Year: 2021

Last year was a record 12 months for venture-backed biotech and pharma companies, with deal activity rising to $28.5 billion from $17.8 billion in 2019. As vaccines roll out, drug development pipelines return to normal, and next-generation therapies continue to hold investor interest, 2021 is on pace to be another blockbuster year.

The median step up in valuations from seed to Series A is now 2x, higher than in all later rounds. As a result, biotech startups will continue to attract more investment at earlier stages from a larger, more diverse pool of venture capitalists.

This may also change the nature of biotech founders themselves: As a blog post from Y Combinator suggests, these founders are trending younger and perhaps less willing to cede control to VCs and hired executives than they might have in years past (i.e., via the “venture creation” model so predominant among early-stage biotech companies).

As longtime members of the biotech startup community — as executives, entrepreneurs, advisors and legal counsel — we’ve seen our fair share of founder missteps early in the fundraising journey result in severe consequences.

In this exciting moment, when younger founders will likely receive more attention, capital and control than ever, it’s crucial to avoid certain pitfalls.

Clarity trumps creativity

Founders are some of the most creative people out there, but legal documentation should be anything but. Keep it as simple and clear as possible. That means using National Venture Capital Corporation documents that everyone knows and understands, as well as keeping organized documentation for employee intellectual property (IP) assignment and NDAs, option grants, independent contractor agreements, tax documents and other key contracts and paperwork.

Ever since I read this Bloomberg story about how songs are engineered to go viral on TikTok, I’ve had one thought in my head – if you can call it that – it’s more of a noise, or impression: 

AHHHHHHHHHHHHHHH

Yes, it’s the sound of internally screaming. Just when I thought I understood how deeply social media algorithms have hijacked our desires, tastes and preferences – WHAM! Another jab straight to the nose. I have to admit, I was blindsided by this one. It knocked me out.

Now, I understand that I work for a website called TechCrunch, emphasis on the tech, but if this story doesn’t make you feel at least a teensy bit like a Luddite, well, I don’t know what to tell you. You’re probably like that character in the Matrix, Cypher, who wants to be plugged in.

Is that harsh? I mean, companies are going to company, and partnerships with major record labels is a common sense move for a social media app all about honing the art of short, clever combinations of sound and video. And fair dues to the creators, many of them in college or high school, for jumping at the chance to make some money and get a little bit of fame.

But it’s probably not too harsh when you consider what else is possible when catchiness is weaponized. Here’s what we know: whether it’s internet memes or political slogans or Megan Thee Stallion’s Savage, what drives information dissemination is not the truthfulness of the content or the credibility of the speaker but 1) how easy it is to remember and 2) how quickly it sparks conversations. 

And would you look at that! Those are exactly the variables music producers optimize for today. What the Bloomberg story highlights, inadvertently or not, is how a #1 pop hit and a piece of political disinformation are not all that different, aesthetically. Everyone’s an entertainer.

Now read to the end of the Bloomberg story. Get to the part where it’s revealed that ByteDance (the Chinese company that owns TikTok), in response to threats of a U.S. ban on the app, recruited creators to orchestrate a seemingly grassroots lawsuit against the proposed ban. And I think: damn. Attention really is the most precious commodity in the world. And we’re just…giving it away.

(Cue the internal screams.)

Cryptocurrency prices continued to tumble Friday with Bitcoin leading the charge, with prices for the internet currency dipping below $50,000 for the first time since early March.

Bitcoin is down roughly 20% week-over-week, around 30% from its all-time-high of nearly $65,000 early last week. The market cap of the coin has dipped below $1 trillion. The tumble has been less severe for Ethereum which hit an all-time-high just yesterday but has since dropped 13% as the broader market has crawled back.

Plenty of altcoins have also taken a beating. Dogecoin erased the breakneck gains of the week and then some, nearly halving its price after a meteoric climb last weekend. XRP is down 35% week-over-week, Stellar is down 30% and Polkadot is down 25% since last week.

