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The latest news on Startups from Business Insider

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    annoyingThis answer originally appeared on Quora as an answer to the question, "What is the best way to deal with a VC who became very 'annoying' after investing and taking a board seat, and adds more problems than solutions for a startup?" 

    Examples of this annoying behavior include "disagrees with the founders on everything without offering alternatives....Always changes his mind, never offers valid alternatives or relevant insights, doesn't understand the market, seems to just want to create issues instead of helping."

    The answer is reprinted here with the permission of its author, Jason Lemkin.

    Well, first, sorry it's too late.  You chose poorly — if you had choices.  If you didn't have choices, then, it's just a shotgun marriage you have to live with.

    Having said that, this "shoot from the hip" and "add excessive unsolicited advice" is relatively common in certain VCs.

    Here are some tips:

    • First, just listen.  You don't have to act.  Acknowledge what they are saying, and say you'll look into it.  That doesn't mean you actually do what they say.  Every founder has some dumb, never-used feature they built just because a VC told them to.  Don't be that guy.
    • Don't argue.  See prior point.  Just doesn't help with these guys.  They aren't your sparring partner.  They just need to hear themselves talk and bark orders.  Let it go.
    • Send out very detailed board packs at least 3-4 days ahead of time.  Then — try to have 60 minute board meetings.  Keep it tight, on track, and you can — since you've already sent out every metric, every update, many days in advance. 
    • Get someone you trust on the board.  Pick an outside director you know and trust — and with a complementary personality — to join the board.  He or she can be an important counterweight.
    • Don't overspend.  Most important here is not being too beholden to this guy.   If your burn rate is too high, and you are running out of money — he'll be the boss.  Dial down the spend instead until either you can raise more capital, or get to the next stage of revenue.

    And hey — you're not alone. 

    SEE ALSO: Amazon's tech boss discovered a bad side effect of being a jokey manager

    Join the conversation about this story »

    NOW WATCH: Here are 8 steps to follow if you want to be a millionaire

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    A Plus team

    In April 2014, Evan Beard and Kendall Dabaghi launched a website, A Plus, in Ashton Kutcher's living room. They worked from the actor's Los Angeles pad for the next six months tirelessly, building a media site they hoped could become the next BuzzFeed.

    Beard and Dabaghi moved to New York City and now their site has has 50 million monthly readers, according to the site's internal analytics. It just raised a $3.5 million convertible note at a $30 million valuation cap, sources with knowledge of the deal tell Business Insider.

    The founders confirmed the fundraise to Business Insider but declined to comment on the valuation. Investors include Kutcher and Guy Oseary's Sound Ventures, A-list celebrities (who sources says are getting offered a lower valuation of ~ $20 million), SV Angel, Axelspringer*, Gary Vaynerchuck, Venture 51, Richard Chen of Ceyuan Ventures, Social Starts, Norwest Venture Partners' Jared Hyatt, and Babble co-founder Rufus Griscom.

    sxsw 2015 party ashtonWe hear rappers Nicki Minaj and Lil Wayne are being asked to invest and that they're already part of the A Plus network.

    A Plus (A riff on Kutcher's initials A+K) ended the year with $2 million in revenue, up from $0 eleven months prior, a source says, adding that the founders hope to eclipse BuzzFeed's 215 million monthly uniques by May.

    Kendall Dabaghi A PlusDespite its soft launch in April, the site has actually been around for a bit more than a year. According to Business Insider's Rob Price, who did a deep dive into Kutcher's viral site, A Plus was originally a product discovery service that launched in 2013 but failed to gain traction. It pivoted to become an editorial shop in early 2014. 

    Beard met Kutcher when he was the founder of Etacts, a startup that went through Y Combinator's accelerator program in Silicon Valley and was acquired by Salesforce. Kutcher attended the demo day where Beard presented.

    Beard and Dabaghi then co-founded Gridtech, a company that helped analyze large sets of data. Gridtech was acquired by Spirent Communications. 

    The software engineers teamed up with Kutcher and plotted ways to combine their technical backgrounds with Kutcher's extensive social reach. The result was A Plus, a viral, socially-concious media company that uses celebrity influencers to boost stories farther across the Internet. Beard is CEO, Dabaghi is president, and Kutcher is chairman of the board.

    a plus ceo evan beard"We built technology to source content from around the web before it goes viral," Beard says. "It can predict the performance of different pieces of content and we use it to reach as many people as possible. We combined that with the social reach of Ashton and we were able to reach tens of millions of people in first few months."

    Beard and Dabaghi wouldn't say exactly how their algorithm works, but it involves crawling lots of sites, such as news publications, YouTube and Tumblr, and determining which new posts are starting to gain traction. They hired a machine learning specialist to help analyze the data.

    Links are then kicked to A Plus' 20-person newsroom, which curates the content and pings relevant celebrity partners to blast the stories to their social media followings. Beard and Dabaghi say celebrities see more engagement in their social streams when they share A Plus' content. Kutcher, they say, saw his own engagement increase 10X.

    The long-term vision is to partner with all sorts of influencers across many verticals, like pro athletes for a sports section.

    When asked if the celebrities are paid to partner with A Plus, Beard replied: "There are a lot of reasons they work with us."

    Beard and Dabaghi plan to announce the celebrity partners sometime in the next few weeks.

    *Axelspringer is a Business Insider investor

    Join the conversation about this story »

    NOW WATCH: A lawyer in Florida has come up with an ingenious way for drivers to evade drunken-driving checkpoints

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    Mixpanel CEO Suhail DoshiNot many people have the luxury of working with the Paypal "Mafia," the big shots from early days of the payment company that sold to eBay for $1.5 billion in 2002.

    But for those who do, like Mixpanel’s 26-year old CEO Suhail Doshi, it meant the difference between zero and $835 million.

    In the spring of 2008, Suhail Doshi received an unexpected message through IRC, a chat forum popular among hackers and computer engineers: “Come intern at Slide.”

    Slide, an app widget-making startup founded by ex-PayPal CTO Max Levchin, was one of the hottest startups back then, worth roughly $500 million (it was later acquired by Google). Doshi was a self-taught programmer, majoring in computer systems engineering at Arizona State University. It was a no-brainer for him to take the offer.

    At Slide, Doshi wasn’t assigned to any specific project, working almost independently on different ideas. But he really liked his time there — so much that he would work past midnight every day.

    Slide’s CEO Levchin took an immediate liking to Doshi. Levchin loved that kind of intensity. Almost every day, Levchin would sit next to him, hearing new ideas and pitches.“I don’t know why he did it, but I got to build this great working relationship with Max,” Doshi tells Business Insider.

    Levchin liked him so much that he tried to get Doshi out of school and hire him full-time when the three-month internship was over. He even called Doshi’s mother and tried to convince her that it would be OK for Doshi to drop out of college. But it was a tough sell, and Doshi ended up returning to Arizona State at the end of the summer.

    The Startup Bug

    Doshi returned to school, but his mind was already back in Silicon Valley. “I got the [startup] bug. I got bit really hard,” Doshi tells us.

    He tried many different things, but eventually settled on an idea he got from working at Slide: building a sophisticated analytics software that helps apps track and learn more about its users. Although general analytics software like Google Analytics were available, Doshi noticed Slide was spending over $1 million on building its own customized, internal analytics software.

    “At Slide, they would measure crazy things. It was like they were quantifying every part of what they did,” Doshi says.

    Mixpanel is designed to do exactly that. It measures more detailed “engagement” numbers, such as when the user clicks “likes” on Facebook or “filters” on Instagram, not the more traditional pageviews or install figures. He believes pageviews and uniques are “BS metrics” that fail to gauge the true value of your product.

    When Doshi built his first prototype, he sent it to Levchin. The feedback was crushing: “The Slides of the world would build this themselves,” Levchin told him.

    But Doshi didn’t stop there. He soon found a cofounder, Tim Trefren, from the math course he was taking. The two became close friends, spending almost 16 hours a day and every Friday night at the computer lab, working on Mixpanel.

