We caught wind pretty early on that Anki’s Cozmo was selling briskly when the adorable little robot temporarily sold out around Christmas 2016. Along with the announcement of the company’s latest robot, the startup released Cozmo sales figures for the first time, and things are, indeed, looking pretty good for the WALL-E-inspired ‘bot.
Turns out the company has sold more than 1.5 million robots to date, including “hundreds of thousands” Cozmos. Not too shabby for a $180 robot toy that admittedly launched with somewhat limited functionality (with the promise to add more in time). Anki also says the device was the best-selling toy in its class for the whole of 2017, which seems to officially put to rest any concern that the pricey robot was going to be too much of a niche device to warrant serious consideration.
It also gives the company solid footing to launch a robot like the pricier Vector, even as companies like Sphero and Kuri have stumbled. Along with all of that, the company also generated just under $100 million in revenue last year. Anki currently employees 203 and has raised north of $200 million, with a Series D arriving in 2016, no doubt spurred on by some of the early attention the company got when Apple featured its Drive cars at a keynote way back in 2013.
Update: The story, including the headline, has been corrected. Anki has sold 1.5 million robots, not Cozmo robots. Anki says, “we can confirm that we’ve sold hundreds of thousands of our characterful robot.” We regret the error.
In its final weeks as a private company, Lyft is reaching for every inch of the rideshare market it can get.
To do this, it’s revisiting an old strategy: discounts. If you’re a Lyft user, you may have noticed the company has been offering cheaper rides in the last few weeks. Why? To encourage riders to ditch the Uber app in favor of Lyft and to tack on additional rides from users who may have otherwise hesitated to dole out the cash. After all, a $13 ride is a lot different from a $7 ride.
According to a report from The Information, Lyft’s discounts were extended to roughly one-third of riders’ recent trips and helped Lyft gather an additional 4 percent of the U.S. rideshare market. Lyft now holds 34 percent of the market, while Uber claims the remaining 66 percent. The additional percentage points will give Lyft a leg up as it launches its road show, the final step ahead of its Nasdaq IPO, expected in April.
We’ve reached out to Lyft to confirm the details in The Information’s report.
Devoted Uber riders may have noticed discounts, too. The competing ride-hailing giant also unleashed a hefty dose of discounts to keep riders on its app. Uber, of course, is also in IPO registration, expected to debut on the public markets in the first half of 2019, likely one or two months after Lyft.
Lyft was most recently valued at $15 billion and will garner a valuation north of $20 billion with its highly anticipated debut. Uber’s last private market valuation was roughly $72 billion; it’s expected to surpass $100 billion upon its IPO.
This month’s discount war isn’t the first time the two ride-hailing companies have cheapened prices to entice riders despite criticism from investors, who’d rather the companies focus on profitability. But this is Silicon Valley, even in a run-up to an IPO, when companies should theoretically be hyper-focused on profitability, Uber and Lyft seem to be just fine with continuing to burn through cash by subsidizing rides.
Uber and Lyft filed in December a draft registration statement with the U.S. Securities and Exchange Commission for their respective floats.
Lyft has selected JPMorgan Chase & Co. as the lead underwriter of its IPO, along with Credit Suisse Group and Jefferies Group. The company has raised $5.1 billion in venture capital funding to date.
Uber, for its part, has reportedly tapped Morgan Stanley to lead its IPO. It has raised nearly $20 billion in a combination of debt and equity funding.
Report: Lyft picks JPMorgan to lead IPO in 2019
We’ve already got a star-studded lineup prepped to speak at Disrupt SF, running September 5 to September 7. So far, we’ve announced appearances by Sophia Amoruso, Carbon’s Dr. Joseph DeSimone, Adidas’ Eric Liedtke, Ripple’s Brad Garlinghouse, Michael Arrington, and Drew Houston.
But given that today is the last day to purchase early bird tickets, we thought we’d let slip a couple more stellar speakers joining the agenda.
We’re thrilled to announce that Roblox CEO and cofounder David Baszucki and Goldman Sachs CFO Martin Chavez will be joining us on the Disrupt SF stage. (Not together, to be clear.)
David Baszucki – Roblox
Back in 2006, Roblox started out as an interactive physics program, giving people the opportunity to test out their own physics experiments in a virtual setting, from testing out pulley systems to simulating a car crash.