Overall, Coinmarketcap estimates the global crypto market has shrunk around 10% in the past 24 hours.

Crypto prices have been on a tear for the past several months, but the past week has been the clearest sign of a correction to climbing prices, though many see news of President Biden’s adjustment to the hikes on the capital gains tax as the most apparent reason for the market’s slide as investors cash out hoping their gains won’t be reached by a retroactive application of the rules.

Coinbase, which went public last week via direct listing, shaved about 10% off its share price this week, but was largely unaffected Friday in intraday trading.

A biotech company, that has spent 11 years researching supplements to increase human longevity, plans to launch its supplements later this year. Longevica says it has attracted a total of $13 million from investors including, Alexander Chikunov, a longevity investor, who is also president of the company.

Longevica says it created a biotechnology platform for longevity after researching the life-span of laboratory mice. It now aims to produce medicines, dietary supplements, and food products.

The longevity space is a growing sector for tech startups. Google backed the launch of Calico in the space. Late last year Humanity Inc. raised $2.5 million in a round led by Boston fund One Way Ventures for its longevity company that will leverage AI to maximize people’s healthspan.

Longevica’s CEO Aynar Abdrakhmanov, backing up his company’s aim to tap the desire for people to live longer, said: “According to the WHO, by 2050, 2 billion people will be 60+ years old. By 2026, the sales of services and products for this audience will be around $27 trillion… By comparison, it was only $17 trillion in 2019.”

According to CB Insights, life-extension startups raised a record total of $800 million in 2018 alone. And there are some high-profile investors in the space.

PayPal co-founder Peter Thiel invested in Unity Biotechnology, which is developing drugs to treat diseases that accompany aging, has also raised significant funding.
 And Ethereum founder Vitalik Buterin invested $2.4 million worth of Ether into the nonprofit SENS Research foundation, where famed longevity research Aubrey de Grey is chief science officer, to develop rejuvenation biotechnologies.

Longevica is basing its platform on the work of scientist Alexey Ryazanov, who holds 10 US patents in the space, and a long-time researcher into the regulation of protein biosynthesis cells.

Chikunov said: “I gathered scientists known in this field to discuss their approaches to the problem. Then Alexey Ryazanov proposed the innovative idea of large-scale screening of all known pharmacological substances on long-lived mice in order to find those that prolong life.”

Under the leadership of Ryazanov, Longevica says it used 20,000 long-lived female mice and 1,033 drugs representing compounds from 62 pharmacological classes, to find five substances that statistically significantly increased longevity by 16-22%: Inulin, Pentetic Acid, Clofibrate, Proscillaridin A, D-Valine.

From this work, they formed a view about the elimination of certain heavy metals from the body and improve the body’s ability to remove toxins.

Raising capital for a new fund is always hard. But should you give preferential economics or other benefits to a seed anchor investor who makes a material commitment to the fund?

These “VCs for investment management companies” are also known as GP stake investors or fund platforms. According to DocSend, “About half the VC firms in our survey had an anchor LP for their fund, and the average percentage that an anchor LP took in a first-time fund was 25%. The prevalence of anchor LPs among both early-stage and more established firms in our data suggests that securing an anchor investor can be crucial for signaling a firm’s credibility to other potential LPs.”

However, data about whether those anchors received preferential terms are very hard to obtain.

“In the hedge fund world, fund platforms are common and therefore more transparent,” Ha Duong, the investment principal at Ocean Investment, a single-family office based in Berlin, told me. “In venture, I haven’t seen many fund platforms.”

A number of firms provide infrastructure for emerging VCs, including Capria, Draper Venture Network, Oper8r and Recast Capital, and may provide capital or assistance in raising capital.

However, this ecosystem is much more built out in the private equity and hedge fund spaces. Examples include Archean Capital Partners, Gatewood Capital Partners, Lafayette Square, Nesvold Capital Partners and Reservoir Capital Group. Certain family offices also make these investments on an ad-hoc basis. As do some VCs: LuneX.com notes it is a dedicated blockchain and cryptocurrency fund that partners with a Southeast Asia-based VC, Golden Gate Ventures.