    “It was just rapid product iteration. Every day, we were just cranking,” Doshi says.

    Eventually, the work paid off. In the summer of 2009, they came up with a much improved product. It won them a spot on Y Combinator and $15,000 in seed funding. A few months later, even Levchin bought in: Slide became Mixpanel’s first big-time customer, nearly 10 months after Doshi got that first feedback from Levchin.

    "Business Dad"

    Max LevchinBut the $15,000 YC money didn’t last long. Even though Doshi and Trefren didn’t spend much — they rented a small one-bedroom apartment, living out of a suitcase and a $200 grocery budget - they reached a point where they were a week away from going bankrupt.

    At the time, investors were lukewarm on business software, and the economic downturn wasn’t helpful either.

    "Half of our YC batch died in 2009. Today, 90% get funded," Doshi says.

    But Levchin, after using Mixpanel for a few months, saw its potential and decided to invest $500,000 (alongside Bebo founder Michael Birch) into a seed round in 2010. "If Max and Michael didn’t put in $500,000, there would be no Mixpanel," Doshi says.

    Levchin helped in future rounds too. In 2011, when Mixpanel struggled to find Series A investors, Levchin brokered a deal with Sequoia to get a $1.25 million "bridge round," where another Paypal mafia member Keith Rabois joined as well.

    A year later, Levchin helped again, connecting them with VCs like Andreessen Horowitz, who ended up leading a $10.25 million Series A round. Andreessen Horowitz also led the $65 million Series B round in December that gave Mixpanel a $865 million valuation.

    "Max has helped us with every funding round in the history of the company," Doshi says. "I don’t know if we’d be here without him, honestly."

    Mixpanel continues to be one of the fastest growing business analytics apps today. It now caters to 3,000 paying customers, analyzing over 43 billion data points, including clicks, swipes, and taps (Mixpanel calls this “actions). It’s putting a lot more emphasis on mobile, and is even experimenting with predictive analytics.

    But there’s lots of competition, too. Companies like Google Analytics, Omniture, and KISSmetrics are all vying for market share. Yet, Doshi seems undeterred by any of them. When asked about those competitors, Doshi pointed back to the first feedback he received from Levchin.

    "Our competitor is someone building this themselves," he says. "Max is still kind of right."

    And he knows if things ever get tough, he’ll have someone to turn to. "Most people are scared of their investors, but you can pretty much go to Max even with your worst problems," Doshi says. "He’s like my business dad."

    Join the conversation about this story »

    NOW WATCH: A lawyer in Florida has come up with an ingenious way for drivers to evade drunken-driving checkpoints

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    Financial technology startups are getting funding from the very industry they hope to disrupt.

    Known in short as fintech, these startups are changing the way people pay, lend, and invest, threatening the long-established and entrenched financial systems. In the past couple years, fintech has increased in notoriety among financiers and investors, most notably in London and New York. 

    From investing in growing companies to launching startup accelerators, Wall Street banks have started pouring their own money into supporting fintech startups, instead of trying to stamp them out. 

    Following the change

    Wall Street has started pouring money into the space because the small size fintech startups can move much faster than big banks, and stay on the cutting edge of what a new generation of digitally-focused investors want.

    A Goldman Sachs equity research report in March estimated $4.7 trillion in revenue for traditional financial services at risk of being displaced by new technology-enabled entrants. These include new solutions in funding, wealth management, and payments.

    "First generation online financial services companies ... traditional banks, asset managers, and payments companies are all working to adapt to these behavioral, demographic, and technologic realities," the report said. "We expect partnerships, acquisitions, and competition will be key to the way the vertical develops."

    Hardeep Walia, co-founder of Motif Investing, which has backing from Goldman Sachs and JP Morgan, said that banks are looking at a drastically different client base in the next several years. Regulation has also tightened on Wall Street, he said, but now allows more freedom to newcomers entering the space.

    By partnering with small startups, he said banks can start to gain insight into what may become the next model of investing.

    “I think there are great opportunities to partner, even though a lot of these technologies may be disruptive," Walia said. "If you’re going to get disrupted, smart firms are going to want to partner with companies that are most disruptive."

    mobile banking chart

    Working together

    For Motif Investing, working with Goldman Sachs and JP Morgan is a strategic partnership Walia said, not just a financial one.

    "Part of our decision to go work with them is they obviously have a lot of expertise in financial models and algorithmic trading, and understand needs and customers," Walia said.

    Barclays is another example of a bank getting in the game, with a Techstars partnership to help support and run a fintech startup accelerator. The accelerator started in London and will launch in New York this summer. 

    A Barclays spokeswoman told Business Insider that it's hard to innovate within the bank, so the fintech accelerator will allow Barclays to stay at the forefront of change. The bank also wants to support fintech startups whether or not they continue working with the bank after the program.

    "Any innovation that Barclays wants to do, we can't do it all within our four walls, and we're very keen to openly innovate and draw on the benefits and expertise of the startup ecosystem, she said. "We're not afraid to go out there and partner with others if need be."

    There are problems, though

    According to the founder of Estimize Leigh Drogan, the intersection between Wall Street and fintech has run into a couple problems. On one side, fintech startups are hesitant about accepting funding from banks, unless there are two to three involved. On the other side, banks have become wary of having their business eaten away.

    "It’s going to be very hard for banks to wrap their heads around really how to invest in or get involved in these companies, because they’re mortal threats to these banks," Drogan said.

    For those that do invest, Drogan said the biggest upsides are positive PR and an inside look at potential threats.

    "I just don’t see how they get out of this on the plus side," he said. "But they can try.”

    Ophir Gottlieb, co-founder of financial data visualization startup Capital Markets Labs, said its unlikely that banks will get left behind. And he sees zero chance of Wall Street changing for the sake of innovation.

    Banks are venturing into fintech solely to protect their own interests and profitability, Gottlieb said, but the industry is at an inflection point. Gottlieb sees it as a coin toss between two possibilities: either banks will change for the betterment of all, or they will allow innovation to pass.

    "If you look at history, not innovating has not been a wealth-losing strategy," Gottlieb said. "Is this wave of interest from people in technology in financial services a moment in time and will disappear? Or will this actively affect change? I don't think it's clear on the institutional side what will happen."

    The possibility of change

    Kyle Bazzy, president of financial media startup Benzinga, thinks that for such a traditional sector, Wall Street has actually been moving pretty fast on this.

    At Benzinga's upcoming Fintech Awards Gala for innovation in capital markets, Bazzy said there's a notable presence of established institutions like TDAmeritrade and E*Trade, as well as several startups backed by Wall Street banks.

    "You’ll see the innovative companies, that even though they’re very large and were one of the barriers, they continually prove to be fluid enough where they want to stay in front of the innovation," he said. "I think on the other side of that you’re going to have some that don’t. And in my opinion they will be disrupted."

    The barrier to entry for fintech startups has fallen enough so that they can now complete with established institutions, Bazzy said. And while they still are too small to pose a huge threat now, embracing fintech startups could have its advantages in the future.

    In short, continually losing out on the transfer of wealth to new generations could lead to a "death by a thousand cuts," Bazzy said.

    "It’s crazy to think that they’ll go out of business, but crazier things have happened for companies that at one point were the technology innovative company of their sector, then years later are mere memory," Bazzy said. "And you can definitely see things going that way, just because how archaic and legacy a lot of their technology is right now."

    Join the conversation about this story »

    NOW WATCH: This is what separates the Excel masters from the wannabes

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    The modern gentleman is too busy to shop, but he still wants to look his best.

    Luckily, the e-commerce boom has reached men's clothing with a wide number of services catered to how men like to shop — not very often.

    From subscription services like Trunk Club to a traditional internet retailer that simplifies the online shopping experience, these services can help you step up your style game without spending a lot of time.


    Join the conversation about this story »

    NOW WATCH: 6 little-known Excel shortcuts that will impress your boss

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    Snapchat CEO Evan Spiegel

    ‘A million dollars isn’t cool. You know what’s cool? A billion dollars.”

