Categories
Blog

Founder Highlight: Ade Adesanya

Ade Adesanya. A name that now ripples through the tech community. Co-Founder of Moving Analytics. Born and raised in Lagos, Nigeria. Adesanya came to America for college to study electrical engineering at the University of Houston. He then earned a master’s degree in engineering management and a diploma in finance from the University of Southern California. and quickly become enamored with Silicon Valley. Before launching Moving Analytics, Ade assisted researchers at the University of Southern California to commercialize their research into startup ventures.

Now his own venture, Moving Analytics is a virtual cardio rehab app that tracks the progress and recovery rates of victims of cardiac-based episodes. Speaking to Forbes Adesanya says, “Nigeria, where I am from and the rest of the world does zero cardiac rehabs”. This app is easy to access for recovering victims everywhere. In a study done by the CDC, heart disease is the number one leading cause of death for women, men, and people of color in the United States. This can be traced to poor dietary practices, exercise, and genetic predisposition. Most of the listed reasons can be solved with Moving Analytics.

Not only is this app a literally life-saver, but a financial one too. Ade found though that 30-40% of medical costs may be avoided if healthcare providers could persuade individuals to live better lifestyles. It would also reduce the 40-50 percent of persons who have another heart attack within a year of the first. Adesanya has now been listed by Forbes as a top 30 under 30 in healthcare by Forbes magazine. Adesanya has also been in UTC’s “Powerhuddles Lunch and Lesson”. More recently Adesanya has been listed in Pitchboook’s “Black Founders and Investors to Watch” list.

Categories
Blog

How Seed Funding Has Exploded In The Past 10 Years

How Seed Funding Has Exploded In The Past 10 Years

Editor’s note: This is the first in a multipart series looking at seed funding trends. Seed-stage funding to startups has exploded in the past decade and become an asset class of its own. If that wasn’t obvious already, consider that in just the past few months, three of Silicon Valley’s largest and best-known venture firms—Andreessen Horowitz, Greylock and Khosla Ventures—all announced large new dedicated seed funds.

Subscribe to the Crunchbase Daily
To visualize this dramatic change in the venture ecosystem and understand how much seed investment grew in the past 10 years, we decided to look at the number of U.S. startups that were funded over various five-year time frames and at different stages. Crunchbase data underscores an impressive rise in funding to the smallest startups: Fewer than 3,200 companies received seed funding in the period between 2006 and 2010. A decade later, that had ballooned to more than 23,000 startups.

A Brief History of Seed Funding
One of the biggest catalysts for new startup creation was the launch of Amazon Web Services and cloud computing in the early 2000s—new technologies that drastically reduced the cost and complexity of starting a new tech company. That, in turn, transformed seed funding into its own institutional asset class in the period between 2006 and 2010. Still, startups that raised Series A funding continued to outpace startups raising seed until around 2009—when seed funding took the lead and began to explode, Crunchbase data shows. Seed funding surged again in the period between 2011 and 2015, with 5x the number of companies funded at seed compared to the prior five years. By contrast, Series A-funded companies grew at a much slower pace, showing 42 percent growth. By the 2016-2020 timeframe, there were 23,000 seed-funded companies in the U.S.—up another 30 percent compared to the prior five years. That put seed growth in line with the growth in Series A, where funded startups numbered over 6,800 during that five-year period—up 31 percent over the same period. Rise of the VC Seed Investor In the mid-2000s, venture firms accustomed to investing $3 million to $5 million at Series A and $8 million to $12 million at Series B weren’t all that interested in joining what looked like institutional angel rounds. The Crunchbase numbers bear this out. From 2006 to 2010, multistage venture firms had seed investments in the single digits in total over five years. But these VCs didn’t cede the seed stage for long. From 2011 to 2015, a number of leading multistage venture firms started to grow their seed practices, the most active of which were Andreessen Horowitz, New Enterprise Associates and Greylock. As companies raised multiple seed fundings as well as larger seed rounds in the $1 million to $3 million range, larger venture firms seeking to be the first institutional investors became more invested at seed.

