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Fundraising 101: How to trigger FOMO among VCs

Our media columnist Eric Peckham talked to a variety of successful founders on how they generate FOMO (i.e. fear of missing out) among VCs during their fundraises. While having a great deck and story is key to startup success, clearly there is also a bit of the dark arts required to go from intro email to term sheet.

We focused on a two-week period and set all the meetings for Thursday and Friday. From 7am into the evening, back-to-back pitches at all the firms in one area then the next area. That’s because partner meetings are on Mondays, so the Thursday and Friday conversations would lead to pitching the whole partnership the following Monday. We had a 24-hour rule: if we didn’t hear back from a fund in 24 hours, we crossed them off the list.

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According to this CEO, Sequoia and Benchmark are the best at throwing entrepreneurs off their process in order to get ahead of the competition. Sequoia will typically arrange meetings for the morning so they can invite you back for a second meeting with more partners that same afternoon; Benchmark’s partners are quick to travel to wherever you are in the world and sell you on working together (with a term sheet at the ready).

Q&A with J Crowley, Head of Product at Airbnb Lux, on what makes a great PM

Our editor Jordan Crook did a great interview with J Crowley of Airbnb Lux and formerly of Foursquare, and the two of them discussed the opportunities and challenges of being a PM, how to deal with failure, and how to be a leader on a product team.

At KubeCon last week in Barcelona, container security was a hot topic, so it shouldn’t come as a surprise that Palo Alto Networks announced today that it was buying container security startup, Twistlock for $410 million.

The company also announced it was buying serverless security startup, PureSec. It did not reveal the purchase price for this deal, but the pair of companies gives Palo Alto a set of tools for modern development approaches, as the meaning of securing applications and infrastructure changes.

Twistlock has raised a little over $63 million, according to Crunchbase data, so that price tag presumably gives its investors quite a nice rate of return, but Palo Alto probably sees what everyone else is seeing, and having a container security piece in its toolkit is going to be a highly valuable asset.

With a company like Twistlock in the fold, it not only gives them a container security platform, it’s also giving them the 120 employees with a lot of container security knowledge and 400 customers using that toolset, and that in itself may in some ways be even more valuable.

Developers have been moving to containers quickly over the last several years, and as with so many rapidly growing technologies, the security hasn’t necessarily kept up with the development of containerization in general. Companies like Twistlock and Aqua Security have been trying to build tools to change that. Both companies had a big presence at KubeCon last week.

Company CTO John Morello says his company works with the cloud native community to help define security standards, then builds that into the application. “Within Twistlock, we have literally 500 plus checks that cover the Center for Internet Security (CIS) benchmarks for Linux, for Docker, for Kubernetes and gives you that visibility. So you can see what the configuration state of your environment is, but we also give you a preventative capability. So if the environment is configured insecurely, then we won’t allow the application to be deployed,” Morello told TechCrunch in an interview at KubeCon last week.

Twistlock, which was founded 2015, got into the container security quite early, but the founders saw that this new way of developing software would require a new way of securing it. That’s partly because of the ephemeral nature of containers, but more because containerization brings with it a high level of automation, and when no humans are touching the process, it’s easier for hackers to insert themselves without anyone knowing it.

The company’s most recent funding round was a $33 million Series C investment last summer. As for PureSec, it had raised $10 million, according to Crunchbase.

Varjo‘s VR headset was the best VR headset I had ever demoed; its dual display design with a micro-OLED sweet spot enabled insanely high-resolution views without requiring a supercomputer to power it. The company is looking to inject a bit more into the real world with its new developer kit that it announced today at the Augmented World Expo.

The XR-1, as it is being called, takes the headset and mounts a pair of cameras to the front plate, piping in high-def outside imagery which it can inject real-time rendered content into, leveraging the high-end GPU your headset is connected to.

While devices like the Magic Leap One and HoloLens 2 focus on building nearly transparent display structures that allow users to see the real-world with simulated imagery, pass-through mixed reality sends everything through external camera sensors, cutting the world off from a user’s naked eye but presenting a more precisely-blended version of AR.

The Finnish startup has raised over $45 million in funding.

Transparent waveguide displays unsurprisingly have some shortcoming compared to static screens, something Varjo maintains makes their solution better for customers seeking out the highest quality imagery.

“The XR-1 can show mixed reality with true-to-life fidelity you can only achieve using video-pass- through. Lifelike mixed reality is quite literally impossible to achieve with optical-see-through systems like HoloLens,” Varjo co-founder Urho Konttori said in a statement.

Alongside the XR-1’s release, Varjo is also detailing a deepening partnership with Volvo, which has now invested directly into the company. Volvo is utilizing the headset to help test new vehicle types and interfaces inside a partially rendered environment.