    That immortal line, uttered in the film The Social Network by Justin Timberlake (playing Napster co-founder Sean Parker) to Jesse Eisenberg, playing Facebook founder Mark Zuckerberg, has become the standard for any startup seeking to make a mark on the world. If you’re not worth a billion dollars, why are you even trying?

    But we are now seeing valuations of startup companies – often with no appreciable revenue, let alone profit – that might have even Parker whistling.

    Pinterest, which lets people “pin” images they like to web pages and share them in a social network, last week raised another $367m (£245m)in funding, from a number of investors. That implies the business is now worth some $11bn: about £1bn more than Sainsbury’s. Snapchat, maker of a mobile app that provides short-lived photos and videos in a different social network, has raised $200m from China’s Alibaba, valuing it at a reported $15bn – or more than Marks & Spencer, Ladbrokes and the Wetherspoons pub chain added together.

    These are some of firms currently attracting the biggest valuations – but can they possibly be worth it?

    Pinterest logo


    Valuation $11bn, after seven rounds of formal funding

    Business model Users see and create pages of “pinned” images taken from all over the web, which they can share with others; advertisers can also put up their own images and get them in front of users, either through sharing or by direct addition. A “buy” button lets people buy things directly.

    Is it worth the money?“Pinterest knows what its users aspire to,” Ben Thompson, an independent analyst writing at, said as the latest investment was announced last week. “That may be a vacation, a house or a hobby; it can be a significant event like a wedding or a baby. All of these involve big-ticket purchases as well as the potential formation of lifelong brand affiliations.”

    That makes it attractive for both brand advertising and direct marketing, he says, especially as 80% of users are women, who can be difficult to reach on other internet sites.

    Meghan Burns of upmarket clothing chain Vineyard Vines told Forbes magazine that, with Pinterest, “at least people have shown some intention to be served the content you’re providing them. As a luxury brand, it’s a huge step in the right direction.”

    Pinterest knows what people are looking at. What it needs next is to persuade its users to buy on the site, and keep buying.

    Snapchat logo

    Snapchat logo Photograph: Public domain


    Valuation $15bn

    Business model Snapchat provides self-destructing photos and short videos from people in your social network, and recently started offering links to video stories from news organisations such as Sky, Yahoo News, Cosmopolitan and more.

    Its potential revenue streams include putting adverts into the stream of pictures people see; charging news organisations for visibility; and letting people buy “stickers” (online graphics) to send to their contacts, as WeChat and Line do in China and Japan. The most valuable opportunity could be turning its app into a “platform” that other services could use for payment or other services. They would then be integrated into Snapchat, which would then act almost as an “app store” in its own right, skimming off business.

    Is it worth the money? Snapchat has more than 100 million monthly active users, and a huge proportion of that total are teenagers, who within a few years will be earning, and (it hopes) still using its service. WeChat (which has 1.1 billion users, with 440 million monthly active users) is expected to achieve revenues of $1.1bn from in-app purchases this year; if Snapchat can grow big enough and get people to use its service in the same way, it could easily make comparable money.

    Buzzfeed logo.


    Valuation $850m

    Business model BuzzFeed is often mistaken for a non-serious news organisation (with people pointing to its love of listicles). But rather as print newspapers’ business model is to bring advertisers and readers together, BuzzFeed aims to bring brands and internet browsers together by creating “native advertising” – viral content built with the brand – which then spreads like wildfire online, carrying the brand’s name. It has more than 200 staff, is profitable and generates revenue of more than $100m annually.

    Is it worth the money? The Washington Post is valued at about $250m; Tribune Publishing, owner of the LA Times, about $490m. But BuzzFeed, born in the social internet age, doesn’t care about banner adverts or pay-per-click revenues; it wants people to pass on what they find on its site and reach as big an audience as possible.

    Marc Andreessen, the co-founder of Netscape, who now runs venture capital company Andreessen Horowitz, recently invested and talks of “a profoundly important new media institution”. It may be the first of the “new newspapers” for the web.

    Uber logo.



    Valuation $41bn

    Business model Uber insists it is a “ride-sharing” company, rather than a taxi business, which lets it circumvent many inconvenient, and expensive, regulations governing taxi use in cities around the world.

    It takes a slice from the payments between its customers – the passengers – and drivers it pairs them with, who own their own cars. It owns no vehicles and none of the drivers are employees. By undercutting standard taxi companies, and encouraging people who couldn’t otherwise afford to be taxi drivers to get into the trade, it has unlocked a huge market of willing travellers and car owners.

    Is it worth the money? Many in Silicon Valley think so, arguing that Uber’s strength lies in its logistics algorithms, which match would-be riders with the location of drivers.

    Those algorithms could be used for all sorts of other delivery services, so Uber could potentially expand into product delivery to fixed locations. “They have the highest potential of any of the companies on this list,” says Thompson. “They are making a bid to be the physical connection between everyone and everything.” The sky may be the limit.

    Flipkart logo.


    Valuation $11bn

    Business model Established in 2007, Flipkart sells goods online in India via a network of 4,000 sellers and 13 warehouses, from which it ships to 300 cities. In 2013 it changed its business model to a “marketplace” rather than an “inventory” one, to cut the amount of stock it holds.

    Five out of six Indians who go online visit Flipkart, the company claims, and it has 30 million registered users – three times larger than its nearest rival. It is aiming for annual revenues of about $3bn this year.

    Is it worth the money? Flipkart is essentially India’s version of Amazon, homegrown and thriving. “It’s all about scale and potential opportunity,” says Neil Shah, an analyst for CounterPoint Research who lives in Delhi. “Flipkart has a huge opportunity to maximise its reach, scale and revenues. It is hiring lots of product and engineering folks and building a “big data” and analytics team to learn more about consumers, purchasing habits and so forth, which will propel it ahead of the competition.”

    Though Amazon plans to launch in India, Flipkart has the advantage of knowing its audience, in a country where three-quarters of the 800 million population have yet to go online.

    shazam logo.


    Valuation $1bn

    Business model The Shazam mobile app can identify songs, or known sounds (from adverts) and gives users the option to buy the songs directly, or to connect to special offers from brand advertisers.

    Is it worth the money? Having started as a way to identify (and buy) songs heard on the radio, Shazam is trying to inveigle itself into the £200bn worldwide TV advertising market by letting advertisers connect to would-be customers – witness the “Shazam now for special offers” messages starting to appear on TV ads.

    It’s not yet profitable, but insists that’s only because it’s adding staff. As music moves away from downloads to streaming, and TV advertising is squeezed by Google and Facebook, its future isn’t assured. But it is unique.

    Spotify logo.


    Valuation $5.7bn

    Business model Provides an advert-supported or subscriber-paid source of all the streaming music you could ever want to listen to (apart from Taylor Swift and a few other holdouts). Listeners don’t “own” the music; it’s streamed to their desktop or mobile device, so requires a decent internet connection – but no CD drive.

    Is it worth the money? Founded in 2006, Spotify has expanded to 53 countries, covering an internet population of more than 1 billion people, but claims just 50m users worldwide, of whom only 12.5m are paying.

    Chief executive Daniel Ek is sure people will, eventually, shift to paying the monthly £9.99 subscription. But despite its revenues, Spotify isn’t yet profitable, and about 70% of those revenues go to pay musicians and labels.

    Meanwhile, similar streaming rivals for paying customers – including Pandora, Deezer, Apple’s Beats and Google’s YouTube – aren’t going away. “A picture emerges of Spotify squeezed in the middle [between Beats and YouTube] … it would be foolish to underestimate the scale of the challenge it faces,” Mark Mulligan of Midia Consulting wrote on his Music Industry Blog.


    This article originally appeared on

    This article was written by Charles Arthur from The Guardian and was legally licensed through the NewsCred publisher network.

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    NOW WATCH: Peter Thiel's 3 Keys For Building A Successful Startup

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    Y Combinator head Sam Altman agrees with other recent complaints that early stage startups are often overvalued.

    But he blames investors, not the founders who started those companies.