The Firms Investing in Seed Now
The most active multistage venture firms in seed investing more recently are Greycroft, Founders Fund and Khosla Ventures. Khosla has raised multiple seed funds over time and was a seed investor in Instacart, DoorDash, QuantumScape and GitLab. Just this week, the firm announced the close of a new $400 million seed fund. That follows a $400 million seed fund the firm raised in 2014 and a $300 million seed fund in 2010. Greylock, meanwhile, last month announced what the firm says is the largest pool of venture capital dedicated to seed investing: A new $500 million fund. One of the reasons many venture firms are stockpiling funds to invest into seed startups is that getting in at the earliest stages with a young startup lets those investors have a say in crucial decisions early on. “The ‘decision tree’ of a company has the most range at the beginning, and we want to be there as a partner to founders from the foundation,” Greylock, which has made seed investments in Wag, Instabase and Snorkel AI, said in its fund announcement. Andreessen Horowitz announced a $400 million seed fund in August. The firm has made seed investments in Robinhood, Stripe and Lime over the years. “While having a seed fund is not a shift in strategy—seed has long been a core focus—it underscores our commitment to seed investing as a first class motion for the firm,” Andreessen Horowitz said at the time.

Size of Seed Grows
We also looked at the median and average deal sizes for seed rounds for these 14 multistage funds over the decade, and found the median seed deal has grown from $1.5 million to $4 million, and the average from $1.7 million to $4.6 million. While the size of the typical round has ballooned, there’s still a great deal of variance, however. In 2020, seed fundings from these investors ranged from $700,000 to $22 million. The seed rounds of recent years are sizing up to look more like Series A fundings. “The imbalance between supply and demand has pushed round sizes and valuations to a point where investors are no longer rewarded for the risk they take, and seed rounds are now done at Series A prices and sizes from three years ago,” Jeff Clavier of Uncork Capital told me via email. “The problem,” he added, “is that everyone is pricing deals as if they are a 10s of billions of dollars exit opportunity. The vast majority aren’t.”

Categories
Blog Startups

Tech Companies, let’s grow!

2020 saw new challenges that many of us have never faced before. Part of these new challenges offered new solutions that required innovation and outside-the-box thinking. At the forefront of this is the tech industry.

Thanks to a report done by Crunchbase. A record $137 Billion was invested into startups in the first half of 2021 alone. Sadly amongst that number, only 1.2% went into startups led by black entrepreneurs. This report was put together by Crunchbase over 1,393 contributors. The contributors are made up of Crunchbase Venture Program Partners, tech-journalists, Crunchbase’s data management team, and venture capitalists themselves. The Crunchbase researchers also added that Black entrepreneurs in the U.S raised nearly $1.8 Billion in the first half of 2021.

Within the decade tech companies have been scouting the city of Atlanta for its brightest and best. Atlanta has seen numerous startups within the last few years. Georgia also takes the cake with the highest record of funding with 8.4% of the venture funding going to founders of color. Georgia has become a hotspot for the industry with Silicon Valley and other high-profile companies now recruiting out of Atlanta.

Crunchbase’s senior data journalist provided ZDNET with some insight on this report,

“There is an increased interest and awareness around issues of racial justice in the venture world. Some positive signs are that more Black-led firms and funds have invested in Black and other underrepresented startup founders, more Black investors at traditional firms are being promoted to partner level, and a greater percentage of VC funding to Black startup founders is going into early-stage rounds, several of which have been quite large.”

Despite these disadvantages, Black startups have still been providing crazy numbers in funding. 1.2% is an increase from last year as black startups in 2020 raised approximately $1 Billion. The field for diverse and black-run tech companies is growing with expediency. The next step is getting these companies the materials to help support them.

Categories
Blog

2020 Lunch & Learn Program Dates to be Announced in the coming weeks

Categories
Blog

Founders Workshop – Scaling product growth with a strategic partner (webinar)

Categories
Blog

Plug In Lunch and Learn Series – Invite Only

Categories
Blog

Plug In South LA’s 2017 Founders’ Roundtable: A Roadmap to Success

Arlan Hamilton joins the Plug In South LA community to dive into the ins-and outs of Entrepreneurship.

Plug In South LA’s Founders Roundtable Summit: A Roadmap to Success
Being an entrepreneur, the startup process is often a personal journey, but there are typical milestones and challenges most people experience along the way.

This summit will gather Founders, Tech, VC and Digital Media Executives from around LA’s tech ecosystem to give actionable ideas on how to hit key milestones and goal posts, and how to bounce back when you sometimes fall short.

We’ll dive into issues such as how to go from Seed to Series A; trigger points to structure financing; fine tuning your product to maximize user experience and how to grow your partnerships to scale, and much more.Stay tuned for more program updates. Sign up now!

Categories
Blog

Founders Lunch and Learn with Plug In Mentors and Advisors

Invite only. Please get in touch with becky@pluginsouthla.com for more details or to submit your company profile.