Investor Connect Podcast

In this episode, Hall welcomes Ben Jones of Skipcart. Skipcart is an on-demand last-mile delivery company. Retailers, grocers, and local businesses have the option to give their customers same day delivery by utilizing software and a crowdsourced community of drivers. Ben started out as an entrepreneur working on the service side for large companies before breaking out on his own. Skipcart grew out of the Amazon-Whole Foods acquisition, and the emerging space of grocery delivery.

 

Ben talks about the competition in the space, and the importance of solid technology and innovation to back up your last-mile delivery startup. Ben also discusses the effect of crowdsourcing and how it drives efficiencies in the space. Finally, Ben also touches on some of the challenges in the space, from getting drivers to adopt a gig-based income model, as well as software that maximizes the efficiency of route-planning to ensure drivers remain loyal to the company.

 

Direct download: Ben_Jones_of_Skipcart.mp3
Category: -- posted at: 2:20pm CST

When I look through my LinkedIn network these days it appears every fifth contact is a venture capitalist of one kind or another. When I started in the early stage funding world 20 years ago, the VC was a rare breed who had access to venture funding. Most of them were in a handful of tech clusters in the US - Silicon Valley, New York, and Boston to be exact and they were few and far between.

At that time, a typical VC had a $100M fund or greater which they raised from LPs or limited partners - primarily the pension funds. They operated in ten year funding cycles which means they could run a long ways off one good return. They charged 2% management fees and a 20% carry.

In the 2000s angels grew to prominence because the cost of starting a business came down so much, startups no longer needed $5M to start a web business but could now do the same thing for $500K. Angels became attractive financiers because they were more numerous and easier to access.  Today, MicroVC, NanoVC, Venture Studios and Corporate VCs are coming onto the startup scene with new fund sizes and funding models.

MicroVCs raise $25M to $50M fund while NanoVCs raise $10M to $15M funds.  Aside from the size of their fund, the main difference is that Micro and Nano VCs typically target a narrower criteria- either a specific geography or type of deal.  Many use the pledge-fund model which means each deal the VC wants to fund must go through a screening process by the limited partners.  

Because the fund size is small most MicroVCs are taking 3% in management fees and a 20% carry. Given the size of the fund, they can only invest in 5-10 deals. The fund lasts only a few years before it’s time to raise the next one.  They raise primarily from family offices and high net worth individuals.

Then there is the Venture Studio model. This type of VC essentially builds a team from which they launch a startup with an ecosystem of providers. This works well for one stripe zebra startups that provide niche products or services as they can tie into a bigger team with more resources.  

Finally, there is the strategic or corporate VC which seems to be popping up everywhere.  A venture fund provides a competitive advantage for burnishing the company’s brand and selling its product. They invest for strategic reasons rather than financial ones in most cases. 

Thank you for joining us for the Startup Espresso where we help startups and investors connect for funding.

Let’s go startup something today!

 

Direct download: Startup_Espresso_--_Everyone_is_a_VC.mp3
Category: -- posted at: 8:47pm CST

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