the financial and insurance group. Electranova Capital II, which is independently managed by Idinvest Partners, leverages the business partnerships, technical collaboration and sales references provided by its corporate sponsors. Electranova invests in Europe, North America and Northeast Asia.

Ecomobility Ventures is an investment fund dedicated to sustainable mobility sponsored by SNCF, Total, Orange, Air Liquide and Michelin. Ecomobility Ventures is positioned as a long-term partner for pioneering young companies. Its objective is to support a dozen start-ups aspiring to become the leaders of tomorrow.

To know more, visit www.idinvest.com and www.em-v.com.

Austrade appoints new CEO

 

I am pleased to announce Stephanie Fahey as the next Chief Executive Officer of the Australian Trade and Investment Commission (Austrade).

Dr Fahey will be the first woman to lead Austrade. She brings a wealth of international trade and investment experience.

She is currently the Lead Partner for Education, Oceania at Ernst and Young. Prior to that was Deputy Vice Chancellor at Monash University in Melbourne.

Dr Fahey has also led a research institute at the University of Sydney and is currently Chair of the NSW International Advisory Board, a Council member of the European Australian Business Council, a Board member of Canberra Institute of Technology, and a Board member of The Asia Foundation (Global Board).

Dr Fahey has served on a number of other bodies including the Foreign Affairs Council, the Australia Korea Foundation, and a subcommittee of the Prime Minister’s Science, Engineering and Innovation Council.

She was inducted as a Fellow of the Australian Institute of Company Directors in 2012, and brings long-standing experience in business and government both as an academic and executive, domestically and internationally.

I take this opportunity to thank outgoing Austrade CEO Bruce Gosper for his considerable contribution.

Under Mr Gosper’s leadership Austrade has played an expanded role in advancing Australia’s trade, tourism, investment and international education interests.

Austrade has supported Australia’s exporters and helped SMEs make the most of the North Asia Free Trade Agreements.

It has developed a large program of minister-led business missions – including taking over 1,000 delegates to China earlier this year for the second Australia China Business Week – and worked to facilitate productive investment into Australia’s economy.

Mr Gosper will continue to serve Australia’s trade interests as High Commissioner to Singapore.

I welcome Dr Fahey to her new role which she is expected to take up in mid-February.

Written by

Steven CioboMinister for Trade, Tourism and Investment

12 KPIs you must know before pitching your startup

 - from techcrunch via LinkedIn 

Posted 18 hours ago by Phil Nadel

Phil NadelCRUNCH NETWORK CONTRIBUTOR

Phil Nadel is the co-founder and managing director of Barbara Corcoran Venture Partners.

More posts by this contributor:

• 11 reasons we didn’t invest in your company

How to join the network

It is critically important for the founders of a company to intimately understand the company’s key performance indicators (KPIs). Founders cannot hope to grow a company in any meaningful way without an almost obsessive focus on its KPIs.

Why? Because KPIs, if constructed correctly, give management and potential investors a cold, analytical snapshot of the state of the company, untainted by emotion or rhetoric. This focus must not be limited to the KPIs themselves, for they are merely measurements of outcomes. We look for founders to have an understanding of what levers can be pulled and what tweaks can be made to improve the business, which will then be reflected in its KPIs.

The focus should not be on the KPIs themselves, but the meaning behind them and knowing what impacts each one.

Let’s review some of the KPIs that are important for founders to thoroughly understand and for which they should have a strategy, or set of strategies, for optimizing. Please note that some KPIs are not relevant to some types of businesses. Finally, I am not going to go into very much detail on each metric and how to calculate it as (a) that is beyond the scope of this article, and (b) that information is readily available from other sources.

Customer acquisition cost (CAC). CAC is the amount of money you need to spend on sales, marketing and related expenses, on average, to acquire a new customer. This tells us about the efficiency of your marketing efforts, although it’s much more meaningful when combined with some of the other metrics below, and when compared to competitors’ CAC.