    His remarks counter a Twitter rant earlier this month from Dave McClure of rival accelerator 500 startups, who criticized some founders for insisting on high valuations, then balking at terms that would protect small investors in case of an early exit.

    McClure wrote "YOU might be worth a million (someday), but your pre-revenue company is not... and it def ain't worth $8-12M+ cap."

    Here's what Altman said on Twitter earlier today:

    Altman's opinion on seed-stage valuations is worth noting because Y Combinator is the most famous and certainly one of the most successful startup "accelerator" in Silicon Valley. Companies started there include two so-called decacorns – private companies valued above $10 billion — in Airbnb and Dropbox, plus numerous other big success stories like payments company Stripe (recently valued above $3 billion) and online game-viewing company Twitch (bought by Amazon for almost $1 billion last year).

    These days, graduating from YC is pretty much a guarantee that a company will be able to raise at least a seed round. But these rounds are probably going to be expensive for investors.

    SEE ALSO: The 25 most valuable startups in San Francisco

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    NOW WATCH: Peter Thiel's 3 Keys For Building A Successful Startup

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    Unicorn mask

    Investor Bill Gurley has warned that Silicon Valley's golden age could soon be over — and that some of today's biggest startups could go down with it, The New York Times reports.

    Gurley is a prominent investor known for investments in Uber and Snapchat. 

    But Gurley is also known for his pessimistic outlook on the tech industry. He warned during a talk at SXSW that "a complete absence of fear" in Silicon Valley had led venture-capital firms to take big risks on tech companies.

    Gurley went on to say that Silicon Valley's optimism could lead to the death of so-called "unicorn" companies — startups that reach a $1 billion valuation before their IPO. Those companies could face a turn in the market in the near future. "I do think you'll see some dead unicorns this year," Gurley said.

    Right now, becoming a $1 billion "unicorn" is a badge of honor for any startup. Work messaging tool Slack famously set its sights on becoming a unicorn, with founder Stewart Butterfield telling Fortune that it was the company's aim: "Yes, it’s arbitrary because it’s a big round number. It does make a difference psychologically. One billion is better than $800 million because it’s the psychological threshold for potential customers, employees, and the press."

    Fortune devoted its February cover story to tech unicorns, pointing out that since the term was coined back in 2013, the number of unicorns has grown from 39 to more than 80. The rise of unicorns is a good indicator of the rise in available venture capital for startups, and shows how prepared investors are to fund young companies.

    The number of tech unicorns is thought to have doubled in the past 12 months, with data from Digi-Capital showing that there are now more than ever before. In 2014 there were 68 unicorns in mobile internet companies alone, with a total value of around $261 billion.

    Mobile internet billions valuation pyramid digi capital

    Elsewhere in the SXSW talk, Gurley discussed whether he thought driverless cars were going to change the world. He said he thought driverless cars were often used by large tech companies to distract journalists and that driverless cars were not yet technologically feasible.

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    NOW WATCH: The New Mercedes Driverless Car Even Has The Driver's Seat Facing Away From The Road

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    18 Mistakes That Kill Startups

    1. Single Founder – as a single founder you have almost zero chance of getting funding from Paul Graham. Why? It’s not a coincidence, he says, that founders who succeeded did so as a team of at least two.
    2. Bad Location – you can change everything about a house but its location. Likewise, if your startup is in a bad location, you can’t change the nature of that location. It’s easier to move the startup. Where to? Silicon Valley.
    3. Marginal Niche – by choosing an obscure niche a startup may paint themselves in a corner. If you are afraid of competition, this is not the way to avoid it.
    4. Derivative Idea – there are only so many Twitters for pet owners one can come up with. The bottom line is that the Google of tomorrow will not be like Google.
    5. Obstinacy – or inability to adapt kills startups who would have survived had they not been too stubborn to see what their users were telling them.
    6. Hiring Bad Programmers – knowing a good programmer from a bad one often takes being a good one yourself, or having a trusted one on your team. Exceptional programmers are always in short supply. So the odds are stacked up against hiring good ones.
    7. Choosing the Wrong Platform – how fast you can scale will determine whether your startup lives or dies once you get traction. On the wrong platform scalability will be the bottleneck. And users often don’t wait for you to figure it out.
    8. Slowness in Launching – before you actually launch you are in the dark about whether your startup should even exist. The longer you delay the launch the more you delay getting the answer. If you are afraid to know what the answer is, you might want to ask yourself why.
    9. Launching Too Early – launch too early, though, and you may be completely unprepared to handle your growth, or worse yet to present a usable product.
    10. Having No Specific User in Mind – somewhere someone will for sure be interested in your product, you just don’t know who yet? Sounds like those people may not exist. Be sure to check.
    11. Raising Too Little Money – you get what you spend on. With too little money you may not be able to flesh out your product in to its full potential.
    12. Spending Too Much – spending too much before you grew enough to have the numbers to raise the next round, and you are out of cash, which often spells the end.
    13. Raising Too Much Money – raising too much will likely make you feel like a huge success even before you made anything useful. At the end of the day it’s users, not investors, you want to impress the most.
    14. Poor Investor Management – if the choice is between making investors happy or making your users happy, always choose the users. If the user is happy your investors will make money eventually.
    15. Sacrificing Users to (Supposed) Profit – you can always make money later. This however, cannot be said about making users happy. You need to make something they want now.
    16. Not Wanting to Get Your Hands Dirty – you can’t solve all your problems with coding. Businesses are built on relationships. Go out and meet those people.
    17. Fights Between Founders – founder conflict is too common. Founders being ambitious people are almost bound to disagree.
    18. A Half-Hearted Effort – a lack of determination to see the startup through to the end is not rare. If you feel like you have other options in life than building your startup, you will probably mentally hang on to them.

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    y combinator demo day

    Today is prestigious startup incubator Y Combinator's Demo Day for its Winter 2015 class. 

    Every year, Y Combinator has two funding cycles — one goes from January through March, and the other is from June through August.

    At the end of each of these funding cycles, participating startups pitch their ideas at Demo Day to potential investors who want to fund the next big thing in tech.

    Y Combinator provides funding to startups and perhaps even more importantly, gives visibility to startups to help them catch the eye of top Silicon Valley investors. Companies like Stripe, Airbnb, Twitch, Reddit, Zenefits, and Dropbox are all Y Combinator alumni.

    Here are a couple of the Y Combinator Winter 15 startups we've had our eye on:

    • Campus Job.Founded by former Googler Liz Wessel, this startup is a marketplace for college kids looking for internships and jobs. About 90% of the positions offered on Campus Job are paid.

    • Magic. This text messaging-based concierge service takes the on-demand economy to the next level. Instead of having its own app, you text a phone number that gives you 24/7 access to 'anything you want as long as it's not illegal.' 

    On Sunday, Anonymous Twitter persona and tech pundit Startup L. Jackson posted an open letter to YC founders in advance of Demo Day.

    He offers a few pieces of advice to founders of startups that are about to pitch their companies to an audience that includes potential investors: Know what your Series A round needs to look like, and raise the right-sized round. Founders should vet VCs like they're going to be employees. Have a backup plan. Don't optimize for ego.

    "You’re about to raise the most important money your company will ever take," he says. "It has the more potential than any other financing to kill your company if done poorly. And done well, will give you the resources and support you need to grow your business."

    There's no official list of companies since Demo Day has yet to happen, but Andrew Torba, the CEO of a Y Combinator W15 startup called Kuhcoon, has put together a Product Hunt list previewing some of the companies to look out for today at Demo Day.

    Here they are:

    y combinator w15y combinator w15y combinator w15y combinator w15y combinator w15y combinator w15y combinator w15y combinator w15

    SEE ALSO: Four Startups From Techstars Demo Day 2014 You Need To Know

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    y combinator demo day

    It’s YC fundraising season and the perennial discussion about valuations has begun. It’s frankly kinda tired. Smart investors will do fine investing in YC companies at “exorbitant” pricing, and crappy investors will lose money, probably at any price. The end.