A GP stake investor brings some significant advantages:

• Meaningful upfront initial capital, usually greatly shortening the lengthy fundraising process. This can be particularly helpful for founders who do not come from a wealthy background and may not be able to forgo an income for an 18-month fundraising period.
• Credibility. This is proportionate to the stake investor’s credibility. Everyone else will assume the GP stake investor did extensive due diligence.
• Assistance in business development, marketing, risk management and governance.
• Ability to access LPs who require meaningful assets under management (AUM) before they’ll consider you.
• Back office, in some cases.

There can also be meaningful disadvantages to working with a GP stake investor:

India’s central bank has restricted American Express and Diners Club from adding new customers starting next month, it said Friday citing violation of local data-storage rules.

In a statement, the Reserve Bank of India said existing customers of either of the two card companies will not be impacted by the new order, which goes into effect May 1.

This is the first time India’s central bank has penalized any firm for non-compliance with local data storage rules, which was unveiled in 2018. The rules require payments firms to store all Indian transaction data within servers in the country.

Visa, Mastercard, and several other firms, as well as the U.S. government, have previously requested New Delhi to reconsider its rules, which is designed to allow the regulator “unfettered supervisory access.”

Visa, Mastercard, and American Express had also lobbied to either significantly change the rules or completely discard it. But after none of those efforts worked, most firms began to comply.

In a statement Friday evening (local time), an Amex spokesperson said the company was “disappointed that the RBI has this course of action,” but said was working with the authority to resolve the concerns “as quickly as possible.”

With about 1.5 million customers, American Express has amassed the highest number of customers among foreign banks in India.

“We have been in regular dialogue with the Reserve Bank of India about data localization requirements and have demonstrated our progress towards complying with the regulation. […] This does not impact the services that we offer to our existing customers in India, and our customers can continue to use and accept our cards as normal.”

Diners Club, which is owned by Discover Financial Services and offers credit cards in India through a partnership with the nation’s largest private sector bank (HDFC), said in a statement that India remains an important market for the firm and it is working with the central bank to reach a resolution so that it can “continue to grow in the country.”

Last year, India’s central bank ordered HDFC Bank to not add new credit customers or launch digital businesses after the bank’s services were hit by a power outage.

Friday’s order comes as Citigroup, another key foreign bank in India, has announced plans to exit most of its Asian consumer business as it looks to boost its profitability. The consumer operations of the bank in 13 countries is up for sale.

Don’t let procrastination slow your roll. Yeah, we’re looking at you, early-stage founders. At TechCrunch, we love to reward action with savings. Want to save a cool $100? Buy your Early Stage 2021: Marketing and Fundraising pass before April 30, at 11:59 p.m. (PT), and you’ll keep a cool $100 in your pocket.

Take action, reap savings and get ready to join your community of early-inning startup founders for a two-day bootcamp (July 8-9) dedicated to helping you build a firm foundation for entrepreneurial success. We’re talking a day packed with highly interactive presentations, breakout sessions and plenty of time for Q&As with top-tier industry leaders and experts — plus a thrilling day-long pitch competition.

Part one of TC Early Stage 2021, which took place in April, featured folks like entrepreneur and VC Melissa Bradley, who delivered advice on nailing a virtual pitch meeting; Alexa von Tobel lead a discussion on finance for founders; and Fuel Capital’s Leah Solivan revealed 10 things not to do when you start a company.

Here’s just one example of the quality topics and guidance you can expect at TC Early Stage 2021 in July.

Plenty of founders struggle to find, or even define, product-market fit. And let’s face it, without the proper product-market fit, you basically have two chances of raising a unicorn: slim and fat. That’s why you won’t want to miss out on what Superhuman founder, CEO and product-market fit master, Rahul Vohra has to say on the subject. Bring your questions and take advantage of his invaluable advice.