In the time since, Roblox has managed to turn physics into a gaming sensation for young people.
The massively multiplayer online game has overtaken Minecraft and is wildly popular with the pre-teen crowd. In fact, the company recently announced that it has hit 60 million monthly users, spending more than 780 million hours on the platform.
Roblox lets users build their avatars and almost anything else using their imagination, sort of replacing the LEGO of older generations. But because those users tend to skew young, Roblox has made safety a priority, implementing a number of parental controls, with moderators scanning all communication between users, ensuring that a young person doesn’t give out any personal identifying information.
The company has raised nearly $100 million from investors like Index Venture Partners, First Round Capital, Altos Ventures, and Meritech Capital Partners. Roblox also recently signed a deal with HarperCollins to grant them the publishing rights for Roblox, marking the beginning of Roblox’s existence in the physical world.
Plus, Roblox has established itself on YouTube as well as with merchandise, which is an increasingly important part of successfully running a game studio.
We’re absolutely psyched to have David Baszucki join us on stage to talk about the company’s meteoric rise.
Martin Chavez – Goldman Sachs
Many don’t think of Goldman Sachs as a technology company. But those people would be wrong.
Goldman Sachs CEO Lloyd Blankfein has said many a time that the firm is a technology company, and has gone on to state that Goldman Sachs employs more engineers than companies like Facebook and Twitter.
But Goldman Sachs is also a huge investor, with more than 600 investments according to CrunchBase. Some of those investments include WeWork China, Cadre, Dropbox, Uber, and Ring, which recently sold to Amazon for more than $1 billion, according to reports.
Trust us, keeping a finger on the bleeding pulse of technology is exhausting. But Goldman Sachs CFO Martin Chavez, who has a long history in the technology sector, is keeping up with the Joneses.
Before serving as the CFO, Chavez was the Chief Information Officer at Goldman Sachs and led the technology division. He’s also a serial founder, cofounding and serving as CTO of Quorum Software Systems from 1989 to 1993, as well as cofounding Kiodex, where he served as Chairman and CEO until 2004.
We’re excited to pick Chavez’s brain on how fintech might evolve over the next five years and what role Goldman Sachs might play in that evolution, especially given the rise of cryptocurrencies and the blockchain.
Google just released an advert for Google Assistant and its band of merry products. It’s really good. Basically, the ad is “Home Alone” reimagined, but this time Macaulay Culkin plays an adult Kevin who is home alone with a house full of devices controlled by Google Assistant. Obviously.
And for the sake of objectivity, I need to point out a home outfitted with Amazon or Apple’s voice assistants could do the same things.
“Other companies suck in your data too,” Facebook explained in many, many words today with a blog post detailing how it gathers information about you from around the web.
Facebook product management director David Baser wrote, “Twitter, Pinterest and LinkedIn all have similar Like and Share buttons to help people share things on their services. Google has a popular analytics service. And Amazon, Google and Twitter all offer login features. These companies — and many others — also offer advertising services. In fact, most websites and apps send the same information to multiple companies each time you visit them.” Describing how Facebook receives cookies, IP address, and browser info about users from other sites, he noted, “when you see a YouTube video on a site that’s not YouTube, it tells your browser to request the video from YouTube. YouTube then sends it to you.”
It seems Facebook is tired of being singled-out. The tacked on “them too!” statements at the end of its descriptions of opaque data collection practices might have been trying to normalize the behavior, but comes off feeling a bit petty.
The blog post also fails to answer one of the biggest lines of questioning from CEO Mark Zuckerberg’s testimonies before Congress last week. Zuckerberg was asked by Representative Ben Lujan about whether Facebook constructs “shadow profiles” of ad targeting data about non-users.
Today’s blog post merely notes that “When you visit a site or app that uses our services, we receive information even if you’re logged out or don’t have a Facebook account. This is because other apps and sites don’t know who is using Facebook. Many companies offer these types of services and, like Facebook, they also get information from the apps and sites that use them.”
Facebook has a lot more questions to answer about this practice, since most of its privacy and data controls are only accessible to users who’ve signed up.
The data privacy double-standard
That said, other tech companies have gotten off light. Whether it’s because Apple and Google aren’t CEO’d by their founders any more, or we’ve grown to see iOS and Android as such underlying platforms that they aren’t responsible for what third-party developers do, scrutiny has focused on Zuckerberg and Facebook.