Acquiring new customers is one thing, but retaining them is even more important. Your customer retention rate indicates the percentage of paying customers who remain paying customers during a given period of time. The converse to retention rate is churn (or attrition), the percentage of customers you lose in a given period of time. When we see high retention rates over an indicative time period, we know the company has a sticky product and that it is keeping its customers happy. This is also an indicator of capital efficiency.

Lifetime value (LTV) is the measurement of the net value of an average customer to your business over the estimated life of the relationship with your company. Understanding this number, especially in its relation to CAC, is critical to building a sustainable company.

We consider the ratio of CAC to LTV to be the golden metric. This is a true indicator of the sustainability of a company. If a company can predictably and repeatedly turn x into 10x (note: 10x is just an illustration and not meant to imply any sort of minimum or standard), then it’s sustainable.

The most successful founders tend to be those who have an obsessive focus on their KPIs and the drive to constantly experiment and optimize them.

CAC recovery time (or months to recover CAC). This KPI measures how long it takes for a customer to generate enough net revenue to cover the CAC. CAC recovery time has a direct impact on cash flow and, consequentially, runway.

Whereas CAC measures the variable expenses attributable to acquiring customers, overhead measures the company’s fixed expenses incurred irrespective of the number of customers acquired. Overhead relative to revenue is a reflection of the capital efficiency of a company (i.e. all things being equal, a company that generates $1 million in revenue on $200,000 in overhead is twice as efficient as one that generates $1 million in revenue on $400,000 in overhead).

Understanding your revenue and monthly expenses (fixed and variable) enables you to calculate the company’s monthly burn. This is simply the net amount of cash flow for a month when net cash flow is negative. If the company starts the month with $100,000 in cash and ends the month with $90,000 in cash, its burn rate is $10,000. If a company’s monthly net cash flow is positive, it is not burning cash.

A keen focus on runway is critical to the survival of any startup. Runway is the measure of the amount of time until the company runs out of cash, expressed in terms of months. Runway is computed by dividing remaining cash by monthly burn. We prefer to view a conservative estimate of runway that calculates the monthly burn utilizing current revenue and projected expenses (after accounting for the increased expenses to be incurred post-investment). We require an absolute minimum of 12 months of runway, but have a strong preference for 18 months or more. Short runways cause entrepreneurs to by myopic and not to have the liberty to tweak and iterate when necessary. It also forces them to almost immediately focus on the next fundraising round instead of growing the company.

Expressed as a percentage, profit margintells us how much your product sells for above the actual cost of the product itself. Put another way, it reveals how much of the selling price is “mark-up.” This invaluable metric allows us to consider the return on investment on the cost of the product and is significant in understanding the scalability and sustainability of the company.

We consider conversion rate to be a very telling KPI in that it reveals a combination of the company’s ability to sell its products to its customers and customers’ desire for the product. It is particularly instructive to track and review conversion rate over time and regularly run experiments to improve it.

Certain businesses find that revenue may not be the most informative indicator of their financial performance. This is especially true for marketplaces for which revenue (i.e. their take rate) represents a small portion of overall transactions. Gross merchandise volume (GMV) can be a useful KPI in these cases. GMV is the overall dollar value of sales of goods or services purchased through a marketplace.

For companies that have apps, online games or social networking sites, monthly active users (MAU) is an important KPI. MAU is the number of unique users who engage with the site or app in a 30-day period. Understanding MAU is helpful in determining the revenue potential of a company or how well it is currently monetizing.

When we speak to founders to learn more about their companies, we ask them for these KPIs, along with their narrative and other information. It is a quick way for us to understand the current state of the business and we have serious concerns about founders who do not know their KPIs.  We find that the most successful founders tend to be those who have an obsessive focus on their KPIs and the drive to constantly experiment and optimize them.

FEATURED IMAGE: OLIVER BURSTON/GETTY IMAGES

6 reasons why you should not raise money in first round from VC

Great article by my linked in colleague Sanjay Mehta

 

Less money raised at seed stage, leads to more success. 

