We’re excited to announce this week’s exclusive with Josh Ephraim, Startup and Venture Capital attorney at Gunderson Dettmer!
Josh is a former managing partner at Dorm Room Fund, a student-run venture fund backed by First Round Capital, during his time at Berkeley. Josh invested in over 25 companies during his time at DRF, including Greo, Distributed Systems fka Pavlov (acq. by Coinbase), Athelas, Capella Space, MoveButter, and Nimble Hiring.
With a wealth of knowledge about all things legal in startups and VC, we discussed:
- Trends in company and fund formation since COVID-19 😷
- When founders should start working with an attorney ⚖️
- How founders should think about accelerators 🚀
- The state of Legal in 2030 🔮
Thanks for sitting down with us, Josh. Let’s jump in.
How did you get started in your career? In startups?
When I was at Berkeley for undergrad, the startup ecosystem was nowhere near as developed as it is now. I was aware and interested in startups while I was there, but my major was in the liberal arts school and I wasn’t totally sure where I would fit in. My first job out of college was as a consultant for biotech companies, and as I learned how complicated the healthcare system is in the U.S., and how misaligned incentives are. I started to wonder how startups were trying to solve these problems, so I started going to NYC Health Tech meetups and eventually got connected with a digital health-focused startup program called StartUp Health. I learned a ton about the problems early-stage startups face — including legal.
Any fun stories from your time at Dorm Room Fund?
They somehow let me throw dodgeballs at Phin Barnes:
Hey @DormRoomFund this was fun... pic.twitter.com/cb1xrbP6RS
— Phin Barnes (@phineasb) September 22, 2020
What led you to the legal side of the house at Gunderson?
I think a lot of startups I worked with didn’t have the best legal counsel and weren’t getting the best advice, and I realized how much I didn’t know, but also that a lot of the lawyers didn’t care too much about what their clients were building, so I wanted to fill that gap on the legal side.
What trends are you seeing in company and fund formation since COVID-19?
Massive uncertainty — I certainly don’t know when there will be a vaccine, who is going to win the election, or what else 2020 will bring us, and I think founders and VC’s alike are feeling the same.
In the venture ecosystem, I think this has led to a premium on certainty. If founders can add to their war chests know to ensure they make it through the next 18 months, they are more likely to do so. Venture funds are the same way - if they can close the next fund earlier rather than later, they will do so.
Additionally, I think the private markets mirror the public markets in that the companies building products that thrive in a pandemic or post-pandemic environment have virtually unlimited access to capital, and investors will double and triple down on those businesses.
When should startup founders loop in legal counsel? What does a typical Gunderson client look like for you?
Anyone that is building a business that will have an outsized impact is interesting to me. I like working with founders that are motivated to build and grow a big business. I don’t care as much about what the innovation is, I’m just excited to work with innovators.
In terms of when they should loop us in, I really like tagging along for the whole ride, from formation through exit. If founders are fairly sure they will need the venture-capital jet fuel to grow, I think it makes sense to loop in legal counsel on the early side. It can save some money and more importantly major headaches later on if the corporate and IP matters are managed properly the first time, rather than going back and correcting any errors that may have been made in the past.
What’s your advice to founders looking to enter into an accelerator program?
This is a tough one, especially since I used to work at one. I think it depends on the founder’s skill set, the quality of the accelerator (this varies significantly), and also the cost the accelerator is asking. I think even for the most prestigious accelerators, there are some people that get a ton out of the experience, and some founders who feel like they didn’t need the seal of approval, the content, or the network and so the time and equity investment isn’t worth it. For others, it’s invaluable and turns founders that would never get the company off the ground or funded into great company builders.
What’s the difference between working with startups and VCs as an attorney in this space?
As a founder, there are other skills that are much more important than how to run and close a financing or a merger. As a VC, it’s probably more important to have knowledge in those areas. With founders, even if it’s not your first company, you’ve maybe done 3-5 financings ever, and maybe one merger if you’re lucky. The VC, if they are good, is doing at least that many every year. So we can do more to help fill that knowledge / experience gap for founders.
The year is 2030. What’s the state of corporate law for startups?
There is a lot of exciting innovation happening in legal tech right now, and my hope is that it allows lawyers like me to spend more time on advising and strategic work, and less time on the mundane and less exciting stuff. I hope that part of my job gets automated!
