The power of networks and the metrics you need to raise Series A
A weekly newsletter that profiles women in venture and technology
Welcome to Heroa, a weekly newsletter that aims to raise the profile of women in venture. If you enjoy what you read, please do share this newsletter with friends and subscribe - Alexandra.
I’ve recently been learning about the network effect as part of the Newton Venture Program. Playwrights, poets, and scientists have proposed that everyone on the planet is connected to everyone else by six other people. However, Facebook research shows that each person in the world (at least among the 1.59 billion people active on Facebook) is connected to every other person by an average of three and a half other people.
PayPal. Microsoft. Facebook. Uber. Twitter. Salesforce. These are some of the most impactful and significant companies in the world.
Each one is very different in many ways, but there’s a single property that defines them all and lies behind their success.
That property is network effects.
This three-year study shows that network effects are responsible for 70% of the value created by tech companies since the Internet became a thing in 1994. Even though they are only a minority of companies, companies with Network effects end up creating the lion’s share of the value.
Round up of the news this week
🗳️ Founders to keep more voting rights as the FCO plans to kickstart the London IPO market. The FCO is allowing more dual-class shareholdings to help London compete with New York and Hong Kong.
📈 Biometric screening company Clear Secure led by Caryn Seidman-Becker, made its public market debut on Wednesday, hitting a $4.5B valuation. Turkish e-commerce giant Hepsiburada foundered by Hanzade Doğan Boyner, lists on Nasdaq at a $3.9B valuation.
♻️ Emma Watson invests in FabricNano, a start-up creating novel solutions to the plastic crisis.
💸Peanut, a social network for women, launches a micro fund to invest in pre-seed stage startups.
🍎 The relationship between Apple and Google has been rocky over the years, but Apple has quietly become Google’s largest corporate customer for cloud storage, with a roughly $300mn spend forecast for 2021.
From the investors
Series A metrics Metrics for Series A rounds are much less clear than they used to be, and different investors have different frameworks for evaluating Series A opportunities. That said, there are signals that every Series A investor is looking for. Knowing these signals can help you know when to begin fundraising. Annelies Gamble, Co-Founder and Partner @Scribblevc bases the information in this doc on what she’s seeing across her portfolio as well as conversations with dozens of Series A investors.
The metrics you need to raise series A. This offers an alternative guide as to what you should be tracking to realise series A funding. Alda Dennis of Initialized Capital breaks down external data points and internal milestones that enabled Initialized companies to raise Series A funding in three categories – SAAS, D2C and marketplace.
10 marketing lessons for every early-stage founder. Sophia Bendz and Christian Meermann at Cherry Ventures share best practices for start-up marketing.
From the operators
Dispelling the networking myth: why cultivating relationships matters. As we get older, finding friends, partners and job opportunities takes much more effort than it did during our years at school and university. Unfortunately, we don’t update our belief systems to meet this new reality. The consequence is that any attempt to be deliberate in this sphere of our lives is often viewed negatively. Erica Young of the Reliants projects explores why you should intentionally cultivate relationships.
The 4 Enterprise Sales Misconceptions for Startup Founders. Closing a blockbuster multi-million dollar deal with a Fortune 100 company can be a massive win for a startup. Amy Volas says don’t get too attached to the idea without knowing what you’re getting into. Enterprise sales are not a simple switch to SMB sales — it’s a completely different beast.
How to connect your vision to reality in your business. It starts by asking a simple question…What is your vision for your business? I know this question, whilst simple, is one many founders find challenging to answer. Ellen Donnelly of The Ask shares how you can capture your vision.
Events
💥 Why VC’s say no. Tuesday, July 6 13:00 BST. Sign up here.
For any startup founder looking for the next growth stage, understanding why VCs say ‘no’ is as important as why they say ‘yes’.
Panel: Zoë Chambers, principal, Octopus Ventures, Camilla Mazzolini, principal, firstminute capital and Dave Rosenberg, head of marketing EMEA, Oracle NetSuite.
🎓 The Prof, the VC, and the CEO. Tuesday, July 6, 18:00 BST. Sign up here.
An open discussion on getting funded. Three top minds will debate optimal decision-making processes as a founder and the future of VC.
Panel: Luisa Alemany, Professor at LBS, Ian Chapman-Banks, CEO at Sqreem Technologies and Francesco Corea Investor at Balderton.
💻 TechCrunch Early Stage 2021: Marketing & Fundraising, Thursday and Friday, July 8-9, 2021. Sign up here.
Early-stage founders can participate in highly interactive group sessions with top investors and ecosystem experts in fields ranging from fundraising and marketplace positioning to growth marketing and content development at this two-day virtual event.
Opportunities
Analyst - Ada Ventures, and here’s some more information about the role
Numerous roles across the seed and growth portfolio (Analyst/Associate/Senior Associate) - La Famiglia
Analyst and Associate - Capital T - a $45M early-stage fund
Events Marketing Manager - Bryter - a no-code service automation platform backed by Tiger Global
SEE YOU NEXT MONDAY!
If you have any comments, questions, or want to chat about start-ups and venturing, then do drop me a comment.
Written by Alexandra Wyatt, based in London but (usually!) a global traveller. You can also reach me on Twitter.