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VC - Steven Cox | San Diego, CA

Feb 01
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TakeLessons Raises Another $4 Million and Launches Local Tutoring

By TakeLessons.com, Venture Capital No Comments

TakeLessons ScreenshotToday, we announced a round of funding to further our advancement into music and to launch our second vertical – tutoring – starting with San Diego tutors and Austin tutors.

I’ve been asked why we chose tutoring. We see it as a complimentary market to music.

  • Fragmented, yet large market
  • Tutors would rather do what they love vs. do administration and paperwork
  • Market is underserved by technology
  • We can now offer a new service to an existing student customer
  • Fits within our expertise of what we do
  • Allows us to leverage our online platform, so we can deliver a great experience either in person or online
  • Recurring revenue

So, I’m happy to announce a new chapter in the TakeLessons’ history book. We look forward to helping more and more instructors make a living doing what they love.

Press release below:

 

TakeLessons Closes $4 Million Venture Capital Financing. Announces Launch of New Tutoring Vertical.

SAN DIEGO, CALIF, January 29, 2013 – TakeLessons (http://www.takelessons.com),  the largest online service marketplace for music lessons in the U.S., today announced that it has completed a $4 million round of venture capital financing, bringing the total investment into the company to over $12 million. Triangle Peak Partners of Palo Alto led the round with participation from Siemer Ventures and existing investors Crosslink Capital and SoftTech VC.

Steven Cox, TakeLessons’ Founder and CEO said, “this new investment will aid our continued growth and leadership in the music space and will fuel our platform expansion into new marketplaces, including tutoring and the other performing arts.”

TakeLessons has paid out over $10,000,000 to music teachers who are serving students in over 3,000 cities. The rapid growth has recently been driven by TakeLessons’ Online Lesson platform, which enables more flexible scheduling and eliminates geographic constraints.

In addition to music education expansion, TakeLessons announced the launch of its new tutoring marketplace in San Diego this month and will serve Austin, Las Vegas, Sacramento and Denver by the end of Q1.

The funds from this round will be invested in product development to deliver an improved lesson experience for teachers and students and to pave the way for horizontal expansion into new markets. Karen Baumbach, VP of Finance and Alan Cole, Chief Revenue Officer, recently joined TakeLessons to support the company’s aggressive growth targets.

“We’re committed to helping teachers make a living doing what they love to do,” remarked Cole. “This funding will support investment in our tools that allow private instructors to acquire and retain the best students.”

About TakeLessons
TakeLessons, the largest online service marketplace for music lessons in the U.S., has been connecting music students with the best local music teachers since 2006. The company provides convenient, safe, affordable and fun music lessons to students of all ages. A pioneer in the online services space, TakeLessons also equips teachers with web-based scheduling, billing and communication tools. For more information and to find the best local teachers, interested parties should visit www.takelessons.com

# # #

 

Nov 15
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Things I Learned at the Crosslink Startup Investor Meeting

By Entrepreneur Insights, Start-Ups, Venture Capital 2 Comments

Crosslink Capital

Recently, I got to attend the Crosslink Investor Meeting where partners of the firm spoke on what their seeing in the marketplace.

A couple key takeaways for me was that technology and the internet is still very early. Lots of room for growth and expansion as software eats the world. Second, some of the largest inflection points in a business are made when you get the right team. Never underestimate the power of the team.

Here are my notes.

Takeaways from The Crosslink Conference

Why We are Growth Equity focused

  • Different investing and operational skill set than steady-state or slower-growth
  • Moore’s law is open to everyone.
  • In 14 years, Google has surpassed MSFT in market cap. Go where the growth is.
  • The internet will expand to most all service businesses.

Characteristics of winning start-ups

  • Market dynamics matter. Industries and macro trends are important.
  • Winners make most of the profit. Be early. Be flexible.
  • Many inflection points with winners. Again, be flexible.
  • You must understand the value proposition.
  • Many losers.
  • Hard to value.
  • The rate of change is changing faster and faster. Thus, the only ones who can keep up are those who are growing.

Building a company boils down to these four things:

  • People
  • Products
  • Strategy
  • Execution

View of the Market

  • We expect a long road ahead
  • Deleveraging underway – especially in financial and consumer
  • We see stocks still inexpensive relative to bond yields since 2008
  • Cyclical growth recovery is over. Thus, we have to be in growth companies.
  • 10% a year for the next 3 years feels about right for the S&P

Eric Chin – Partner (and TakeLessons Board Member)

The questions we ask when investing:

  • “What is your key differentiator? Your secret sauce?”
  • “How defensible is the secret sauce?”
  • Does it fit in our themes?