    That said, there’s a perennial problem that is worth discussing, which is how founders should go about raising their seed rounds in a feeding frenzy environment, which YC Demo Days clearly are. This is some free advice for YC founders. You’re about to raise the most important money your company will ever take. It has the more potential than any other financing to kill your company if done poorly. And done well, will give you the resources and support you need to grow your business.

    Note: I have no idea what advice YC gives founders on fundraising. They run a great program, are smart folks, and the few companies I am aware of in the current batch are very impressive. To the extent that some of their founders are not sophisticated fundraisers (or bad at anything else), it’s unfair to blame YC. This is a compilation of advice I’ve given founders (YC and not) over the years, not a critique of YC.

    Know What Your A Looks Like

    If you are a successful company, this is unlikely to be the last money you ever raise. Most of you probably plan to raise an A. The first question you should be asking yourself is what metrics you’ll need to do so.

    Determine which metrics you think you’ll be judged on at your A, e.g. revenue, unit economics, growth, etc. Guess at what you think “good” numbers are, and then share these with advisors and investors. You can’t have a good plan if you’re wrong about the goals.

    Now, figure out who you need on your team to get you there. Do you have them? Probably not. Budget to hire to fill out the team. Focus on investors and advisors who fill the gaps.

    What do you need for marketing? Do you need firm CACs by the A? If so, have you budgeted to figure them out? What is your marketing strategy? MIT super-nerds are often surprised how much Scotch it takes to get a BD deal done even in Silicon Valley.

    Next, figure out how long you think it’ll take you to get there. It’s hard to go fast for extended periods of time. Be realistic about that ski-slope graph you made in YC. It might not last for the next 24 months.

    Now, take your budget and pad it by 50%. Shit happens, particularly in startups.

    Once you’ve completed this exercise you can go to investors and say “We see our Series A happening in X months, when we hit Y metrics. We believe we need Z dollars to hire A-C, grow with D strategy.” This turns out to be a great way to figure out if investors are smart. Good ones will help you build a better plan and you’ll be better for it. Bad ones will have poor feedback or just ask you where to send the check.

    Raise the Right Sized Round

    Broadly speaking, the biggest mistake investors make is overemphasizing valuation in hypergrowth investments. 100x vs 500x are all the same. The biggest mistake founders make is optimizing for dilution.

    I OH a YC founder at a cafe last week talking about raising $500k on $10M. While $500k may be enough to make progress, if you’re raising above $10M in the A round, you’ll probably need some decent metrics. If you can get there in $500k you are an outlier. This company is probably fucking up.

    The most likely scenario is that this company will need to raise again, and probably soon. It won’t always be as easy or fast as Demo Day fundraising. Raise enough that if things go well you can get to the A.

    Money is easy today and valuations are high. It may not always be this way. Raise enough that your business is “real” by the time you have six months or less of cash. What that means will depend on your business, but you will never again be able to raise on a dream. The worst possible thing you can do to your business is raise just enough money to throw up mediocre metrics right around the next round, especially with a high valuation you can’t back off of.

    Hire VCs Like Employees

    Ask your investors how they invest. Do they follow on? What are their expectation for the A? If you raise a second seed, do they want to participate in that? Make sure their goals align with your plans.

    You won’t have a problem raising money, but raising money that comes with good people attached takes a lot of time. If you take three days so you can “get back to work” you should expand your definition of work.

    The one structural criticism I have of the YC process is the mandate (so I hear) to founders to actively avoid talking to investors until right before Demo Day. I’d recommend (hi Sam) they amend this to avoid taking money until that window. I assume this mandate comes from a desire to see the companies building product, and that’s a great sentiment, but it puts you as a founder in a position where you have to make decisions on your team (VCs) very quickly.

    Founders should vet VCs over weeks or months. Ideally you’d interview them, check references, and even get some free labor out of them as you’re getting to know one another. If you take checks after a half hour call with a VC one of you is making a bad decision, it’s just not clear who.

    You deserve the VCs you hire.

    Plan B

    Think about what will happen if things don’t go well and how you’ll raise additional capital. Consider raising from investors who will follow on if you need more money to get to an A. New investors, angels, and unsophisticated folks will usually rather invest in the new shiny shiny than stick with you. Investors you have built a relationship with who can see past the metrics and are willing to double down because the believe in you are an underappreciated asset.

    Post Demo Day, make sure you’re asking your VCs for help regularly and working with them. They are usually smart people (or you fucked up hiring, see above), and free labor. The startup that treats their investors like a bank and only calls when they run out of cash is missing opportunities.


    Advisory Shares - Advisory shares are bull shit. All investors should be value add. If the price is wrong, fix it. The bar for advisory shares should be very high and probably you shouldn’t be using them with investors.

    Dilution - Most startup outcomes are binary. Optimizing for the size of your slice is almost never a good idea if the pie is big. Raise enough to bake a big pie.

    Ego - It’s tough to raise at $6M when all your peers are raising at $12m+. But not all companies are at the same stage and not all companies are worth $12M at Demo Day. The founders that optimize for ego end up hurting when they can’t raise or when they do get $500k at $12M and then can’t raise again in 12 months.

    Value Add - Everybody says they’re the best. Press VCs on specific things they will do for you. Make sure you understand where they fit in. Maybe try a variant on the Handshake Protocol.


    If you found this post helpful, please send me advisory shares via the blockchain. I’m sure there’s a company in the batch that can help with that.

    SEE ALSO: 18 mistakes that will kill your startup

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    Sean Rad Tinder

    Tinder is on a tear. Founded less than three years ago, the dating app has facilitated more than 6 billion matches between users — many of whom end up getting married.

    Those are a few of the insights from Sean Rad’s Reddit AMA on Thursday, during which the Tinder founder explained how his startup has become so successful.

    The AMA took place just one day before Rad officially stepped down from the CEO role at Tinder. Recode reported today that former eBay exec Chris Payne will take over as CEO, five months after Tinder began looking for a new leader. Rad will stay with the company as president.

    Rad answered several questions on Thursday from Reddit users. Here’s what the founder had to say when asked about Tinder’s origination, and its progress:

    We started Tinder years ago because we had this obsession with breaking down the barriers in meeting people around you. We noticed that people grew closer to their small groups of friends but grew farther apart from the rest of the world in the process. We knew that if we could simply take the fear out of meeting someone, that we could bring the people closer together. And we’ve done just that (although internally we feel like we’ve only accomplished 1% of what we set out to do)… Tinder is a dominant platform in over 140 countries where we have created over 6 billion matches (26 million new ones every day). That’s 6 billion potential connections that would likely never have existed before Tinder; each one having the potential to change someone’s life forever.

    Rad also addressed Tinder Plus, the new $9.99 version of Tinder released earlier this month that lets users “rewind” and give someone another look, as well as a feature called “Passport” that unlocks your location and lets you look for potential mates in locales you might be visiting soon.

    Months of testing and thought went into the feature and price mix for Tinder Plus. We tested a broad range of prices and found that users that saw value in Tinder Plus were more than willing to pay at the existing price points. Rewind and Passport were the two most requested features, but of course we’re going to introduce more features to Tinder Plus, we’re just getting started.

    tinder11Here are a few more answers from Rad:

    Reddit: The bio portion of Tinder profiles is restricted to 500 characters. What is the reasoning behind setting such tight restrictions? What is the value that you see in profile brevity?

    Rad: “After you match, Tinder requires you to be social and get to know your matches through conversation. It’s like real life… You don’t walk into a bar with a resume. EDIT: I mean, unless you’re applying to be a bartender ;)”

    Reddit: What was the design impetus behind Tinder’s Swipe? Did you consider/test any other command gestures?

    Rad: “I’m going to pass it over to Johnny Badeen to answer this one. I often tell him that creating the swipe could be the peak of his achievements and it all goes downhill from here haha:

    The first version of Tinder didn’t actually have the swipe in the app. I snuck it in a few weeks later and told everybody after it was released that they could swipe. The swipe was born out a desire to mimic real life interactions with a card stack. When organizing cards you put them into piles. Swiping right fittingly throws the card in the direction of the matches. We’ve strived for simplicity by keeping buttons but we’re always looking for fun shortcuts in terms of interaction. The swipe just made sense in this case and seems stupid simple in retrospect.”

    tinder12Reddit: What were some names you had in mind before deciding on Tinder?