Apple’s 2017 purchase of Vrvana showcased that there was some interest in showcasing how this passthrough mixed reality headset solution could bolster the technology, though Apple has already been investing heavily in pass-through mixed reality just on its iPhones rather than headsets.

The XR-1 camera module is working with two 12-megapixel cameras piping what they see to your eyes in less than 15 milliseconds.

Varjo is a much more expensive solution than the already pricey options from Magic Leap and HoloLens, the XR-1 will likely see less usage on factory floors dues to its form factor and is more likely suited for design and visualization needs. Given the base of the headset is the VR-1, needless to say it won’t be too difficult to switch between modes.

The company has yet to detail how much the XR-1 will retail for when it launches sometime in the second-half of this year, but the VR-1 retails for $5,995 so chances are it will be a tad costly.

Let’s go beyond the high-level fundraising advice that fills VC blogs. If you have a compelling business and have educated yourself on crafting a pitch deck and getting warm intros to VCs, there are still specific questions about the strategy to follow for your fundraise.

How can you make your round “hot” and trigger a fear of missing out (FOMO) among investors? How can you fundraise faster to reduce the distraction it has on running your business?

Unsurprisingly, I’ve noticed that experienced founders tend to be more systematic in the tactics they employ to raise capital. So I asked several who have raised tens (or hundreds) of millions in VC funding to share specific strategies for raising money on their terms. Here’s their advice.

(The three high-profile CEOs who agreed to share their specific playbooks requested anonymity so VCs don’t know which is theirs. I’ve nicknamed them Founder A, Founder B, and Founder C.)

Have additional fundraising tactics to share? Email me at eric.peckham@techcrunch.com.

Table of Contents

• You need to create a market for your shares
• The one month fundraise
• Thursday/Friday meetings
• The bicoastal month
• Early relationship building
• Organize your pitch better
• Research each VC’s style
• You’re not just being judged on your startup
• The money is already yours

You need to create a market for your shares

“You’re trying to make a market for your equity. In order to make a market, you need multiple people lining up at the same time.”

That advice from Atrium CEO Justin Khan (a co-founder of companies like Twitch and former partner at Y Combinator) was reiterated by all the entrepreneurs I interviewed. Fundraising should be a sprint, not a marathon, otherwise the loss of momentum will make it more difficult.

Waymo, the autonomous vehicle company under Alphabet, is bringing its self-driving trucks back to Arizona.

The company’s autonomous Chysler Pacifica hybrid vehicles, which are used in its Waymo One ride-hailing service, are a common sight on public streets in Chandler and other suburbs of Phoenix . But its self-driving Class 8 big rig trucks haven’t been in Arizona for more than year.

Waymo integrated its self-driving system into Class 8 trucks and began testing them in Arizona in August 2017. The company stopped testing its trucks on Arizona roads sometime later that year.

Those early Arizona tests were aimed at gathering initial information about driving trucks in the region, according to Waymo. This new round of testing is at a more advanced stage in the program’s development.

Testing will be conducted on freeways around the metro Phoenix area and will expand over time, according to Waymo. The company wouldn’t share details of how many autonomous trucks it has in its total fleet, how many will be in Arizona or when it will broaden its testing area outside of metro Phoenix.

The company said it will be testing with both empty trucks and with freight. However, the freight will be for testing purposes only and not part of a commercial business.

The self-driving trucks have two trained safety drivers who can takeover if needed.

Waymo has been testing its self-driving trucks in a handful of locations in the U.S., including Arizona, in the San Francisco area and Atlanta. In 2018, the company announced planned to use its self-driving trucks to deliver freight bound for Google’s data centers in Atlanta.

Waymo self-driving trucks will be sharing Arizona freeways with at least one other company — TuSimple, which runs an autonomous route (with safety drivers) between Tucson and Phoenix along Interstate 10.

Startups are often associated with the benefits and toys provided in their offices. Foosball tables! Free food! Dog friendly! But what if the future of startups was less about physical office space and more about remote-first work environments? What if, in fact, the most compelling aspect of a startup work environment is that the employees don’t have to go to one?

A remote-first company model has been Seeq’s strategy since our founding in 2013. We have raised $35 million and grown to more than 100 employees around the globe. Remote-first is clearly working for us and may be the best model for other software companies as well.

So, who is Seeq and what’s been the key to making the remote-first model work for us?  And why did we do it in the first place?

Seeq is a remote-first startup – i.e. it was founded with the intention of not having a physical headquarters or offices, and still operates that way – that is developing an advanced analytics application that enables process engineers and subject matter experts in oil & gas, pharmaceuticals, utilities, and other process manufacturing industries to investigate and publish insights from the massive amounts of sensor data they generate and store.

