“Series A Investors Look at Team, Technology, Market” 5 Lessons I Can Share About My Series A Venture Financing Round

Jean Ginzburg
Jun 3, 2018 · 4 min read
Peter Relan

I had the pleasure of interviewing Peter Relan, founder of YouWeb Incubator and sponsor of over 25 startups which have collectively raised over $200M in venture financing, and have generated over $2B in M&A or secondary exits.

Jean: What is your “backstory” of how you become involved in the Startup space.

Peter: I was a tech industry executive, VP of the Internet and Application Server Division at Oracle when I left for my start-up career first as a Head of Technology at Webvan from Series A through its IPO, then founded my own company in 2011 which raised a Series A in 2004 and was acquired in 2006, and then started YouWeb to become a “parallel entrepreneur”.

Jean: What do you think makes your company stand out?

Peter: My incubator is unique. Unlike others like YC, we work with a very few founders who may not even have an idea when they join us. For example, when Jason Citron, founder & CEO of Discord came to work with me in 2012, there was no clear idea, just a general white space he wanted to tackle. Today Discord is a household brand in the gaming community with over 100M registered users, and growing faster than Slack.

Jean: Are you working on any exciting projects now?

Peter: Currently I am CEO of Got It, which is an AI based platform that dramatically boosts user productivity by connecting a user to a vetted knowledge expert within seconds, when they have a problem they are stuck on, using business tools, programming and other knowledge work.

Jean: Do you have a favorite book that made a deep impact on your life?

Peter: Two books: Hard Drive on Bill Gates and Only the Paranoid Survive by Andy Grove. I took a class that Andy Grove taught when I was at Stanford. I was struck by management approach of Andy Grove (he did a column in the San Jose Mercury providing advice to how to manage employees, which I used to read regularly and use his ideas even today) and how strategic he was in his thinking about Intel and it’s future. In a case study we did in the class, I “dared” to answer a question, despite his withering look, and it turns out I nailed it, but he was so matter of fact: as if, “of course that’s it, and if you thought anything else you’d be stupid”.

Peter Relan

Jean: What are your “5 Lessons I Can Share About My Series A Venture Financing Round” and why?

Peter: With my incubator companies, I am usually co-raising the Series A round with the founder who has worked with me typically for 2 years (1 year in the incubator and then raised a seed round in the 2nd year). The biggest lesson I’ve learned doing this a number of times is that start-ups are so capital efficient now in the seed stage, that the bar for the Series A is very high. The seed round is supposed to be about having achieved traction, otherwise the Series A is unlikely to happen. Unless you are a successful serial entrepreneur the Series A will not happen on just a “business plan”. An example from my incubator is Discord, whose Series A happened just on the back of Jason Citron’s reputation (he had a $104M exit in his previous start-up which was also incubated at YouWeb). His Series A was led by Benchmark on a prototype product only. On the other hand, Got It, whose founder started the company in his college dorm while going his PhD, had never done a start-up, so we got a seed round and worked to show 40% MoM growth of his service usage that then led to a Series A.

Other lessons
Fundamentally series A investors look at team, technology, market (and related to that product market fit). You can have a big market, a technology not working yet, and a great tech team, and that might be enough to raise an A round, because the risk that a great tech team will not crack the tech is low, and the big market is very attractive.

Network effects: Investors love business models where there is a flywheel that might need a jump start with some capital, but then can become self-sustaining. Like marketplaces that can show “the more the buyers the more the sellers and thus the more the buyers etc..

Deep domain knowledge: If a founder has deep domain knowledge, like a doctor or surgeon doing a healthcare/medical device company, and they team with a solid team, this can be very attractive to investors.

A hot space or a challenger to a a first mover: Uber/Lyft, Doordash/Postmates etc.

Jean: Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. :-)

Peter: Barrack Obama.

— Published on June 1, 2018

This was very inspiring. Thank you so much for joining us!

Authority Magazine

Leadership Lessons from Authorities in Business, Film…

Jean Ginzburg

Written by

#1 best-selling author, serial entrepreneur, digital marketing expert, founder of JeanGinzburg.com

Authority Magazine

Leadership Lessons from Authorities in Business, Film, Sports and Tech. Authority Mag is devoted primarily to sharing interesting feature interviews of people who are authorities in their industry. We use interviews to draw out stories that are both empowering and actionable.

Jean Ginzburg

Written by

#1 best-selling author, serial entrepreneur, digital marketing expert, founder of JeanGinzburg.com

Authority Magazine

Leadership Lessons from Authorities in Business, Film, Sports and Tech. Authority Mag is devoted primarily to sharing interesting feature interviews of people who are authorities in their industry. We use interviews to draw out stories that are both empowering and actionable.

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