Thank you for your time and thoughts, Josh! We look forward to the continued success of you and the various companies you’re involved with!
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Deal News 9/19-9/25
Seed
- Marco raises $6,000,000, led by Antler, Struck Capital | Marco is a tech-enabled, trade finance platform that provides reliable access to working capital for Latin American SMEs.
- WhyLabs raises $4,000,000, led by Madrona Venture Group | WhyLabs is the AI observability company.
- Conjure raises $4,000,000, led by Pillar VC, RiverPark Ventures | At Conjure, we seek to bridge the gap between the joy of having the homes we want and the thankless busy-work of making that happen.
- Nori raises $4,000,000, led by Placeholder | Nori is the world’s only carbon dioxide removal marketplace.
- Cerby raises $3,500,000, led by Bowery Capital | Cerby is a cybersecurity company focused on helping enterprises harness Shadow IT.
- Fulcrum raises $3,100,000, led by Motivate Venture Capital | Networkable Operating System (ERP) for Manufacturing.
- Cloud Paper raises $3,000,000, led by Greycroft | Cloud Paper is a Seattle-based tree-free paper manufacturer that makes paper products made with 100% bamboo.
- Skynet Labs raises $3,000,000, led by Paradigm | Skynet Labs specializes in building uncompromising blockchain infrastructure for the decentralized internet.
- Zero Grocery raises $3,000,000, led by 1984 Ventures | Zero Grocery provides a convenient zero-waste grocery delivery service.
- Ahana raises $2,300,000, led by Lux Capital | Ahana brings PrestoDB-based ad hoc analytics offerings to market.
- Leaf Agriculture raises $2,000,000, led by Cultivian Sandbox Ventures | Leaf is a food and agriculture data infrastructure company that connects agriculture data across platforms.
Series A
- Libra Therapeutics raises $29,000,000, led by Boehringer Ingelheim Venture Fund, Epidarex Capital, Sante Ventures | Libra Therapeutics is a biotechnology company.
- Pure Watercraft raises $23,400,000, led by L37 Venture Partners | Pure Watercraft is building battery-electric propulsion systems for boats.
- SigmaSense raises $22,000,000, led by Foxconn Technology Group | SigmaSense provides a digital and fully-scalable sensing technology to solve the noise immunity and tuning challenges of touch sensors.
- Netdata raises $14,200,000, led by Bessemer Venture Partners | Netdata is an open-source, distributed, real-time, performance, and monitoring solution for systems and applications to help IT teams.
- Osso VR raises $14,000,000, led by Kaiser Permanente Ventures | Osso VR is an award-winning VR surgical simulation platform with advanced hand tracking.
- Babson Diagnostics raises $13,700,000, led by Genesis Capital, Lago Consulting & Services, Prism Venture Management, Siemens Healthineers | Babson Diagnostics is a medical technology company dedicated to bringing diagnostic blood testing to the retail pharmacy counter.
- Ionir raises $11,000,000, led by Jerusalem Venture Partners (JVP) | Ionir is K8s Storage and Data Management
- Spectrum Labs raises $10,000,000, led by Greycroft | Spectrum helps gaming, dating, marketplaces, and social platforms recognize and respond to toxic online behavior across any language.
- Laika raises $10,000,000, led by Canapi Ventures | End-to-end compliance and audit management for modern companies
- American Injectables raises $10,000,000, led by New Rhein Healthcare | American Injectables is a sterile injectable manufacturer of parenteral drugs.
- Blueboard raises $9,300,000, led by Origin Ventures | Blueboard is an experiential reward and recognition platform for the modern workplace.
- Silo raises $9,000,000, led by Andreessen Horowitz | Silo is a food marketplace that enables customers to buy and sell wholesale produce, protein, dairy, and shelf-stable food in minutes.
- Neuro Therapia raises $8,800,000, led by Brain Trust Accelerator Fund | Neuro Therapia is developing new therapies for diseases with an underlying component of neuroinflammation.
- Daring Foods raises $8,000,000, led by Maveron | Daring Foods is a startup company that produces plant-based chicken aimed to provide a healthy food alternative.
- Homesome raises $6,700,000, led by Itai Tsiddon | Homesome is an e-commerce platform for grocery stores and supermarkets, think of us as Shopify for Groceries!
- Attunely raises $6,000,000 | Attunely produces a machine learning model for debt collection, decreasing waste, and improving recovery yield.