To succeed, we needed to build a team quickly with two skill sets: 1) software development expertise, including machine learning, AI, data visualization, open source, agile development processes, cloud, etc. and 2) deep domain expertise in the industries we target.

Which means there is no one location where we can hire all the employees we need: Silicon Valley for software, Houston for oil & gas, New Jersey for fine chemicals, Seattle for cloud expertise, water utilizes across the country, and so forth. But being remote-first gives has made recruiting and hiring these high-demand roles easier much easier than if we were collocated.

Job postings on remote-specific web sites like FlexJobs, Remote.co and Remote OK typically draw hundreds of applicants in a matter of days. This enables Seeq to hire great employees who might not call Seattle, Houston or Silicon Valley home – and is particularly attractive to employees with location-dependent spouses or employees who simply want to work where they want to live.

But a remote-first strategy and hiring quality employees for the skills you need is not enough: succeeding as a remote-first company requires a plan and execution around the “3 C’s of remote-first”.

The three requirements to remote-first success are the three C’s: communication, commitment and culture.

Ahead of LGBTQ Pride Month, Lyft is adding gender-neutral pronouns to its rider app. Now, riders can select from the following:

• They/them/theirs
• She/her/hers
• He/him/his
• My pronoun isn’t listed
• Prefer not to say

Drivers will be able to see your preferred pronoun, but they will not be able to share theirs. Moving forward, you can expect Lyft to start addressing you and referring to you by your preferred pronouns.

This helps to create space for those to share their pronouns and normalize the practice. Lyft is also partnering with the National Center for Transgender Equality to support drivers looking to change their names with educational and financial resources.

Google Maps is gaining some features previously exclusive to Google’s navigation app, Waze. The company confirmed it’s rolling out the ability for Google Maps users to see speed limits, speed cameras, and mobile speed cameras in over 40 countries worldwide — an expansion of its earlier launch of these features, which were previously limited to select markets.

The change was noted earlier by ZDNet and, of course, Reddit.

Google confirmed with TechCrunch the full list of supported countries, which now includes:

Australia, Brazil, U.S., Canada, U.K., India, Mexico, Russia, Japan, Andorra, Bosnia and Herzegovina, Bulgaria, Croatia, Czechia, Estonia, Finland, Greece, Hungary, Iceland, Israel, Italy, Jordan, Kuwait, Latvia, Lithuania, Malta, Morocco, Namibia, Netherlands, Norway, Oman, Poland, Portugal, Qatar, Romania, Saudi Arabia, Serbia, Slovakia, South Africa, Spain, Sweden, Tunisia, and Zimbabwe.

Google had not been quick to integrate Waze’s best features into its own Google Maps app, following its 2013 acquisition of the popular navigation app. Instead, it seems to prefer using Google Maps as a broader platform for helping people find places including — most importantly — nearby businesses and Google advertisers.

Above: Image credit – Android Police

But last year, some people began to spot incident reports as well as crash and speed trap reports appearing in Google Maps. Those features were not broadly rolled out to all users at that time, however.

Now, that’s starting to change.

Google began to roll out the ability for users in more countries to see speed limits and speed cameras around two weeks ago, we understand. The rollout is taking place on both Android and iOS. But Android users will additionally be able to report mobile speed cameras and stationary cameras, while both iOS and Android users will be able to see those updates during their drive.

The speed limit appears in the bottom corner of the app, while speed traps show up as icons on the roads themselves.

The features will likely appeal to users who want similar functionality as to what’s available today in Waze, but don’t either care for the Waze user interface (which can be overwhelming if you’re not used to it), or the way Waze chooses its routes.

There has been some confusion over where and when these alerts would be available, as Google failed to officially announce the features’ expansion. Adding to the confusion, was the fact that people were seeing the changes appear at different stages of the rollout in different countries around the world.

Despite the usefulness of speed-related alerts, Waze remains the more useful navigation platform due to its ability to crowdsource reports of all kinds — including police ahead, crashes, cars pulled over on the side of the road, gas prices, road closures, obstacles in your path like debris, red light cameras, and more.

 

If robots are really to help us out around the house or care for our injured and elderly, they’re going to want two hands… at least. But using two hands is harder than we make it look — so this robotic control system learns from humans before attempting to do the same.

The idea behind the research, from the University of Wisconsin-Madison, isn’t to build a two-handed robot from scratch, but simply to create a system that understands and executes the same type of manipulations that we humans do without thinking about them.

