How VCs and founders see 2021 otherwise – .

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Venture capital gets less diverse in 2020 – TechCrunch

Welcome back to The . Exchange, a weekly newsletter for startups and markets. It's based largely on the daily column that appears on Extra Crunch, but it's free and designed for your weekend reading. Click here if you want it in your inbox every Saturday morning.

Ready? Let's talk about money, startups and hot IPO rumors.

We're creating a buzz this weekend in the newsletter, focusing on a number of bigger topics and news instead of a few discrete sections. Why? Because there was too much to fit into our usual format. If you were a fan of the original layout we'll come back to it next week.

Today we talk about Coinbase's growth, how Juked.gg tapped the stock crowdfunding market, a noodle or two in the a16z media game, Talkspace & # 39; s SPAC, VC and Founder predictions for 2021 and where the right place is to start a business.

Sounds good? Let's get started!

Coinbase's deposits will be scaled prior to going public

Thanks to Kazim Rizvi of Drop, Cardify's parent company, which provides consumer spending data, we can examine how quickly deposits have scaled on the American cryptocurrency platform Coinbase. With Coinbase filing for an IPO and looking forward to the eventual S-1 filing, we were thrilled to take a look at how quickly consumer interest in the assets it helps people purchase has grown.

They scale quickly. Using the first week of January 2019 as a basis, Coinbase's deposits and withdrawals had increased by more than 12 times each by the last week of December 2020. That's amazing growth, and while the data is a bit volatile from week to week – and we'd consider it direct rather than accurate – it underscores how well companies like Coinbase may do again if Bitcoin booms again in more trading interest and consumer demand .

Cardify data via Cardify.

The Cardify data also show a multiplication of new customer acquisition at Coinbase in the same period and a scaling of the deposits in addition to the Bitcoin price. With Bitcoin topping the $ 30,000 mark lately, significantly higher than in recent quarters, the price hikes may not only have given Coinbase a solid fourth quarter of 2020, but may well have set it off for a bonkers in the first Quarter of 2021.

If we were 10/10 enthusiastic about the Coinbase S-1 prior to this dataset, now we're a fucking 12/10.

Seven-digit equity crowdfunding for esports content

Esports is super cool and if you disagree you are wrong. However, it doesn't matter whether you or I are right or not, as the market has largely decided that competitive gaming is worth investors' time, attention and money.

The proliferation of esports leagues and games and the like has created a decidedly fragmented universe, but it lacks a central hub that matches what ESPN has to offer to the world of traditional sports.

But don't worry, Juked.gg has just raised funds to build a content hub for the sport. This means old folks like me can still find out when tournaments are happening and enjoy League of Legends or Starcraft 2 Pro when we can without searching the internet for dates and times.

Juked.gg has gone through 500 startups (more on its class here) and at the time stood out as a decent nexus for esports-related content. With just over $ 1 million raised on the Republic platform, the company has big plans.

The exchange spoke to Ben Goldhaber, co-founder and CEO of Juked.gg, about his company's performance to date. According to Goldhaber, Juked has scaled from 500 users when it was launched in late 2019 to 50,000 in December 2020. Up front, Juked may invest more in journalism, more in social functions, and more in user-generated content. We'll learn more about Juked as his vision is realized, which is now powered by over $ 1 million from 2,524 investors. Every bet that the startup will develop the right product to unify a growing, albeit dispersed, entertainment category.

The a16z media push

To keep our collective sanity, I won't go into long here, but building content in a VC firm isn't new. Hell, how long has it been since the first round review started? What a16z seems to have in mind differs in scale, not in substance. We talked about equity this week in case you need more on that.

Talkspace's maybe not stupid SPAC

While SPACs are fun to mock up with, with so many companies emerging to say the least, not all SPAC-led debuts are as goofy as the others. Such is the case with the upcoming Talkspace deal, the deck of which you can read here.

What matters is this series of charts:

Look at this! Historic sales growth! Improve gross margins! Growing gross profit!

You can argue that the company isn't really worth an enterprise value of $ 1.4 billion, which it got after combining it with Hudson Executive Investment Corp. will wear, but hey, at least it's a real deal.

How VCs and founders see differently in 2021

Seed VC NFX recently conducted a survey of VC and founders that I wanted to share with you. You can read the whole thing here if you want.

I have two excerpts for you this morning:

  1. VCs are more optimistic about business than founders. Around 30% of founders expect consumer spending to remain unchanged or decrease, positions that only around 17% of VCs agreed with.
  2. And when it comes to leaving the Bay Area – yes, that chestnut again – 35% of founders have itchy feet, while only 20% of investors are similarly inclined. I think that's because the latter have homes in the Bay Area while most of the founders don't. But it should mitigate the notion that all that money and talent is going away. You are not.

There is no place like no place

Initialized Capital has compiled some data that shows where founders think it's best to start a business. In 2020, almost 42% of the founders surveyed stated the Bay Area. By 2021, that number had dropped to just over 28%, with a large 42% indicating that a distributed business is the best way to go.

I hear a lot about this from early stage founders. They often build, as I call, multinational companies, small businesses that have a few employees in one country and a handful in another. Getting the setup up and running is going to be a hotspot for HR software in my opinion.

Regardless, the requirement to start businesses in the Bay Area is broken. The benefits of founding a company remain for much longer.

Come!

Next week on The Exchange: The first entries in our new $ 50 million ARR series with interviews with Assembly, SimpleNexus, Picsart, OwnBackup, and others. And we have $ 100 million worth of ARR interviews in the can too.

To keep The Powers That Be happy, The Exchange covered some nice things this week including American VC results, fintech and unicorn venture capital, European and Asian venture capital results, how the IPO market is even crazier than you thought . and hints of what Qualtrics can be worth when it goes public.

Hugs and let's all take a nap

Alex