Village News – July 2022
The team and I have been head down doing the mahi. However, we are so excited to announce what we have been working on soon! In this month's Village News, we announce several NZ funding rounds, take you through the progress of our portfolio and share great resources like our new and improved termsheet template. I also did my first podcast appearance (was nervous)!
What we've been up to
When Rob founded Hillfarrance Venture Capital in February 2020, he wasn't just raising a new venture fund. He and Diana (his wife) also delivered their first son, Arthur, in the same month and found out they were pregnant with Jamesy four months later.
At the time, he couldn't tell you how many emotions and thoughts were running through his mind - excitement, trepidation, insane amounts of love - you name they had it. Perhaps the most common feeling was one of a deep desire to connect and learn from others in the same boat. But there was nothing...
Fast forward to early 2022, one of our awesome portfolio company founders, Rob Stirling (co-founder of Scannable and new Dad), told us about his idea for creating a community of Mums and Dads who also happen to be entrepreneurs and founders. He called it "Founderhood", and Rob was completely and utterly sold.
A few months later, after a bit of jiggery-pokery, we finally kicked off the first iteration of Founderhood with our dedicated Slack channel and soon-to-be-launched podcast. It is totally free to join, and you can sign up by clicking down below:
https://www.youtube.com/watch?v=GT91p1LyhiQ
Aside from the atrocious thumbnail they chose of me, it was my pleasure to be welcomed onto the Sutton Capital weekly web show! I had a great time chatting with Sutton Capital CEO Joel Palathinkal about:
How I broke into VC and my journey getting to Hillfarrance
How I closed my first LP for our fund
Hillfarrance and how we are unique
Sutton Capital is a global VC fund that invests in both startups and other VC funds. They also provide training and development for both General Partners and Limited Partners.
When we converted an old retail unit into our office, we had no idea what we would do with the front window. Then the solution became obvious - offer it to startups who want to show their products off for free! Yes, free.
If you or anyone you know have some nifty products that you want to promote on a busy street, here is how you take us up on the offer:
Make sure you have enough stuff to fill a 1500 x 1500 space
Send us a quick overview of what you want to display and some images - pitches@hillfarrance.com
We will make a selection and send the chosen startup an email with the next steps.
We will cycle the window displays every 30 days, and you will need to come and collect your bits and bobs and leave the area as you found it for the next startup. We already have secured August and September 2022's chosen products for display!
The river is pumping hard through Hillfarrance right now. We have:
Almost a half-dozen major up rounds taking place within our existing portfolio;
One new portfolio company closing in two weeks (cannot wait to announce this); and
A bunch more in late-stage DD.
We are working hard but loving it all the same (best job in the world). 🦾
Portfolio company updates
The platform that mobility is built on
Mobli’s gaining great momentum, and they're growing, too! Their leadership team has appointed a new senior leader to help guide them through their continuing growth and strengthen how they deliver excellence to Mobli’s customers.
It’s our pleasure to welcome Rebekah McShane ("Bekah") of Ngati Kahungunu to the role of Global Director of Operations! Bekah has had extensive experience in the operations space. Prior to Mobli, Bekah was the Chief Operating Officer at another local kiwi startup, Supergenerous, a platform that automated the claims and rebate process for donations. She has had an extensive tenure in the operations space, having also been customer success lead at Xero and an Operations Manager at both Armourguard Security and Toyota New Zealand.
Some of the new Mobli's at the welcoming party
Aside from Bekah, the Mobli bus is ever-growing! Check out our epic new Mobli's below!
Scannable removes paperwork and data entry from compliance and safety inspections for your safety equipment.
There can be some confusion when it comes to the differences between fall restraint, work positioning and fall arrest. Testing standards for harnesses differ depending on the application, which means it’s important to select the correct harness for the job.
Jess, Scannable’s resident level three rope tech and Safety Data Researcher, delves into which standard covers which application in their latest blog. Check it out below:
Bolster is the Shopify for Enterprise data and allows operators to find the data they want, when they want, on any device they want.
https://vimeo.com/731578073/17a15cc2c9
Supply chain fragility is one of the biggest challenges facing today’s and tomorrow’s economy. Here in NZ, alongside the rest of the planet, we are experiencing waits of over six months for some products or components to be delivered.
Part of the solution to tackling this is greater visibility into where your shipment is in the process so you can communicate better with your customers.
After six months of development and fresh off their $1m pre-seed round led by Hillfarrance, we are delighted to share the first demo from Bolster. Lovingly crafted by Guy Phillips, Steffen Merten, Becky Cassie, Conor Keegan and Robert Hochstedler, they are doing an AI-first business that correlates what we thought was uncorrelatable. All this is being done from the glorious Land of the Long White Cloud. 🇳🇿
Revolutionizing the world of insights with game-changing AI products
Yabble has just released a new feature! Trended data is live on the Yabble platform, which means the power to analyze and predict business patterns and adjust your strategy accordingly is now in your hands.
Yabble also provides awesome insights, tips, tricks and product exclusives from their newsletter.
mage credit: DALL.E mini by craiyon.com
Segna has just released its first Product Update!
In this update, they talk about all their product updates which include:
A pre-built file importer that is completely customisable;
Sign in with Google;
Sheet selection of Excel workbooks when you upload data; and
Safely edit and configure the cleaning of uploaded CSVs without any code.