For instance, when you need to open a jar, you grip it with one hand and move it into position, then tighten that grip as the other hand takes hold of the lid and twists or pops it off. There’s so much going on in this elementary two-handed action that it would be hopeless to ask a robot to do it autonomously right now. But that robot could still have a general idea of why this type of manipulation is done on this occasion, and do what it can to pursue it.

The researchers first had humans wearing a motion capture equipment perform a variety of simulated everyday tasks, like stacking cups, opening containers and pouring out the contents, and picking up items with other things balanced on top. All this data — where the hands go, how they interact, and so on — was chewed up and ruminated on by a machine learning system, which found that people tended to do one of four things with their hands:

• Self-handover: This is where you pick up an object and put it in the other hand so it’s easier to put it where it’s going, or to free up the first hand to do something else.
• One hand fixed: An object is held steady by one hand providing a strong, rigid grip, while the other performs an operation on it like removing a lid or stirring the contents.
• Fixed offset: Both hands work together to pick something up and rotate or move it.
• One hand seeking: Not actually a two-handed action, but the principle of deliberately keeping one hand out of action while the other finds the object required or performs its own task.

The robot put this knowledge to work not in doing the actions itself — again, these are extremely complex motions that current AIs are incapable of executing — but in its interpretations of movements made by a human controller.

You would think that when a person is remotely controlling a robot, it would just mirror the person’s movements exactly. And in the tests, the robot does so to provide a baseline of how without knowledge about these “bimanual actions,” many of them are simply impossible.

Think of the jar-opening example. We know that when we’re opening the jar, we have to hold one side steady with a stronger grip and may even have to push back with the jar hand against the movement of the opening hand. If you tried to do this remotely with robotic arms, that information is not present any more, and the one hand will likely knock the jar out of the grip of the other, or fail to grip it properly because the other isn’t helping out.

The system created by the researchers recognizes when one of the four actions above is happening, and takes measures to make sure that they’re a success. That means, for instance, being aware of the pressures exerted on each arm by the other when they pick up a bucket together. Or providing extra rigidity to the arm holding an object while the other interacts with the lid. Even when only one hand is being used (“seeking”), the system knows that it can deprioritize the movements of the unused hand and dedicate more resources (be it body movements or computational power) to the working hand.

In videos of demonstrations, it seems clear that this knowledge greatly improves the success rate of the attempts by remote operators to perform a set of tasks meant to simulate preparing a breakfast: cracking (fake) eggs, stirring and shifting things, picking up a tray with glasses on it and keeping it level.

Of course this is all still being done by a human, more or less — but the human’s actions are being augmented and re-interpreted into something more than simple mechanical reproduction.

Doing these tasks autonomously is a long ways off, but research like this forms the foundation for that work. Before a robot can attempt to move like a human, it has to understand not just how humans move, but why they do certain things in certain circumstances, and furthermore what important processes may be hidden from obvious observation — things like planning the hand’s route, choosing a grip location, and so on.

The Madison team was led by Daniel Rakita; their paper describing the system is published in the journal Science Robotics.

CrowdStrike, in preparation for its Nasdaq initial public offering, has inked plans to sell 18 million shares at between $19 and $23 apiece. At a midpoint price, CrowdStrike will raise $378 million at a valuation north of $4 billion.

The company, which develops cloud-native endpoint protection software to prevent cyber breaches, has raised $480 million in venture capital funding to date from Warburg Pincus, which owns a 30.2% pre-IPO stake, Accel (20.2%) and CapitalG (11.1%), according to its IPO prospectus. The business was valued at $3.3 billion with a $200 million January 2018 Series E funding.

Sunnyvale, Calif.-based CrowdStrike outlined its IPO plans two weeks ago. The company plans to trade under the ticker symbol “CRWD.”

The cybersecurity unicorn follows several other highly valued venture-backed startups to the public markets, including Uber, Lyft, Pinterest, PagerDuty and Zoom. CrowdStrike’s offering will represent only the second cybersecurity IPO in 2019, however. It follows Israel’s Tufin Software Technologies, which went public earlier this year. Last year, for its part, saw the IPOs of Zscaler, Carbon Black and Tenable.

Founded in 2011 by former McAfee executives George Kurtz and Dmitri Alperovitch, CrowdStrike is up against steep competition in the cyber protection space. It’s battling the likes of McAfee, Cylance, Palo Alto Networks, Symantec, Carbon Black and more.

The business’ revenues, fortunately, are growing at an impressive rate, increasing from $53 million in 2017 and $119 million in 2018 to $250 million in the year ending January 31, 2019. In the quarter ending April 30, 2019, its revenues shot up from $47.3 million in 2018 Q1 to between $93.6 million to $95.7 million.

CrowdStrike is also backed by IVP, March Capital Partners, General Atlantic and others.