Pro Tip: We’re building our July agenda and announcing new speakers every week (like Mike Duboe and Sarah Kunst) — stay tuned!

Wondering whether attending TC Early Stage 2021: Marketing and Fundraising is worth your time and money? Here’s what two founders shared about their experience at last year’s event.

Early Stage 2020 provided a rich, bootcamp experience with premier founders, VCs and startup community experts. If you’re beginning to build a startup, it’s an efficient way to advance your knowledge across key startup topics. — Katia Paramonova, founder and CEO of Centrly.

Sequoia Capital’s session, Start with Your Customer, looked at the benefits of storytelling and creating customer personas. I took the idea to my team and we identified seven different user types for our product, and we’ve implemented storytelling to help onboard new customers. That one session alone has transformed my business. — Chloe Leaaetoa, founder, Socicraft.

TC Early Stage 2021: Marketing and Fundraising takes place on July 8-9, and you have just one week left to save $100 on the price of admission. Kick procrastination to the curb and keep more money in your wallet. Buy your TC Early Stage 2021 pass before April 30, at 11:59 p.m. (PT).

Is your company interested in sponsoring or exhibiting at Early Stage 2021 – Marketing & Fundraising? Contact our sponsorship sales team by filling out this form.

The best venture capitalists take moonshot risks based on due diligence, support portfolio companies through ups and downs and find focus through noise.

When you look at the job description of the best founder, you’ll find nearly the exact same list of characteristics (except, of course, instead of a portfolio, the founder is supporting a team of employees). The shared ethos is almost uncanny — and includes a slew of strategic synergies both sides of the table can exploit.

That’s why we’re excited to announce that Lisa Wu, a partner at Norwest, is joining us at TechCrunch Early Stage in July to talk tactics, and how founders can think like a VC in all facets of their business.

Wu focuses on seed to late-stage companies with a specific interest in consumer internet, digital commerce and next-generation marketplaces. Her portfolio includes Calm, Ritual, Plaid and the recently public Opendoor.

With the inside scoop on these iconic companies, Wu will use her experience to illustrate how the best founders can leverage the language of venture capital in the pitch and beyond. The goal is to give the audience a list of actionable insights to implement immediately — and lean heavily on anecdotes found in Wu’s impressive work in the industry.

Tickets for TC Early Stage: Marketing & Fundraising are available at the early-bird rate, which gives you an instant $100 savings if you book before next week!

While there’s been plenty of attention and money lavished on virtual event platforms over the past year, Introvoke co-founder and CEO Oana Manolache predicted that we’re only at the beginning of a “third wave of digital transformation.”

In her framing, the first wave came at the beginning of the pandemic, when everyone was using video conferencing tools like Zoom for their virtual events. Next came conference platforms like Hopin (which has been raising money at a mind-boggling clip). But Manolache argued that even Hopin represents a “Band-Aid” that customers are hoping will tide them over until in-person events can resume — particularly organizers have to point attendees to a third-party platform.

“One size does not fit all,” she said. “The Band-Aid solution that was only supposed to last for a couple months has had big benefits as companies grew their customer base and revenue targets. Now we’ve reached the third wave, as organizations want to bring solutions to their own universe and own their relationship with the audience.”

San Francisco-based Introvoke is a Techstars Accelerator graduate aiming to provide this third-wave solution. It’s announcing today that it has raised $2.7 million in funding led by Struck Capital, while Comcast, Social Leverage, Great Oaks, V1vc, Time CTO Bharat Krish and Resy co-founder Mike Montero also participated.

The startup offers components like virtual stages, chat rooms and networking hubs, all customizable and embeddable on a customer’s website. Manolache said Introvoke (the name comes from the idea of “thought-provoking introductions”) is designed for a hybrid future, which will take multiple forms: “Hybrid is going to mean virtual-only events, in-person only events and events that have in-person and virtual elements.”

Image Credits: Introvoke

Introvoke charges customers based on on live event minutes, a model that it says is accessible to companies large and small. Its components can be embedded on websites built with WordPress, Squarespace, Wix, Splash and other platforms, but also on a customer’s internal intranet.