Super excited to share this very early gameplay snippet with all of you! 🥳 Retweets are extremely appreciated, and helps us find more fans for the title. #screenshotsaturday #gaming #gamedev pic.twitter.com/IbHTik9nQk— Space Rock Games (@SpaceRockNZ) July 23, 2022
Almost 17 months ago, two game developers came to our Hamilton startup capital roadshow and told us a story about their studio, Space Rock Games, that hooked us. Fast forward to today; with a $650k pre-seed round along the way, we have the first in-game look at our hero, Helena, in action.
Taking the cooperative adventure genre and turning it on its head with gameplay mechanics that you want to try forever and an engrossing world filled with rich characters, heaps of lore and incredible visuals, our launch game, Criminals Within is on fire.
So pleased, that Tom was the first to receive our Diablo merch! Please tag us if you spot anyone wearing an Instinction Tee #itribe #Instinctionmerch https://t.co/lWg6Q9uLP2— Instinction, Prehistoric Action-Adventure (@InstinctionGame) July 28, 2022
The Hashbane team recently hosted a giveaway on Twitter in celebration of their Youtube channel subscribers. Looks like we already have one lucky winner and a fan who is super ready to play their game, Instinction when it comes out!
“I live in an apartment so I can't compost”
One of the biggest misconceptions about composting is that you need a garden to take part - but there are SO many options for urban composting out there! Compostic recently wrote a blog on the many different ways of composting, including their own products 😉
Portfolio company job openings
Auckland, New Zealand
Auckland, New Zealand
Auckland-based or Remote-based
Resources
Signal NFX is a website where you can find VCs that match your start-up category and allow you to find them and connect!
You can filter and find the investors you want for any geography. Great for startups raising and for us to syndicate rounds 😎
A few years ago, Hillfarrance and Phil Taylor at Tompkins Wake decided to make our standard term sheet template open-source and shared it with the NZ startup market. Seeing it used in the wild has been fantastic, but we felt it was high time we gave you an improved Ver. 3.0.
Some of the new features:
The inclusion of the Diversity Rider so that you as founders can decide how much investment you would like to source from under-represented investors.
For lead investors, this gives you 90 days of exclusivity to lead the round once the term sheet is accepted. Like in our rounds, other investors can still join the round, but your position as lead is temporarily secure unless you and the founders decide otherwise.
Our infamous/famous (depending on your persuasion) universal fundraising fee ban remains standard.
All legal fees are split 50:50 between the investor and the startup.
If you are a founder raising a round, why not start the process with a draft term sheet with your desired terms shared loud and proud? We love it when Founders have the conviction to do that.
You can download the editable Word version in the Resources section of our website down below. As always, running these types of docs past an experienced lawyer is good practice before you commit.
Read of the month
If you need a motivational boost, we recommend this book by David Goggins, ex-Navy Seal, former pull-up world record holder and runner of the most brutal ultramarathons globally. David's journey was nothing but turbulent, and this book tells the story of his life, how he built mental fortitude along the way and overcame any obstacle he set his mind to.
Podcast of the month
A big shout-out to Sim & Sonya, who have garnered global acclaim for their platform, award-winning podcast and content they have built around investing.
Plus, they did all this from the Land of the Long White Cloud!
Startup News & Trends
Nnamdi Iregbulem, Partner at Lightspeed Venture Partners, has written a great blog on software valuations and how revenue growth and profitability are only half of the equation in valuations. Some of the highlights from this piece are:
Averages do not tell the whole story, and software valuations are fat-tailed.
The variance of valuations ebb and flow, and good investors use regression analysis to figure out the variation. However, this leaves much room for questions, as shown above in the dark matter zone.
Even after accounting for revenue growth and cash flow, there still lies a huge variability between the 90th percentile of publicly listed software companies and the 10th percentile.
Nnamdi points to unobserved or latent characteristics as the driver of this variation and recommends Principal Component Analysis (PCA) to identify these latent factors.
The 1st hidden factor in valuations was none other than the Macro-Economy at the time.
Incorporating a GDP factor in a regression explains some of the initial image's dark matter.
It turns out that software companies ARE sensitive to broader economic conditions in the short-run to public investors.
Ben Stancil is the Founder & Chief Analytics Officer of Mode. He recently wrote a blog on his thoughts on data-driven companies and if they actually win. Here is a summary:
If we’re competing against companies that have more experience, are more decisive, have better instincts, or operate more crisply than we do, can data cover these gaps?
If data is actually that valuable—if it’s truly a competitive edge—we’d trade away other advantages for it.
Being data-driven is a long game. It takes time for an advantage to accumulate.
Using data effectively means using data a lot. The more hands a card counter can play, the better off they’ll be. Similarly, the more decisions that data nudges, the more its impact will be.
Survivorship bias is a type of sample selection bias that occurs when an individual mistakes a visible successful subgroup for the entire group. In other words, survivorship bias occurs when an individual only considers the surviving observation without considering those data points that didn't survive in the event.
We can directly relate this to startups. Because only a select few startups actually become successful, we are only looking at a small picture and not at all the ones that came before them that ultimately failed.
This article explains this greatly regarding startups and listening to successful people. Here's the key highlights:
Failure is still a dirty word
Spotlighting winners, shunning failures
Failing by association
Fear of missing out (FOMO)
Pitchbook has released a Q2 2022 report on the state of U.S. Venture capital. Here are some of the highlights:
Analysts say that we can expect strong fundraising activity and a record amount of dry powder to drive dealmaking shortly until more certainty can be found across markets.
Seed valuations remain high despite the macro-economic outlook.
VC Firms are still raising huge amounts of money for their funds.
Notable start-up exits
Funding
Want to get in touch about your startup? Reach out to us at pitches@hillfarrance.com