The Cambridge Analytica scandal emerged from Facebook being unable to enforce its policies that prohibit developers from sharing or selling data they pull from Facebook users. Yet it’s unclear whether Apple and Google do a better job at this policing. And while Facebook let users give their friends’ names and interests to Dr. Aleksandr Kogan, who sold it to Cambridge Analytica, iOS and Android apps routinely ask you to give them your friends’ phone numbers, and we don’t see mass backlash about that.
At least not yet.
Selling equity to buy Facebook and Google ads is a bad deal for startups. Clearbanc offers a fundraising alternative. For fast-growing businesses reliably earning sales from their marketing spend, Clearbanc offers funding from $5,000 to $10 million in exchange for a steady revenue share of their earnings until it’s paid back plus a 6 percent fee. Clearbanc picks what merchants qualify by developing tech that scans their Stripe, Facebook ads, and other accounts to assess financial health and momentum. It’s already doled out $100 million this year.
“As a business successfully scales, we continue to provide them ongoing capital” co-founder and CEO Andrew D’Souza tells me. “Our goal is the be the first and last backer of a successful business and save the entrepreneur from having to take hundreds of pitch meetings to keep their company funded.”
After largely flying under the radar since being found in 2015, now Clearbanc has some big funding news of its own. It’s now raised $70 million from a seed and new Series A round from Emergence Capital, Social Capital, CoVenture, Founders Fund, 8VC, and more with Emergence’s Santi Subotovsky joining the board.
“Venture capital has shifted. Instead of funding true research and development, today 40% of venture capital goes directly to buying Google and Facebook ads” D’Souza claims. “Equity is the most expensive way to fund digital ad spend and repeatable growth. So we created something new.”
Clearbanc emerged from an angel investing alliance between two serial entrepreneurs. D’Souza had built Andreessen Horowitz-funded social recruiting site Top Prospect, USV-backed education tech company Top Hat, and Mastercard portfolio biometric authentication wearable startup Nymi. He’d helped raise over $300 million in venture after a stint at McKinsey when he begun co-investing with Michele Romanow, a VC from Canada’s version of the TV show Shark Tank called Dragons’ Den. She’d bootstrapped shopping hub Buytopia that acquired 10 other ecommerce companies, and discount-finder SnapSaves that she sold to Groupon in 2014.
“We started investing together in some of the deals we would see from Dragons’ Den and often found that an equity investment wasn’t the right structure for these consumer product companies. They had great economics and had found a niche of customers, but often didn’t want to exit the business at any point” D’Souza recalls. “They needed money to acquire more customers, scale up their marketing efforts and online ad spend. So we started to do these revenue share deals.”
Both engineers, they built tech to automate the due diligence and find companies with healthy unit economics and customer acquisition costs. The partnership blossomed into Clearbanc, and romance. “We’re also a couple, so we spend a lot of time together” D’Souza writes.
Now Clearbanc has poured over $100 million into 500 companie in 2018 like Vinebox. The subscription wine box company used Clearbanc to grow its membership numbers while raising a Series A for developing new products. Clearbanc’s companies pay out 5 percent in revenue share until the investment plus 6 percent is paid back. That’s a great deal for companies that are already proven money makers like Hunt A Killer, a murder mystery game subscription box that had raised $10,000 and was selling swiftly. Derisked, it didn’t need venture, and has now taken $8 million to ramp its business.
Clearbanc co-founders Andrew D’Souza and Michele Romanow
Clearbanc is rising up at a time when organic growth channels are shutting down. The ruthless optimization of algorithmic feeds on Facebook, Instagram, and Twitter suppress marketing content unless businesses are willing to pay. Without free virality opportunities, companies must take venture funding or loans just to turn around and pay that money to big ad platforms. With the new cash that also comes from iNovia Capital, Real Ventures, Portag3, Precursor, WTI, Berggruen, and FJ Labs, Clearbanc plans to expand abroad after doing deals in the US and Canada. It’s also going to invest in building awareness as well as its data science capabilities.
D’Souza and Romanow must have confidence in their tech, as a wrong investment means they might never get their cash back. “We pay a lot of attention to our underwriting and decision-making process because if we make a mistake, we can lose a lot of money. Unlike a VC, we don’t expect the majority of our companies to fail and have the winners make up for the losses” says D’Souza. One big misstep could wipe out the gains from a bunch of other investments.