“We’ve been so impressed by the way customers are using the technology  — conferences, career fairs, employee engagements,” Manolache said.

She added that as customers like Comcast, Wharton and Ritual Motion have used the platform in private preview mode, they’re beginning to break free of the in-person model. For example, Introvoke events can allow for attendees to chat with each other over weeks or months, not just a few days.

In a statement, Struck Capital founder and Managing Partner Adam B. Struck suggested that virtual events “will continue far beyond the COVID-19 pandemic.”

“Right now, virtual experiences, from conferences and concerts to company all-hands, are generally hosted on third party platforms, which creates a disjointed experience for the brand or organization hosting the event,” he continued. “Virtual enablement should be native to the website and platform of the enterprise itself, and it’s the role of technologists like the Introvoke team to make these experiences as seamless as any in-person event.”

After spending much of his career in mission-critical environments, including the Israeli Air Force, Israeli Intelligence and leading development of a cybersecurity product at Microsoft, Amit Rosenzweig turned his attention to autonomous vehicles.

It was a technology that he soon recognized would need what every other mission-critical system requires: humans. 

“I understood that there are so many edge cases that will not be solved purely by AI and machine learning, and there must be some kind of human-in-the-loop intervention,” Rosenzweig said in a recent interview. “You don’t have any mission-critical system on the planet — not nuclear power plants, not airplanes — without human supervision. A human must be in the loop or present in some way for autonomous mobility to exist, even in 10 or probably 20 years from now.”

That “human in the loop” conclusion led Rosenzweig to found teleoperations startup Ottopia in 2018. (His brother, Oren Rosenzweig is also in the autonomous vehicle business via the lidar company he co-founded, Innoviz.) Ottopia’s first product is a universal teleoperation platform that allows a human operator to monitor and control any type of vehicle from thousands of miles away. Ottopia’s software is combined with off-the-shelf hardware components like monitors and cameras to create a teleoperations center. The company’s software also includes assistive features, which provide “path” instructions to the AV without having to remotely control the vehicle.

Since launching, the small 25-person company has racked up investors and partners such as BMW, fixed-route AV startup May Mobility and Bestmile. Ottopia said Friday that it has raised $9 million from Hyundai Motor Group as well as Maven and IN Venture, the Israel-focused venture capital arm of Sumitomo Corporation. Existing investors MizMaa and Israeli firm NextGear also participated.

Hyundai and IN Venture also gained board seats. Woongjun Jang, who heads up Hyundai’s autonomous driving center, and IN Venture managing partner Eyal Rosner, are now on Ottopia’s board.

Ottopia has raised a total of $12 million to date, and Rosenzweig has already set his sights on a larger round to help fund the company’s growth.

For now, Rosenzweig is focused on doubling his workforce to 50 people by the end of the year and opening an office in the United States. Rosenzweig said the company is also expanding into other applications of its teleoperations software, including defense, mining and logistics. However, most of Ottopia’s resources will continue to be dedicated to automotive, and specifically the deployment of autonomous cars, trucks and shuttles.

“The motivation is really simple — it’s simple but it’s hard to do — and that’s to make affordable autonomous transportation closer to reality,” Rosenzweig said. “The problem of course is that when an AV does not have any kind of backup or any kind of safety net in the form of teleoperations and it gets stuck, passengers are going to get anxious, ‘what’s going on, why, why is this not moving’.”

The other problem, Rosenzweig noted, is that AVs need to be combined with an efficient transit service. That’s where he sees his newest partner, on-demand shuttle and transit software company Via, coming in.

Under the partnership, which was also announced this week, Via will offer autonomous vehicle fleets that combine its fleet management software with Ottopia’s teleoperations platform. Via is not developing its own self-driving software system. In November 2020, Via announced it had partnered with May Mobility to launch an autonomous vehicle platform that integrates on-demand shared rides, public transportation and transit options for passengers with accessibility needs.