    Rad: “The original name was going to be Matchbox. So happy we decided on Tinder.”

    Reddit: What other ways do you see people using Tinder, aside from romantic relations?

    Rad: “Many users already specify their different intentions for using Tinder on their profile – eg. I’m visiting Paris and want recommendations on places to visit. Internally, we call this “hacking Tinder.” At the core we’re making it really easy to connect with new people by breaking down the hesitation in walking up to someone and saying ‘hi’. Tinder’s solution can be applied in so many ways.”

    Reddit: Since Tinder is based on mutual physical attraction do you ever worry people’s feelings will get hurt?

    Rad: “When you like someone on Tinder, they won’t know that you liked them until they like you back, which removes potential feelings of rejection. We call this the “double opt-in”. Even if you don’t match with another user, there’s no certainty that they saw your profile.”

    Reddit: How do you motivate yourself?

    Rad: “Knowing that we are transforming millions of lives is all the motivation I need. I’ve been invited to more Tinder weddings than I could attend in a lifetime :)”

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    Jon Ricci Lansdowne Bandcamp

    Fresh out of Babson College, I did what any smart finance major would do – I started a rock band.

    I founded Lansdowne, a Boston-based country-rock band, and I treat it like the business that it is. Like any creative startup founder, I'm perfecting my product so people will consume and evangelize it. I'm de-risking my business and I'm looking for funding sources to grow and sustain it.

    Lansdowne has played more than 1,000 shows across the world including a wartime tour of the Middle East, honoring our troops in Afghanistan and Kuwait. We've released four albums, and I have been fortunate enough to hear my songs played on the radio and see them rack up millions of streams.

    Of course, what you don’t see on "Behind the Music" are the countless nights sleeping on couches, three square meals of ramen and the self-imposed poverty that comes along with trying to “make it.” 

    Sound like anyone you know?

    Record labels and VC firms are both like banks with networks.

    Every entrepreneur pays the same price as a starving musician. From the adrenaline to the self doubt, quitting a dozen times in your head before coming back for more, every new development is perceived as the big break.

    Just like a high-tech founder obsessed with raising capital, I thought signing with a record label would be our first break. As it turns out, it wasn't. Here's what we learned:

    1. Both record labels and VC firms are like banks that have networks.
    2. Both are going to expect a significant return on their money.
    3. Partnering with either before you are ready will ensure failure.

    When Lansdowne launched, we saw offers from more than one record label. America's Got Talent came calling, too. We turned them down, opting instead to become an S-Corp and raise angel investment.

    Crazy? Probably. But Lansdowne wasn’t ready for that kind of cash or attention; we hadn’t put in our 10,000 hours and taking too much too quickly would have turned roadblocks into cliffs.

    Startup marketing: Here's Lansdowne's press photo. The author appears center in aviators and a white shirt.

    The main problem with those early deals was that the terms were not advantageous to the band’s long-term growth. While the influx of capital and resources would have allowed us to grow more quickly, we did not have enough brand equity to negotiate. Oftentimes, a take-it-or-leave-it deal can do more harm than good, and handicap your ability to raise subsequent rounds with better terms. Recognizing this required a great deal of self control.

    We've treated our band like a startup. But you can also treat your startup like a band.

    Instead, we sought out angels that had a passion for music. We found three who were fans of the group, and raised a small round in the form of a convertible note. With these funds, Lansdowne invested in things that enhanced our ability to expand our product offering and fan base--van, trailer, instruments, albums, strategic tour buy-ons. That enabled revenue streams like music sales, merchandising and sponsorship, creating a product mix that quickly increased our margins and decreased our need for additional capital.

    Personally, I'm now putting a decade of live event experience to work as the founder of Prechorus, a stealthy, cloud-based logistics collaboration platform for live-music professionals. Our partners include the Nashville branch of Street Smart Management and Cambridge's own Middle East Club.

    We've treated our band like a startup. But you can also treat your startup like a band:

    1. Take the hit song that's playing in your head and give it structure. Every marketable song has a structure, and so does every startup idea. Like verse-prechorus-chorus-bridge, tech startups go from customers' pain point, to value proposition, to defensible solution and go-to-market.
    2. Build an audience and empower them to expand your fan base. I once left a voicemail for a fan’s daughter because she couldn’t make it to the show. Next time we were in town, she brought all of her friends out. From the garage to the Garden, your customers make you great. Give them all of you, be accessible, and enable their experience to expand your network effect. Live for the people consuming your art.
    3. Don’t be an asshole. The world is small and getting smaller. The person who said, “no,” might know another who will say, "yes." Every interaction matters. Being negative is just going to make you bitter and ruin the journey.

    Music is like any other industry: Through shaping your product with the consumer in mind, providing an incredible user experience and maintaining a positive attitude, you give yourself the best shot at being ready to take advantage of funding opportunities that come your way.

    One final key to our success has been the ability to make changes without losing the focus of our core business. Lansdowne’s reason to exist has always been producing an energy-packed live show that make our fans feel like family. Like a startup going to market with its first offering, we started with one type of music in mind. That's changed over time. Anticipating and executing multiple pivots has allowed the band to continue growing its fan base from an emerging Boston act into a global brand.

    Jon Ricci can be reached at

    SEE ALSO: 18 mistakes that will kill your startup

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    Yesterday, the New York Times published some interesting statistics about retirement funds investing in big privately held tech companies — including so-called "unicorns" with billion-dollar-plus valuations, like Pinterest, Uber, and Airbnb.

    According to the Times, mutual funds run by firms like like Black Rock, Fidelity, and T Rowe Price made 29 deals to invest in private companies last year, worth $4.7 billion. That's up 16x from 2012, when only six such deals totaling $296 million were made.

    These companies seem like riskier bets than companies traded on public markets.

    Their books are generally closed. Valuations are determined by agreement between investors and the companies, not by the real-time market actions of millions of investors. There's a real isk that these companies will never go public, or will be acquired for less than they're worth now.

    Fortune's Dan Primack says there's no reason for retirees to panic. He points out that these investments are still a tiny percentage of the overall retirement funds' investments — about 0.3% in the case of Fidelity's Contrafund — and the only one with any exposure is a high-risk fund from T Rowe Price which was built specifically to invest in these kinds of startups.

    But it's also notable that these investment firms have little choice. There's a desperate search for high-yield investments going on right now in the investment community. Bonds aren't cutting it. The public stock market has been choppy. 

    Tech is typically a higher-risk higher-growth investment, but a lot of the fastest growing tech companies are staying private for longer than they used to.

    For instance, when Microsoft went public in 1986, its revenue was $196 million — that's $417 million in today's dollars.

    By way of comparison, Facebook's revenue when it filed its IPO in 2012 was $3.7 billion. Uber is expected to book more than $2 billion in net revenue (that's total revenue minus payments to drivers) this year.

    There are a number of reasons why big companies like this are staying private, but a lot of investors and execs blame regulations like Sarbanes-Oxley, which require public companies to deal with more red tape than they used to. Other folks, like investor Keith Rabois, say this is basically an excuse and founders just don't want the kind of scrutiny that successful public companies have.

    Regardless, investors are apparently willing to take slightly riskier bets to hit their funds' targets. Those bets increasingly include big, fast-growing, privately held tech companies. 


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    Dennis Crowley

    The following piece by Dennis Crowley, Founder and CEO of Foursquare, originally appeared on Medium.

    By now I’m hoping you saw the news from Twitter about Foursquare powering location-tagging in tweets.

    This is a big deal for Foursquare — not just because we all love Twitter and we’re psyched to be a part of what they’re building, but because it’s yet another example of how ubiquitous the Foursquare platform is becoming — this "location layer of the internet" you've probably heard us talk about.