Meanwhile, it has to break the norms of how businesses find funding. Startups immediately seek traditional venture or debt financing that can depend on the flashy names already on their captable, while merchants turn to exploitative online lenders that require a personal guarantee and base their decisions on the founders’ own credit histor instead of the business.
While riskier hard tech startups that will take years to get to market will still need to rely on venture, a new crop of direct-to-consumer products and other fast-monetizing startups that are already humming can avoid diluting their team and investors by using Clearbanc. D’Souza concludes, “We’ve spent our entire careers as entrepreneurs and wanted to build a new asset class to help entrepreneurs grow.”
Stampli, an invoice management platform, announced today the closing of a $6.7 M Series A funding round led by SignalFire, with participation from Bloomberg Beta, Hillsven Capital, and UpWest Labs.
If you’ve ever freelanced for a company, you’ll know that the long, instant ramen-filled days between filing an invoice and having it completed can be grueling. Brothers Eyal and Ofer Feldman launched Stampli in 2015 to help solve this problem and bridge the communication gap between accountants, related internal departments and vendors. Aimed at mid to large size companies, to date Stampli has helped a wide range of companies (from fashion to tech) manage over $4 billion in invoices through its AI driven interface.
“Invoice management is like an elephant,” co-founder and CEO Eyal Feldman told TechCrunch. “One person sees the head, one person sees the tail, one person sees the legs. It’s a process that different people see different versions of but the whole picture should include everybody. The ability for all of these people to be involved is really the core of the process.”
Traditional invoice management between vendors and internal departments in a company can be a tangled mess of email exchanges, lost messages and ultimately delayed payments. But, Stampli’s interface (which can be integrated directly into a company’s enterprise resource planning software like NetSuite, Intuit QuickBooks, or SAP) allows for every step of the invoice’s journey to have a central landing page for every relevant party to collaborate on.
“We found that 85 percent of our users are not accounting people,” said Feldman. “[They] are all the managers around and all the other people involved. What we found in our research is that when the process works for them is when accounting is happy.”
This landing page not only provides easy access to pertinent information between departments, but Stampli’s built-in AI, Billy the Bot, helps invoice managers fill in relevant information by first learning the structure of the invoice and then learning through observation the user’s behavior and work flow. When Billy passes an 80 percent confidence threshold for its decision, it goes ahead and auto-fills the information. But, if it’s feeling unsure about its choice, Billy will leave it as a suggestion instead to avoid introducing any errors to the paperwork.
The more invoices users process through Stampli, the more Billy learns how to best streamline the process for that company.
In the arena of invoice management, Stampli faces competition from companies like Determine and Concur, which also offer all-in-one platforms for invoice management and, in the case of Concur, also incorporate machine learning to capture invoices.
According to Feldman, what helps Stampli stand apart from the competition is its emphasis on company collaboration and its no-fee installation of the software. With no upfront cost, the company only charges per invoice.
Chinese consumers were quick to adopt digital payments, and a recent shopping binge showed they are ready for another leap: biometric payments.
On November 11, Alibaba wrapped up Singles’ Day – the world’s largest shopping event – and hauled in $30.8 billion in total transactions, a staggering amount bigger than Cyber Monday and Black Friday combined.
Instead of frantically inputting payment passwords to grab deals, Chinese users jumped on new technologies to shop in the blink of an eye. This year, 60.3 percent of Singles’ Day customers paid either by scanning their fingerprint or taking a selfie.
That’s according to Alipay as it collected the data for the first time. The Alibaba affiliate digital wallet handles online and offline transactions for 870 million users around the world and its close rival WeChat Pay, the payment method that runs on Tencent’s popular chat app, is on a par at over 800 million.
Both are racing towards a future of seamless payment. Alipay debuted pay-by-fingerprint back in September 2014. In less than a year, WeChat Pay announced its own. Over time Chinese shoppers got themselves familiar with biometric verification, using it to unlock smartphones and enter office buildings. By 2016, around 95 percent of the people surveyed by China’s Payment and Clearing Association said they “knew about” fingerprint recognition.