Saas

  • Still very early. Less than 20% penetration.
  • Supply chain, business intelligence, enterprise is a big area.
  • Multiples are correlated with growth rates
  • 30% growth = 6x revenues multiple
  • Start with the end user in mind. Build software for the person who uses it the most. Usability is absolutely a must. If not, there’s no adoption.
  • Celebrate simplicity of use.

Advertising Technologies

  • Total advertising $175B market and growing. Online is now $40B.
  • Brand Spend, Video, mobile emergence, and real-time bidding.
  • MARIN Software had a great video that explains what they do. – Chris Lien, CEO. Good dude. Very smart.

Brian Grey – Bleacher Report

  • Focus on building a brand
  • Four D’s of fundraising: Discussion, Diligence, the Dance, the Drama – prepare for all four because they will happen – especially the drama.
  • Choose investors carefully and wisely. Not all are on the same level.

 

Feb 10
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A VC Gets On Board with Profits, Not Revenues

By Start-Ups No Comments

I found this story from Fred Wilson, Union Square Ventures. I've always found his posts to be thoughtful and useful:

"I think that's an important part of the economics of the web that are left out of most discussions of Internet business models. Yes, we are turning analog dollars into digital pennies in many cases. But we are also doing the same thing on the cost side, maybe even more so. And I think that "operating leverage" is going to create a lot of value."Read the Whole Story at A VC, Jan 2009

Oct 13
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Start-Up Venture Funding 2009

By At Work, Venture Capital No Comments

From Techcrunch:

It looks like its going to be a tough 2009 for start-ups looking for an A or B round. Only 55 funds have raised capital, compared to 78 funds from a year ago. This will trickle down and offer less availability for younger companies looking to get their ideas of the ground.

See post from yesterday. Seek to prove your model on your own dime and with sweat equity. Then, seek expansion capital rather than proof-of-concept capital. Also, look to friends and family (maybe a rich uncle) that believes in you. Remember, at a start-up stage, most people are betting on the jockey, not the horse.

Sequoia-fundraising

Oct 12
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Fundraising: Plan B

By Entrepreneur Insights No Comments

Guy Kawasaki has an excellent post on Plan B: Another way to grow your company. Over the past few years, I've seen so many companies with stars in their eyes. I know what it looks like – I've been there myself. Somehow, the idea of a big round of venture funding solidfies their existence and proves that their concept is destined to be the next big hit.

It's very similar to getting signed on a major record label.

It is imperitive that the artist is solid and can make unbelievable music with or without the label. The label then ads the firepower to get the the next level. But if the artist is relying on the idea that the label is proof of their superiority, then the artist probably won't get traction.

It's the same with your startup. Struggle and fund it yourself. Fail fast. Understand that your model will change 2-4 times in the first few years. Commit yourself to persevere through the chaos and find a way, no matter what, to understand what the market is willing to pay for. Then, focus on developing a service or product that answers those needs better than others.

Kawasaki's best advice on this article: "Rather than trying to boil the ocean, try to boil a tea kettle." We've found that mantra to be true within TakeLessons. Rather than focusing on the entire world/country, we've targeted specific geographies. Rather than focusing on everything related to lessons, we've focused down on what we do best. This allows us to direct our strategy in the areas that will provide us a true competitive advantage. The truth is that we will never have enough time, money, human capital to do everything we want at all times. So the power of focus has proven to be an invaluable tool.

Aug 10
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Venture Hacks — Thoughts on Adam Smith’s Letter to Graduating Y Combinator Companies

By At Work, Start-Ups, Venture Capital No Comments

Venture Hacks has great commentary on Adam Smith’s letter to Y Combinator companies.

Y Combinator is a mini-incubator that focuses on getting very early-stage companies access to seed money, technical and business advice, and other things that help raise the probability of getting to market.

One particularly enlightening part of the post included the discussion of traunching. While I don’t know the correct definition, it seems a lot of term sheets are written with the ability for an investor to re-price their investment later. That would suck…

"Tranches are generally stupid. They have zero upside and catastrophic downside.At best, tranches give your current investors a right to invest at
yesterday’s valuation if your company is doing well. If your company is
doing poorly, your investors will figure out how to get out of their
obligation to invest."

Link: Venture Hacks — Thoughts on Adam Smith’s Letter to Graduating Y Combinator Companies.