    As CEO, I spend a lot of my time talking to people about our company and telling the story of what we’re building and where we’re going. I’m always surprised to hear when people in the industry think of us solely as app developers — “you’re the company that makes Foursquare and Swarm!”

    Well, yes, that’s true. We’ve built these two great apps that millions of people around the world use (50+ million every month across our two apps, our website and mobile web). But the real interesting part of the Foursquare story is all the technology we’ve had to build so that, say, the Foursquare app can ping you to suggest a sandwich shop you’d love as you walk through a neighborhood for the first time, or so the Swarm app can automatically “snap” you to the place we know you’re about to check in to. There’s a reason that we’re one of the only companies doing proactive and predictive local search and firing off contextual notifications — it’s hard. And we’re one of the few companies on the planet with the team, technology, and data to pull it off.

    I know the history of our company is rooted in the check-in (and all the fun things we did to encourage people to press that “check-in” button), but remember, the big idea was never “build the world’s best check-in button.”The big idea was to create a system that could crawl the world with people in the same way Google crawls web pages with machines. To then put all of what we’ve learned to use in helping people find the best and most interesting experiences in the real world. And to build a company that would bring our vision of context-aware services — software that can learn about the places you’ve been and can proactively recommend places you’d love — to hundreds of millions of people.

    foursquareAnd this is what we’ve been up to these last six years. Your 7 billion checkins have taught us about more than 65,000,000 places that exist in the world. The 250,000,000 photos and 70,000,000 tips you’ve left have shown us what’s great inside those places. The 90,000,000 “tastes” you’ve added to your profiles have taught us about the things you want us to help you find. The hundreds of millions of API calls we get per day from the 85,000 partners building on our platform contribute the freshness of the data and our popularity scores for places.

    In addition to building the world’s most accurate place database, we’ve learned how to see buildings the way our phones see them — as shapes and sensor readings on the ground rather than boxes viewed from space. We’ve built software that can understand when people move through, stop within, and then move on from these shapes — whether the shapes are places, neighborhoods or cities. And we’ve built search and recommendation algorithms that get smarter as they learn about the shapes you choose to spend time in and the shapes you simply pass through. You’ll hear us talk about these things as “stop detection,” “snap-to-place,” “the Pilgrim engine” — they’re the pieces that make us confident that no matter where you’re standing in the world — whether it’s your own neighborhood or a far-away city you’re visiting for the first time — we can raise your awareness of the best experiences nearby and help you find places you’ll love.

    When we first started Foursquare in early 2009, there were no great location APIs to build off of (trust us, we looked everywhere)… and so we made our own. Since those early days, our place database has been (and continues to be) created and maintained by our user community. And because of that, we always thought our crowd-sourced place database should be open to other developers to build on, if only to save them from the messy work of having to build their own. What started with our first APIs in the summer of 2009 has evolved into a location platform which more than 85,000 different companies and apps now rely on (up over 30% from last year!). That includes companies like Microsoft (where Foursquare helps power location search for the Cortana personal assistant and Bing’s local search) and companies like Pinterest, Waze, Flickr, Samsung, Citymapper, and thousands of others. Starting today, it also includes our friends at Twitter, so that the 500+ million tweets they see daily can have location context, too.

    I’m very excited about sharing today’s news, because I think it allows us to show a different side to a company that you think you already know. I look forward to sharing some of the other things the team here has been hard at work cooking up (stay tuned!). It’s always been clear to us that the future of mobile + local is predictive, proactive and personalized — a piece of software in your pocket (or on your wrist!) that’s always working to make sure you know about the most interesting things nearby. Every few months we get a little closer, and even after six years, we’re still just getting started…

    SEE ALSO: 18 mistakes that will kill your startup

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    Is your job killing you?

    According to death statistics from 2011 compiled by the CDC, the top three killers in the United States are heart disease, cancer and chronic lower respiratory diseases like emphysema. Collectively these diseases killed 1,316,211 Americans that year.

    Far too many of these deaths were preventable. It’s no secret that regular exercise and a good diet can dramatically reduce rates of heart disease. Nonetheless, nearly 80 percent of American adults don’t get the recommended amount of exercise each week (2.5 hours of moderate aerobic activity or 1 hour and 15 minutes of vigorous activity).

    Given how critical fitness is to overall health, I think it’s worth taking a look at exercise in the one place where nearly all of us will spend a good chunk of our lives: the workplace. My observations are anecdotal — pulled from experiences in my own company — but I think the lessons learned can apply more broadly.

    In my office — we’re a tech company with around 700 employees focused on social media — exercise before, during and after working hours is encouraged. When we moved into a new headquarters several years ago, we installed a small gym and yoga room, as well as showers and changing rooms. Facilities are modest compared to those at some companies, but they’re well used. Yoga classes are packed before work, at lunch and after work. In the gym, volunteers from our company lead sweaty bootcamps and cross-training classes. Groups set out from our office for lunchtime runs and evening hikes. We have a hockey team and a road biking team and even a Quidditch team that does battle on broomsticks in the park.

    But, when it comes to promoting fitness on the job, dedicated facilities and organized teams like these are hardly necessities. Having the right workplace culture is far more important. Back in the day, in our cramped startup offices on the industrial side of town, we couldn’t afford a gym (in fact, we couldn’t even afford phones). But we did hang a fingerboard on the wall for pull-ups. We brought in yoga balls for chairs. We encouraged employees to bike to work, even though that meant cramming our office entryway full of bikes because it was too sketchy to park outside. And we made it clear that anyone could block off an hour for exercise during the day, provided it didn’t conflict with meetings and they made up the time (by having lunch at their desks, for instance).

    yoga class

    I’m picturing old-school managers out there rolling their eyes. The manager’s job, after all, is to get results out of employees, not keep them fit. But even on a ruthlessly practical level, allowing and encouraging employees to exercise at work makes good sense. I see employees return from workouts refreshed and better focused on their jobs. Time lost on exercise is made back and more in terms of improved productivity. There’s some research to back this up. A study presented to the American College of Sports Medicine, for instance, found that workers who spent 30–60 minutes at lunch exercising reported an average performance boost of 15 percent. Sixty percent of employees said their time management skills, mental performance and ability to meet deadlines improved on the days they exercised. Workers in the study were less likely to suffer from post-lunch energy dips after exercising and also reported improvements in mood.

    Then there are the longer-term benefits to keep in mind. Healthy, active employees take fewer sick days and bring more energy to the workplace. A 2011 study published in the Journal of Occupational & Environmental Medicine showed that incorporating just 2.5 hours of exercise per week into the workday led to a noticeable reduction in absences. Perhaps most importantly, fit and healthy workers are less prone to exactly the kinds of preventable, debilitating illnesses that take such a heavy toll on families and on society.

    fitness workout

    As a personal aside, I don’t think I could have steered my company to where it is now without regular exercise. Over the past six years, we’ve grown from seven employees to a global operation with offices around the world. It’s been a fun ride but not exactly the smoothest one. In the beginning, I was responsible for everything from marketing and HR to sales, product development and finance, often working 16-hour days for weeks at a stretch. Later came the stresses involved with scaling a tiny company into a worldwide operation, adding dozens of new employees a week and outgrowing offices every few months. For an entrepreneur, of course, these are all good problems to have. But I wouldn’t have been able to maintain composure and focus in the midst of this chaos without taking at least a little time each day for exercise and, in particular, for yoga.

    Growing up, I had always been active — playing lots of ultimate frisbee, mountain climbing and cycling. But right at the time that Hootsuite was ramping up, back injuries caught up with me. I turned to yoga as a way to strengthen my core and give my body time to heal. But I quickly discovered that the physical benefits were easily matched by the mental benefits. Yoga is literally a moving meditation. It gave me time to clear my head, unpack the volumes of new information I was absorbing each day and then come back with a new, clearer perspective on the problems at hand. On top of that, it’s a great workout.