The more sophisticated selfie-taking method soon followed. Last year, Alipay rolled out a smile-to-pay scheme at a KFC store in Hangzhou, home to Alibaba and Alipay, and has since then launched face recognition verification for a wide range of offline scenarios, including delivery pickup.
Alipay’s parent company Ant Financial lets users scan faces to pick up deliveries. / Source: Alibaba
The government has also been swift to leverage face recognition for other purposes. A well-known example is its alliance with the world’s highest-valued AI company SenseTime to develop China’s national surveillance system that can, for instance, track down criminals on streets.
Chinese people are getting in on unique-to-my-body authentification fast. In 2016, just above 70 percent users were comfortable with paying with their biometric information, according to the CPCA survey. In 2017, the ratio jumped to 85 percent.
This fast adoption also raises issues. In 2016, half of the respondents from the survey expressed security concerns over using biometrics payments. In 2017, 70 percent said they were worried. That same year, 77.1 percent cited privacy as another concern, up from just under 70 percent a year ago.
KZen, a company run by former TC editor Ouriel Ohayon, has raised $4 million in seed to build a “better wallet,” obviously the elusive Holy Grail in the crypto world.
Benson Oak Ventures, Samsung Next, Elron Ventures invested.
Ohayon, who has worked at Internet Lab and founded TechCrunch France and Appsfire, wanted to create an easy-to-use crypto wallet that wouldn’t confound users. The company name is a play on the Japanese word kaizen or improvement and it also points to the idea of the zero-knowledge proof.
Omer Shlomovits, Tal Be’ery, and Gary Benattar are deep crypto researchers and developers and helped build the wallet of Ohayon’s dreams.
“We wanted something that did not feel like a pre-AOL experience, that was incredibly superior in terms of security, and simple to use,” he said. “We wanted a solution that brings peace of mind and that did not force the user into compromising between convenience and security which is, unfortunately, the current state of affairs. We quickly realized that this mission would not be possible to achieve with the same tools and ideas other companies tried to use so far.”
The app is launching this month and is being kept under wraps until then. Ohayon is well aware that the world doesn’t need another crypto wallet but he’s convinced his solution is the best one.
“The market does not lack solutions,” he said. “On the contrary, there are software wallets, hardware wallets, paper wallets, vaults, hosted custody. But there is no great solution. To be able to use a crypto wallet you either need a good dose of Xanax or a master’s degree in computer science or both, unless you want to depend on a central entity, which is even worse as the news are reminding us weekly.”
We’ll see as they use the cash to launch a crypto wallet that anyone – not just Xanax-eaters – can use.
South Korea has been at the forefront of the blockchain movement, with some of the highest density of cryptocurrency traders anywhere in the world. Now, as the frenzy around cryptocurrency prices recedes (Bitcoin is around $7350 right now, down from a high of almost $20,000 last December), the country is starting to consider the more utilitarian aspects of blockchain that might not immediately lead to riches.
Seoul’s mayor, Park Won-soon, discussed the city’s plans to launch what is currently being dubbed the S-coin in an interview with CoinDesk. In his vision of the program, the coin could be used for subway fares, as well as “a payment method for city-funded welfare programs for public employees, young job seekers and citizens helping the environment by saving electricity, water and gas.”
That’s a remarkable statement coming from an office that is widely considered to be the second most important in the country. It’s also a far cry from the strong opposition that national leaders and regulators voiced toward blockchain — and cryptocurrencies in particular — during the run up in Bitcoin and Ethereum prices last year, particularly in the wake of a series of Bitcoin heists by North Korea.
Back then, the Korean financial authorities and the Justice Ministry said that they were considering outright banning cryptocurrencies. Now, over the past few weeks, national authorities have quietly floated new proposals around Initial Coin Offerings (ICOs), potentially creating a procedure that would allow ICOs in well-regulated circumstances. Mayor Park also said in his interview with CoinDesk that further regulation would be necessary around blockchains before any of Seoul’s proposals could be brought into effect.
The invention of blockchain, and Bitcoin in particular, was seen by many in the community as a way to “disrupt” politics as usual, by moving power away from central authorities to decentralized players. However, the technology increasingly looks like it will be subsumed by the state to improve existing institutions.
South Korean cities, like counterparts elsewhere around the world, are investigating whether blockchain technology could provide mechanisms like algorithmic zoning. City governments often hold many records of interest to blockchain specialists, including property records, ID records, zoning codes, business and health licenses, as well as construction permits. Creating a transparent and efficient clearinghouse for such information could generate significant gains for the quality of urban governance.
