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David Cummings on Startups

Recently, I was reading the limited partner quarterly updates for a fund where I’m an investor. In the update, the author highlighted that the fund had reviewed 1,000 potential deals last year and invested in four companies. At a ratio of 250:1, it’s clear that there are many more startups trying to raise a Series A than there are Series A investments (see the Series A crunch talked about four years ago).

Here’s how the investment process might work at a venture fund:

  • 250 deals reviewed
  • 25 one-on-one pitches (where the entrepreneur pitches a single partner)
  • 5 full partner pitches (where all the partners hear the pitch)
  • 2 term sheets
  • 1 investment

Raising money is much harder than most entrepreneurs expect. With funds seeing so many opportunities, but only being able to invest in 1-2 companies per year per investor, it’s clear that most entrepreneurs will feel rejected when out raising…

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2 Responses

  1. Startups Vie to Build an “Uber” for Health Care

    Heal is one of several startups putting a high-tech spin on old-fashioned house calls—or “in-person visits,” since they can take place anywhere.


    The services provide a range of nonemergency medical care—from giving flu shots to treating strep throats and stitching lacerations—much like a mobile urgent-care clinic.

    Dr. David Edward Marcinko MBA CMP™


  2. Scanadu

    Scanadu, a personal health scanner company that shattered records on Indiegogo a few years ago, has raised $6.5 million according to an SEC filing.

    The new funding comes at a time when the company is under fire for what many customers see as an unsatisfactory end to its FDA usability trial, as well as Scanadu’s elimination from the Qualcomm Tricorder X Prize.

    All these developments raise big questions about the future of the Silicon Valley-based scanning company, if not the future of the tricorder itself as a feasible commercial product. It seems clear that the company has had more trouble than it expected getting the go-ahead from the FDA. Whether the new funding will be enough to help the company surmount that challenge remains to be seen.

    Hope R. Hetico RN MHA


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