Batch 1: The Seeds (Where I Would Invest)

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Vugo displays relevant, real-time ads inside rideshare vehicles that use apps like Uber and Lyft to connect riders to drivers. Ads are displayed after a proprietary determination of the passenger’s trip intent and demographics are analyzed. Vugo then displays the most relevant advertisement to influence the passenger into taking valuable action. Vugo is an auction based platform that allows companies to compete in a transparent, real-time marketplace that benefits riders, advertisers and drivers. They pay drivers for their time, they help advertisers get the word out and riders discover great deals and new places.

Last Funds Raised: $200k Seed, June 2015

Headquarters: Minneapolis, Minnesota

 

What I Like:

  • I couldn’t find anyone else with as much traction as this company working in the specific space.
  • The company is based in Minnesota, so it probably isn’t drawing as many investors as it would be if it was based in CA/NY. It would also likely be cheaper to operate/staff.
  • The founding team includes an engineer/CTO who built out the platform. Another one of the founders previously worked in advertising and as an Uber driver part-time.
  • The company has survived over the last two years with only $200k of funding and recently won a 2016 award for its unique approach to the space.

 

What I Don’t Like:

  • None of the founders have any previous entrepreneurship experience.
  • It seems like this is something that ridesharing services could ban or just start doing themselves – however, Uber has specifically addressed Vugo and said it would not ban the use of the service, but they would discourage their drivers from using it.

 

Conclusions:

  • There was no lead in the Seed stage, all investors appeared to be friends, so it seems like an opportunity for a more established VC to come in and help grow the company.
  • There seems like a lot of additional opportunity for growth because I have not come across the company in San Francisco or New York Ubers/Lyfts.

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Molekule is the developer of an indoor air purifier based on molecular technology. The company’s technology, called Photo Electrochemical Oxidation or PECO, uses UV-A wavelength LED lights to simulate solar light which creates a chemical reaction on the filter’s surface. The filter takes bacteria, allergens, mold, chemicals and viruses, breaks them down into elements that aren’t harmful; then releases these elements back into the air.

Last Funds Raised: $3.25M Seed, May 2016

Headquarters: San Francisco, California

 

What I Like:

  • I have an air purifier, but I never have any idea what it is doing and if the air is actually clean. This is a product I believe most parents would buy for children and new parents will buy for their homes.
  • Strong partners including the EPA and Department of Defense.
  • The founding team is strong – comprised of technical and business founders with impressive resumes.
  • There is no hugely dominant competitor in the space, but there are a couple other companies doing similar things…No one has captured mainstream market.
  • Subscription business model of replacing the filter yearly for reoccurring revenue. It would also likely have a low attrition rate because there is a substantial initial cost.
  • They have continually sold out all their batches (now on batch five) and they are fulfilling orders based on their wait list.

 

What I Don’t Like:

  • It is very expensive at $799 for the unit and $99/year for replacement filters.
  • Not sure the industry is big enough for it to be disrupted and become hugely profitable.
  • Sales of the product would likely have to be driven by marketing and it may not be ideal knowing that all funded money will go directly to marketing.

 

Conclusions:

  • I think it could become the Sonos/Nest/Juicero/Eero type of go-to product for clean air.
  • The product has strong traction and historical sales, but it would be important to hear the founders vision for the company moving forward and what they think it can become.

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Pair is a provider of augmented reality (AR) visualization services. The company offers a markerless AR platform that gives architects, contractors and interior designers a tool to share and visualize 3D CAD designs with clients, investors and the public using mobile devices.

Last Funds Raised: $125k Seed, May 2016

Headquarters: San Francisco, California

 

What I Like:

  • I find the augmented reality space more attractive then virtual reality because it has more practical applications to people’s daily lives today. It also seems like a lot of people are overlooking this space and going right for virtual reality, when I think there is a lot of opportunity in augmented reality.
  • The company is taking an enterprise approach to augmented reality, rather than immediately targeting the consumer. I think it is a good idea to get brands onboard before going directly for consumers.
  • The founders are strong with both technical and business backgrounds.
  • The company recently emerged from 500 Startups accelerator Batch 17.
  • It is an early stage to be able to get exposure to a growing industry with a team that has proven itself competent.

 

What I Don’t Like:

  • Augmented reality is becoming a very crowded space with a ton of company’s trying to become the industry leader in the space.
  • The company did not get any investments immediately following the Demo Day at 500 startups in August 2016, so it makes me wonder – why?

 

Conclusions:

  • It would be a large gamble in the emerging space of augmented reality, but the team and background I believe make it a strong candidate.
  • I think it would be important to talk with the team, hear their pitch for their product and see how they plan to differentiate themselves.

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