In this context, it is important to clearly delineate blockchain as database and cryptocurrencies as money. The proposals from Seoul and elsewhere have been designed around the former. Even when such tokens might provide a financial benefit, such as a discount on subway fares or housing, these tokens are not designed to be fungible currencies in the same way that cryptocurrencies are, but instead convenience tools to provide digital access to amenities.
That’s in contrast to initiatives like the one from Venezuela to create an oil-backed cryptocurrency called Petro, which many analysts saw as a convenient means to avoid U.S.-led sanctions on the Maduro regime. The Trump administration blocked the purchase of Petro last month.
Seoul is expected to announce a roadmap for blockchain in the coming weeks, and other cities are coming close to launching their own initiatives. The value bubble in cryptocurrencies may be receding, but their practical uses may well drive the next wave of innovation.
Stop me if you’ve heard this one before. Samsung’s working on phone with a folding screen. And it’s arriving soonish. You’d be entirely forgiven if you rolled your eyes at that one, or at the very least took the whole thing with a sufficiently massive grain of salt.
This particular rumor has been floating around for about as long as Samsung’s been in the smartphone game, but The Wall Street Journal appears to have it on good authority that such a device may finally come to fruition early next year.
What’s more, those “people familiar with the matter” say the seven-inch handset is currently sporting the codename “Winner,” which sounds a bit like something Donald Trump would nickname his smartphone.
The design sounds more like a classic clamshell handset than the novel — though not particularly practical — dual-screen ZTE Axon M that arrived late last year. To be fair, that was more two screens fused together, rather than a “folding screen.” When the Samsung device is closed, on the other hand, it apparently sports cameras on either side and “a small display bar on the front.”
The phone will reportedly be released in smaller quantities than most Samsung smartphones/tablets at first, with wider availability later in the year. A lower than expected demand for the company’s latest flagship, the Galaxy S9 is said to be a driving force behind Samsung’s push to get this product out the door.
The category has long been a white whale for a smartphone industry intent on cramming the largest screen into the smallest footprint possible. The ability to fold it up and shove it in a pocket would certainly be a way to accomplish this. There have, however, been all manner of technical constraints along the way.
A representative for the company offered TechCrunch a fairly boilerplate statement in response to the rumors, “ “It is Samsung’s policy to not comment on rumors and speculation.”
Sam Angus has been a lawyer in Silicon Valley since the 1990s. Today, he represents some of the biggest names in the startup world, from their earliest days through acquisitions and IPOs, and including four acquisitions last year: TSheets, GitHub, Glint and HelloSign.
But his startup experience actually goes back to the 1980s, when he and some friends built a booming calendar publishing business out of their dorm room during college. In the interview below, he tells us about the ups and downs of the tech industry over the decades, how he helps clients through the good times and bad, and how he works within Fenwick & West, one of the leading tech law firms in tech. We also discuss long-term trends, like the shift towards founder-friendly terms in this era versus past decades in the Valley.
On early-stage problems:
“I’ve represented hundreds of early-stage companies. It is not uncommon for companies to have some existing legal issue that needs to be addressed, such as capitalization, documentation and/or employee/IP issues. It is unfortunate, but these issues will frequently — especially with early stage companies — lie dormant and be discovered when the company is contemplating its first financing or a significant transaction, and can take investors or buyers by surprise.
“Sam is one of the most trusted partners that I have ever had and one of the most important people to Airbnb’s early history.” — Brian Chesky, San Francisco, CEO, Airbnb
“A common mistake is for a company to think that a given issue will not be a concern to an investor or buyers. In my experience, issues that arise on the eve of a financing or other transaction can create risk in the transaction and can be expensive to address quickly. For example, one client I worked with had been operating for years with virtually no documentation and not surprisingly had significant deficiencies in terms of corporate approvals. Very few things are fatal, but the result for this client was a bumpy and more expensive financing process — which required several rounds of explanation to the investors and their counsel.”
On being a startup lawyer:
“What I’ve learned is that the best lawyers for startups bring more than competent legal advice to the relationship – they act like business owners themselves, thinking strategically about the business. The best lawyers have significant experience and a knack for pattern recognition, the combination of which helps identify issues and opportunities in advance of when they become apparent.”