- Streamloots raises $5,600,000, led by Bessemer Venture Partners | Streamloots monetizes the audience of Esports players and Live streamers
- Camera IQ raises $5,000,000, led by Shasta Ventures | Camera IQ is a camera experience management platform that helps marketers create new worlds that customers love to explore.
Series B
- Nuvia raises $240,000,000, led by Mithril Capital Management | Nuvia develops processors intended to create high-performance silicon design for a compute-intensive world.
- Nutcracker Therapeutics raises $60,000,000, led by ARCH Venture Partners | Nutcracker Therapeutics is a biotech company that develops and produces mRNA therapeutics on its proprietary and biochip-based platform.
- Siolta Therapeutics raises $30,000,000 | Siolta Therapeutics is a developer of human microbiome therapeutics intended to prevent and treat inflammatory diseases.
- Palladio Biosciences raises $20,000,000, led by Samsara BioCapital | Palladio Biosciences develops transformative medicines for orphan diseases of the kidney.
- Papa raises $18,000,000, led by Comcast Ventures | Papa is a platform that connects college students to senior citizens for companionship and assistance.
- Ionpath raises $18,000,000, led by Samsara BioCapital | Ionpath is a developer of an ion beam imaging technology used to provide analysis of tissue biopsies.
- Whitebox raises $18,000,000 | Whitebox's technology gives brands the ability to increase e-commerce sales, reduce fulfillment costs, and enhance decision-making.
- IRL raises $16,000,000, led by Goodwater Capital | IRL App is a social planning application that keeps users connected with each other.
- 5x5 Technologies raises $6,000,000, led by Safar Partners | Pioneer in the use of 3D computer vision and AI with unmanned aerial systems to inspect and analyze industrial assets.
- Data Gumbo raises $4,000,000, led by L37 Venture Partners | Data Gumbo provides an interconnected blockchain network designed to streamline smart contracts management for industrial companies.
- PointPredictive raises $, led by Napier Park Financial Partners | Risk Management & Artificial Intelligence Solutions.
Series C
- Greenlight raises $215,000,000, led by Canapi Ventures, TTV Capital | Greenlight is on a mission to help parents raise financially-smart kids.
- Beyond Limits raises $133,000,000, led by BP Ventures, Group 42 | Beyond Limits is an industrial and enterprise-grade AI technology company that focuses on energy, utilities, and healthcare.
- Silverback Therapeutics raises $85,000,000, led by EcoR1 Capital | Silverback Therapeutics is a biopharmaceutical company that develops ImmunoTAC therapies targeting previously inaccessible disease pathways.
- SpotOn raises $60,000,000, led by DST Global | SpotOn develops innovative software and payment solutions that help businesses increase revenue.
- Willow raises $55,000,000, led by Lightstone Ventures, Meritech Capital Partners, New Enterprise Associates, Perceptive Advisors | Willow is a female technology company that develops an in-bra wearable breast pump.
- RoadRunner Recycling raises $10,000,000, led by Avery Dennison | RoadRunner Recycling provides tech-powered solutions for commercial waste recycling which helps businesses lower recurring costs.
Series D
- Next Insurance raises $250,000,000, led by CapitalG, Munich Re Ventures | Next Insurance is an online-based insurance company for entrepreneurs and small businesses.
- Attentive raises $230,000,000, led by Coatue | Attentive is a personalized mobile messaging platform for innovative brands and organizations.
- MineralTree raises $50,000,000 | MineralTree provides mobile and online accounts payable automation software for finance professionals at growing organizations.
- NextCapital raises $30,000,000, led by FP Credit | NextCapital provides a personal benchmarking tool to help clearly understand how investments are performing.
Series E
- Bright Health raises $500,000,000, led by New Enterprise Associates | Bright Health develops a health insurance service platform designed to deliver a quality healthcare experience.
- Salsify raises $155,000,000, led by Warburg Pincus | Salsify empowers brands by providing tools to track and analyze inventories, presentation, and sales of goods on digital shelves.
- GOAT Group raises $100,000,000, led by D1 Capital Partners | GOAT Group is a marketplace for authentic sneakers, apparel, and accessories from select emerging and iconic brands.
Series G
- Robinhood raises $460,000,000 | Robinhood is a financial technology company that offers commission-free investing.