Being an angel investor for me start-up means a business which requires external funding for an accelerated business growth till it reaches to profitability. Raising funds from investors is an uphill battle for entrepreneurs. Entrepreneurs typically pitch to angel investors for their first cheques. We now are witnessing VCs entering in seed stage funding scene. The lines between VCs & Angels for the first round funding is getting blurred. To get funding in the first round itself from a VC firm sounds exciting & glamorous. Getting a VC firm as a partner involved early, who is fully committed & also get more money early is a great story to go after. But there are a number of serious drawbacks that have profound implications if VC firm comes up on the start-up cap table very early. Let me try to help explain why it is not a good idea to raise money from a VC at seed stage.

The fact is that the valuations & the amount of capital start-ups raise in their first round from Venture Capital firm is inversely correlated with start-up success. 

Below mention points are in order of importance why first cheques should not be taken from VC firm.

1.   For start-up if the VC firm decides not to write the second cheque Series A then it's sure shot curtains for that business as NO other VC firm in the town is going to write that second cheque Series A. If the seed round first cheque was from angel investor group, then it's not expected for angels to write the second cheque Series A. Entrepreneurs is then free to pitch to multiple VC firms for the next round of Series A raise. The entrepreneur is not locked & nor at the mercy of the VC firm if they raise the first cheque seed stage funding from angel investor group.

2.   VC firms write $250K - $500K first cheques or even up to $1Million depending on their size of the fund. Once seed investment is done VC firm will put in lower rung junior team to manage this early stage portfolio. General Partners of that VC firm do not invest their precious time with the early stage start-up hence the business outcomes success becomes the sole responsibility of the founders. These portfolio companies are given step motherly treatment with no real attention, nurturing from GPs. In comparison angel investor group, will have a lead investor who would have enough & more expertise, face time and mentoring to the founding team so that the business is successful. 

3.   Angel investor are proud of their seed stage first cheque investments and parade the entrepreneurs proudly in media, customer, investors & otherwise whereas for VC firms their pride is with their second cheque Series A & third cheque Series B invested firms & not the first cheque seed stage companies. Seed stage first cheque funded companies will never be a priority for a VC firm. Emotionally it's a big drain for the entrepreneur when the VC firm is not proud nor excited about the future of its own invested company.

4.   Failure, losing money is accepted norm for the VC firm with the seed stage first cheque invested companies. They expect very high mortality rates at early stage. Investment thesis of the VC firm is to find that one out of the dozen early stage portfolio wherein they can write the second cheque of Series A. In comparison being part of the angel investor portfolio works for the entrepreneur as these investor put in their own money & they hate to lose money so they will work hard with entrepreneur to ensure the company thrives and gets the next round of funding. Many angel investors are entrepreneurs themselves hence like shepherds they can help building initial team, helping with product pricing and marketing. 

5.   VC firm funding round requirements be it in equity dilution terms or share holder agreements is very different than angel groups. VC firm writing the first cheque would like to go solo investments. They provide no scope for another VC firm to join the first cheque round. First cheque is the only opportunity for entrepreneurs to bring in marquee names or valuable experts on the cap table. Angel group can bring lot of variety & breadth of industry connections required for the start-up. It’s a lot more fun dealing with angel investor groups variety of collective intelligence than pandering to VC firm needs. 

6.   When there is large sum of capital invested early with the first cheque, it creates a pressure cooker type situation for entrepreneur and forces them to throw money to problems. VC capital always comes with non negotiable deadline to deliver. In comparison, the angel investor rounds are more measured, it's optimum use of capital and focused approach to experimentation and more flexibly to adapt the learning as it's not a stoned deadline.

In the VC game the very few winners pay for the losers, so most VCs are playing a high-stakes all-or-nothing game.

Jumping the natural funding sequence by getting VC firm to write the first cheque instead of angel investor group may seem like a good idea if you hit the bulls eye by being first time right. In reality with first cheque seed stage funding from angel investor can help build real value for the start-up, get a higher valuation before raising large sums of capital and diluting the equity. Entrepreneurs don't skip the line!

Follow me on twitter @mehtasanjay