“There are some legal risks that early-stage companies will need to take. In my view, my role with earlier stage clients is to position them for success by being practical and focusing them on the issues that are material for a company at their stage of development. Overall, I want to empower clients to push the bounds of what they think is possible, while making wise business and legal decisions that won’t handicap them in the future.
“I would also point out that being able to scale with clients is extremely important. As clients grow, my role evolves to fit their needs – what works for a startup company is different from what a unicorn/growth company will need from their lawyer. With early-stage companies I tend to be more closely involved with the founders and the company’s business, while with later stage companies the relationship becomes more strategic and we tend to support internal legal teams and boards of directors.
Below, you’ll find the rest of the founder reviews, the full interview, and more details like their pricing and fee structures.
This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey (which we’re keeping open for more recommendations) and our own research. If you’re a founder trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.
Eric Eldon: To begin with, tell me about Fenwick & West. It’s one of the original law firms that started in Silicon Valley and focused on tech companies, and you’ve been there for years through the various cycles.
Sam Angus: Launching my career in Silicon Valley has provided me with a unique skillset and perspective that now enables me to thoughtfully advise clients who want to scale quickly, no matter where they are located. Working with fast-growing innovators, like those I’ve served since the tech boom of the 1990s, is in my view different from traditional approaches to practicing law. Providing clients with excellent legal advice is table stakes for any advisor to startups. What I’ve learned is that the best lawyers for startups bring more than competent legal advice to the relationship — they act like business owners themselves, thinking strategically about the business. The best lawyers have significant experience and a knack for pattern recognition, the combination of which helps identify issues and opportunities in advance of when they become apparent. Great startup lawyers also have extensive networks of investors, founders and partners and can leverage these networks to help their clients, address material operational issues, fundraise or complete a strategic transaction. They are efficient/cost-effective and move as quickly as their clients, and, most importantly, provide judgment. This entire skill-set is rare for lawyers, but when it comes in one package it is incredibly valuable to emerging companies. That’s one of the reasons why I love working at Fenwick: this approach to advising startups is simply how we practice.
Eldon: The legal industry is seeing real competition from online services and automation — how are you competing?
Angus: It is true that automation is impacting the practice of law, like other sectors of the economy. Because Fenwick works closely with innovative companies across the globe and sees how technology is changing things, we are among the firms leading the way to embrace this change.
For example, Fenwick has an in-house data and technology innovation team. Our innovation team has developed various automation tools and software products to augment and enhance the services we provide our clients. These include automated forms, client portals where clients can access all the data about their companies (i.e. key corporate documents, cap table, contact information for their Fenwick team, etc.), and use of tools such as Kira, an AI platform that automates aspects of document review in M&A deals, allowing us to close deals at a rapid pace while helping control costs.
Another innovation is our budgeting capability. Fenwick’s budgeting team provides our clients with timely and accurate cost estimates for projects and transactions, such as M&A or IPOs. Leveraging our proprietary deal data about hundreds of similar transactions, we are able to more accurately predict legal costs for our clients.
Eldon: Let’s go back to how you got into working with technology companies and startups.
Angus: In the early 1980s, after a short stint playing professional tennis, I was recruited to play tennis at UC Santa Barbara on a tennis scholarship. While at UCSB, I entered the entrepreneur world, starting UCSB’s first entrepreneur club with two friends in 1984. We also launched our own business, a publishing company that produced and distributed wall calendars.
Our growth was rapid: In our first year we did one calendar title, the next year we expanded to five calendar titles, the year after that 25 calendar titles, the year after that 75 titles, as well as a number of posters and other printed products. As our business grew, we started licensing popular culture content, which was something the calendar industry hadn’t really seen before. We were the first to produce the Michael Jackson calendar and the first Madonna calendar.
Eldon: You did all of this while you were in college?
Angus: Yes, though I ended up taking a break from college in 1987, one quarter shy of completing my degree, to pursue the business full time. By 1989, the company had grown to about 150 US salespeople, ten international distributors, and was doing roughly $50 million annually in gross revenue.
In the end, I ended up selling my interest in the company to the lead investor following resolution of various claims with the investor. Through that experience, I learned firsthand what it’s like to be a founder who had bootstrapped and had scaled the company with complex supply chain … and navigated investor issues.