    UFC workout boxing gym exercise pumpedAt the end of the day, however, it’s not the type of exercise that matters so much as providing a space in the workplace where fitness can thrive. There’s a saying that couples who sweat together stay together. I think it’s just as true that companies that sweat together stay together. Over the years, the culture of fitness in our office has grown with the enthusiasm of new employees and taken on a life of its own. Today, our staff include ultramarathoners who run 50 miles at a stretch, elite cyclists and triathletes, personal trainers, avid rowers and sailors, yogis and hardcore hikers and, of course, lots of people like me who just like a good workout from time to time.

    Exercise in the office isn’t a new idea. But it’s such a clear win-win — in terms of health, morale and productivity — that I think it deserves to be put in the spotlight once more. Considering how pervasive heart disease and other preventable illnesses are, it’s not an exaggeration to say that our future — as healthy individuals, healthy companies and healthy societies — may depend on it.

    SEE ALSO: 18 mistakes that will kill your startup

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    ben silbermann PinterestLast week, Pinterest made a huge change to how startup employees collect equity, Fortune's Dan Primack reports.

    Now, the digital pinboard company will let former employees who have been at the company at least two years retain their vested stock options for an additional seven years without exercising them.

    This is unprecedented for startups and could be a huge boon to startup employees if other big private companies follow suit. 

    Here's why:

    Typically, startup employees give up higher salaries in favor of taking stock options.

    The hope here is that when the startup they work for gets super successful, those stock options will be worth more than their lost salary and the employees will cash in on their company's success as it grows.

    But there's a catch: If an employee leaves the company, the company usually gives them 90 days to exercise those options. That means the employee has to buy the options at the "strike price"— the stock price at the time when the options were granted.

    The employee may also have to pay taxes on the value of the exercised options. (This gets confusing, as there are different kinds of options, and some of those taxes can sometimes be refunded in later years — read up on the Alternative Minimum Tax and incentive stock options if you're interested in the details.)

    If the company is public this isn't a huge problem. The employee can just sell some newly exercised shares at the market price — which is presumably higher than the strike price (or the shares aren't worth exercising) — then take that money and use it to buy the rest of the shares and pay taxes.

    So, for instance, if the employee is granted 10,000 shares, they might be able to sell 1,000 to pay for exercising those shares and 500 for the tax bill, and still end up with a nice 8,500 shares.

    But what if the company's still private, as is increasingly the case with the hottest tech companies?

    Then, unless the company is willing to buy back those shares, or willing to let the employee sell them on the secondary market, the employee has to pay cash, up front, to exercise those shares. Then, the employee has to pay more to the IRS.

    Usually, companies give employees a short window to exercise — something like 60 or 90 days. If you're too cash-strapped to buy those shares and pay taxes during that window, too bad. No stock for you, no matter how long you were at the company and many options you were granted. 

    Pinterest is giving employees a much longer time — 7 years — to come up with the money to buy un exercised options. That effectively makes those options a lot more valuable as compensation, as nearly every employee will be able to exercise them — especially if the company goes public during that time, and employees can sell some shares to cover the cost of exercising them.

    If other companies follow suit, this could change the entire landscape for startups, making it easier for them to attract and retain employees.

    Just last week, Pinterest raised an additional $367 million at a at an $11 billion valuation. In total, Pinterest has raised $1.1 billion.


    SEE ALSO: Broken cap tables — why startups aren't tracking stock ownership properly

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    fred wilsonUnion Square Ventures' Fred Wilson has one simple principle when it comes to how much money startups should raise: less is more.

    Mark Suster, a partner at Los Angeles-based VC firm Upfront Ventures, interviewed Wilson about how much money a company needs to raise to be successful. 

    "I just think if you're forced to figure out how to get from here to here on a million bucks, if you're good, you'll figure out how to do it," Wilson said.

    Here's Wilson's advice to small companies that are just launching: startups should raise 12 months of capital at the seed round, 18 months' worth of capital at the Series A and B rounds, and for Series C rounds and beyond, raise 24 months of capital or more.

    "I think there are some instances where you need a lot of capital to execute a business plan, but in many cases it's not true," he said.

    Too much funding can have a bad effect on the decision making process, Wilson says. 

    "But because lots of capital is available, the company takes on the capital and then that ends up resulting in no constraints on decision-making, and so a company decides to do five things instead of one, and they do five things poorly instead of one thing well."

    In fact, Wilson says too much money can be a bad thing for a really young company. 

    "A seed that gives a company four years of runway, what does that say? It means the people raising the money don't think they're going to make it in a year," he says. "It's a bad signal that an entrepreneur would be willing to take four years of dilution when what they really should do is take a year of dilution and then in a year increase their value 3x. It means they don't know what they're doing, or that they don't have confidence that what they're doing is going to work."

    You can watch the full video below:

    SEE ALSO: One of the smartest VCs of all time says Silicon Valley is in a risk bubble

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    michael moritzMichael Moritz, the chairman of Silicon Valley VC firm Sequoia Capital, has a warning for Silicon Valley.

    "There are a whole bunch of crazy little companies that will disappear. There are a considerable number of unicorns that will become extinct," Moritz said in an interview with The Times of London. "There are also a good number that will flourish."

    A "unicorn" is a term used to describe a startup worth $1 billion or more. Like the fictional animal, unicorn companies are traditionally rare (and magical).

    Recently though, Silicon Valley has seen a surge in the number of companies with valuations of $10 billion or more, leading Bloomberg Business to christen these companies as "decacorns." 

    “Several years ago the atmosphere wasn’t as euphoric as it is today. Even the zaniest ideas can attract money,” Moritz, who was in early investor in companies like Google and Yahoo, told The Times of London. “The valuations are very sporty for absolutely everything. There are some companies that don’t deserve the valuations they have."

    Other investors have echoed Moritz's warnings. Benchmark Capital partner Bill Gurley has sounded the alarm several times, warning of a tech bubble mirroring that of the late 90s. He says people are happily working at startups that may be losing millions of dollars a year because the industry is very optimistic. "I do think you'll see some dead unicorns this year," Gurley said at a SXSW keynote.

    While Moritz predicts there “undoubtedly will be some sort of setback” in Silicon Valley tech, it won't be as bad as the last tech bubble simply because companies today are more sustainable.

    “Back then you had companies with fly-by-night business models or fly-by-night pretensions,” he said. “There are some of those today, but when you scratch and peer beneath the surface, most companies are secure and have sustainable business models.”

    SEE ALSO: Welcome to year 11 of people worrying about a tech bubble

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    Y Combinator President Sam Altman

    Sam Altman, the president of top startup incubator Y Combinator, isn't shy of voicing his opinion when it comes the current market's outsized valuations and high cash burn rates.

    On Monday, at Demo Day, Y Combinator's big startup pitching event, Altman reiterated his concerns over these issues.

    "I don't think founders have to take lesser valuations — their valuations are very, very high," Altman told Business Insider.

    "But I don't think it's necessarily good when companies are able to raise money at very high valuations, or raise lots and lots of money."

    Altman said it's particularly important for startups in their early stage to first establish a culture that works well before taking on too much money, which he says could potentially have adverse effects.

    "The market is the market, and I can't stop that. But the track record of companies that raise huge amounts of money at a huge valuation as their first round, like Color or Clinkle, is not good," he said. "The culture gets messed up."

    Altman has a point with those two startups. Color started off as a photo-sharing app that raised $41 million in 2011 before adding a single user — but the product was confusing, and after a few pivots, the company sold to Apple without ever releasing a hit product. Clinkle was supposed to be a payment app that raised $30 million in early fund that went through all kinds of changes before launching a confusing and scaled-down service late last year.

    "Frugality is sometimes incredibly important for startups. I think there's a long history of this working well with the focusing effect of limited resources," Altman added.

    And if you look at some of the most successful startups to come out of Y Combinator, they all took small seed rounds before raising huge rounds later on. Dropbox, now worth over $10 billion, only took $1.2 million in seed money and $6 million in its Series A. Airbnb, another $10 billion-plus company out of YC, had only $600,000 in seed funding, before raising $7.2 million for its Series A.

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