Startups I’d Fund #4

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Inertia Systems is built for largest construction projects in the most demanding environments, Project Inertia enables on-time & on-budget management – planning to delivery – of your most complex construction projects. Currently in use on projects totaling more than $10 billion, Project Inertia brings together fragmented pieces of the construction process to create efficiencies, identifying and addressing constraints before they have a negative impact on budget or schedule. By providing owners, design professionals, contractors, and jurisdictions a single unifying tool Project Inertia enables teams to build faster, with more control, clear oversight, real accountability and effective collaboration.

 

Last Funds Raised: Undisclosed Seed, May 2012

Company Actively Raising Capital

Headquarters: San Diego, California

 

What I Like:

  • Unique space and from my competitive analysis I don’t see too many other people in the space other than the large players BIM 360, Procore and PlanGrid.
  • I like the growing revenue and the constant flow of new clients. They also have reoccurring clients, which I like a lot because it shows that it was successful.
  • The valuation they are raising at is also in-line with SaaS multiples in the space at a roughly 10x ARR (annual recurring revenue).
  • The team has some done some great/notable projects in the past including working with universities like Stanford, Scripps and they have an upcoming project building the Rams stadium in LA, which has a budget of $2.6 billion.
  • The team seems to have experience in the space and in entrepreneurship, so it is good to see this is not their first startup.

 

What I Don’t Like:

  • The other competitors in the space have raised a lot more money and have a lot more reach in the industry. It may be hard for this company to gain clients when they are so much smaller.
  • The fact that the team has been actively trying to raise money and is having trouble makes me wonder why other investors have turned them down.
  • The pitch deck all seems very optimistic and it makes me wonder if all of it is true or if some of it is overly optimistic – such as their competitive advantages.

 

Conclusions:

  • I think there is a huge opportunity in the construction software space and this company seems to have strong traction while only using the founder’s capital. I really like the fact that they have put their own resources behind this endeavor.
  • I believe this company is definitely worth taking a look at and hearing more about from the founders to hear about their long term plan.

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Newzoo is the leading provider of market intelligence covering the global games, Esports, and mobile markets. It provides its clients with an extensive range of solutions, including consumer insights, device and app data, market sizing and forecasting, custom research, and bespoke advisory services. Newzoo works with many of the biggest global entertainment, technology, and media companies, along with many top consumer brands. Newzoo is headquartered in Amsterdam with offices in San Francisco and Shanghai and partner offices in six other cities around the world.

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Last Funds Raised: Undisclosed Seed, February 2016

Headquarters: Amsterdam, Netherlands

 

What I Like:

  • I believe there is a lot of potential in the Esports industry and think it will continue its upward trajectory of growth. I also think it will be around in perpetuity in some-form because video games have stayed relevant for so many years.
  • I like the way this company is playing the space by simply collecting data because this is what will be important for marketers and advertisers as they try to understand the space.
  • The company has been around since the beginning of the Esports industry, so they seem to have a strong understanding of how it works and what it will become.
  • The company has not raised a substantial amount of money yet and I think it would be beneficial to get into this company early because of its strong growth potential.
  • The founders have impressive backgrounds in the industry and are mature with experience, so it seems like the company would run smoothly through their leadership.

 

What I Don’t Like:

  • I can’t figure out what the ideal exit scenario for this company would be because at the end of the day they are a research firm with a unique specialization, but I wonder how big it could really become.
  • Competitors in the market research space could start collecting similar data and muscle them out of the industry because of their already strong client base.
  • Other than subscriptions and selling the reports for $6,900 I would be curious what other revenue streams the company is considering expanding into.

 

Conclusions:

  • I think there is a huge opportunity in the Esports industry and I believe this company would be a great entrée into investing in the space, not only because the company will grow in value as the industry grows, but it would give you access to the team’s expertise when evaluating other Esports investments.
  • My primary knock on the company would be their business model and how they plan to grow into a large standalone business making the potential reward worth the risk of investing.

 


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At UpCounsel we are on a mission to make the legal experience remarkable for businesses. If we were a law firm, we would be the fastest growing law firm in history. Our network of attorneys already makes up the largest virtual law firm in the world.

 

With UpCounsel, businesses can efficiently access and manage a high quality and on-demand legal workforce. Even though SMB’s currently spend over $100 billion on legal fees each year, they struggle to find quality and cost-effective legal services for critical business processes and decisions. We make the historically painful process of finding and managing legal services easy. Our customers love that they have an army of high quality lawyers at their fingertips with transparent billing and tools to make working them more efficient. It’s a remarkable legal experience.

 

Currently, large and small businesses alike use UpCounsel to supplement or replace their large law firms or traditional service providers. The rapidly growing UpCounsel community is made up of part-time, solo, and boutique attorneys who hail from global law firms, graduated from top law schools and/or have years of experience under their belt.

 

Last Funds Raised: $10M Series A, July 2015

Headquarters: San Francisco, California

 

What I Like:

  • I like the idea of adapting the antiquated industry of law to the 21st century with this unique approach to making lawyers more accessible.
  • This company reminds me of Healthtap which is the same idea, but for doctors. Healthtap has done well and I think that UpCounsel could reach the same level.
  • The company recently rolled out a new feature for 15-minute quick-calls which I think will help spark business by lowering initial cost and get people used to the service.
  • I like how the team is comprised of an engineer and a former entrepreneur/business attorney who has experience working on and counselling startups.
  • The company appears to have accrued a strong amount of lawyers in their network (half the puzzle), so I believe the strong network makes it an attractive product for potential users.
  • The company could eliminate a huge cost for small businesses by not needing to have a lawyer on retainer, so there is an immediate benefit to the bottom line.

 

What I Don’t Like:

  • Acquiring clients will be difficult because convincing businesses to get rid of the council they have had for a collection of miscellaneous lawyers on-demand is radically different and may not be worth the risk to some business owners.
  • The credibility of the lawyers may be hard to build with no company wanting to be the testing subject for a lawyer with no reviews.
  • The business model doesn’t seem to be fully concrete because of the variety of rates/services offered.

 

Conclusions:

  • The company has not raised money in nearly two years so the company might be doing well and not need new capital, which I believe would make it a good investment or it might be burning what it has left, however, this would be discovered easily after reviewing financials. Definitely worth checking out!
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