Congratulations, Dustin, Jesse, BuildingConnected - And Autodesk!

Today, it was announced that BuildingConnected, a Bee Partners II portfolio company, has been acquired by Autodesk. This means a Q1 distribution event for our LPs. And, of course, it's a big win for everyone involved, especially Autodesk, which now has access to brilliant Co-Founders Dustin DeVan and Jesse Pedersen and to a market network technology that connects two sides of the unstoppable construction industry. Read more at Forbes.

Autodesk knows that tomorrow’s companies must have data at their core. That’s exactly what BuildingConnected represents within the construction industry. They’re an at-the-edge messaging platform for sub- and general contractors that simultaneously amasses data for actionable insights and revenue opportunities.

When we first met Dustin and Jesse, they represented exactly the dynamic duo we look for in a founding team, with Dustin's problem-Founder fit and Jesse's measured approach to building the solution. Their deep partnership, a myopic focus on the problem, and self-confidence in their potential as a team and an organization have brought them to this moment.

As we do for all our portfolio companies, Bee avidly engaged in making valuable introductions on BuildingConnected's behalf from day one. Looking back through years of correspondence this morning, I see the scores of customers, service providers, and investors we connected them with.

We were a smaller team then. As we've doubled in size and further proceduralized our approach, we know this is the right way to support Founders toward success. We also know we can do at least twice as much on behalf of our portfolio companies as we did for Dustin and Jesse.

Through BuildingConnected, we built relationships across several new investor groups with whom we celebrate today. And our network of bench participants rallied to support, including Founders within the portfolio that offered their time for reference and diligence calls.

A massive thank you to Dustin & Jesse. This morning I listened to a conference call with Dustin from early 2016 (ping us for replay info). With his usual good humor, he recalls his first failures and the long nights that led him to establishing a successful venture. He serves as a guiding light to the 40+ Founders in our existing portfolio and those to come.

See the stories here:

Forbes

Fortune Term Sheet

TechCrunch

Nasdaq

VentureBeat

MarketWatch

StreetInsider

Global Construction Review

Always Be Refining: For our LPs, Our Companies and Ourselves

Some say it takes five years and twenty million dollars to train a venture capitalist. This last quarter, I crossed that five-year mark. And while I’m not sure about that $20M number (my learning curve is still vertical when it comes to fund management, board responsibilities, and relationship management; perhaps it always will be…), one thing I’ve definitely learned is that “becoming” a VC is just that: an ongoing becoming, a journey, a continuous hypothesis test.

To that end, I host a quarterly roundtable session with fellow next-generation VCs on becoming a better board member. These “get-real” gatherings bring together diverse members of our early-stage investment community who I trust to share best practices, discuss lessons learned, and provide objective feedback.

So far we’ve covered:

  • Building the right option strategy: Finding the right balance between dilution and having the assets to attract talent is critical at the early stage. What are best practices? What are the consequences at the next round of funding?

  • Applying a legal prism to supporting early-stage companies: Board members have a fiduciary duty to our LPs. How do we help from a legal perspective with issues such as planning for the long term and assessing disputes as the team grows?

  • How to best prepare for and engage in early-stage (often working) board meetings: Board basics with a twist: How to be effective when teams are small and the future is (or seems) wide open.

We’ve drawn from our Bee bench of trusted advisors to get the best content for these meetings, which, so far, have been led by our long-time attorney, by an experienced angel investor, and by a many-time early-stage board member. One of our trusted advisors will be leading the next meeting on the psychodynamics of early-stage boards.

Would you or someone you know benefit from attending? Do you have other topics that we should cover? Want to chat about why we take board seats at inception? Hit reply, email me at garrett@beepartners.vc or call me at (208) 860-7855.  I’ll be around for the next five years.

Summer Internship and Striking Gold

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Written by: Lucie Bardet

When I announced to friends that I would be spending my summer working for a venture capital firm, they seemed surprised. The role didn’t match the liberal thinking that I usually live by. But I was the first one to realize that I did not appreciate the full scope and breadth of venture capital activities. Indeed, when I first contacted Haas alumna Kira Noodleman to understand what a venture capitalist investor does, it was her obvious passion for her work that got me more and more intrigued by the startups and VC value chain. Embracing my full-time internship this past summer at Bee Partners as a summer associate, I realized the diversity of thoughts and missions that VCs can hold, and that managing a venture capital firm is much more than investing in cool companies and improving your profile on the market. Being a venture capitalist is about self-assessing, doing due diligence, and supporting your portfolio companies. Venture capital is not about making quick money; it is about a long-term commitment and an engagement in ideas that you think worthwhile.

A few key takeaways from my time at Bee.

Continuously self-assess. What impressed me this summer was the constant self-reflection and critique that everyone on the team engages in, along with the constructive feedback exchanged weekly and throughout the year during workshops and sprints. I had the chance to participate in a positioning workshop which triggered passionate discussions about the fund’s objectives, organization, and strategy, and where everyone pushed back and was listened to and challenged. As a startup itself, Bee grows, evolves, and matures, yet never takes success for granted nor rests on its laurels. This mindset pushes the team to explore new areas of investment beyond their current knowledge base. One of my biggest tasks this summer was to write investment recommendations in the health care sector. Despite a strong education and 7 years working in the biotech and health care sectors prior to starting my MBA, my self-assessment revealed that my knowledge of the U.S. healthcare system was limited to FDA and regulatory affairs as applied to big corporations. I knew little about health care startups. Working at Bee, I had the opportunity to attend more than 20 events in the field, from coast to coast. I met researchers, faculty, and startup Founders, and felt the amazing energy and innovation that emanate from the Bay Area.

Diligence is due, not optional. More importantly, diligence does not only cover the companies we want to invest in; it includes all the people we seeded in the past and potential investment areas going forward. It’s about networking and finding the partners who will later support the Founders. It’s about finding new limited partners to raise a future fund. It’s about finding future market disruptors and making them allies rather than enemies. This summer I was able to apply my extensive science and engineering background to the due diligence process while developing new networks and networking skills.

Know what you are looking for. Venture capital is a long-term game. It is not only a one-time check to promising Founders; it is building a relationship for years and years and years. It involves maintaining a philosophy in a segment you understand and in which you can support your Founders as well as adapting to new tech (r)evolutions, management practices, and legal or geographic opportunities. I had the opportunity (yes, the opportunity) to screen more than 500 startups this summer, and to reply to every single one of them. Believe me, this meant saying “no” a lot. Although most Founders are passionate about their ideas and have well-thought-out plans, a disciplined investor has to be able to say “no” often in order to say “yes” to companies that match their objectives, knowledge, and abilities. In such a competitive environment, with relatively low barriers to entry and where dozens of VCs emerge each year, specialization and domain knowledge are key to a VC firm’s success. Because when you know what to invest in, you are better able to support your portfolio companies with the resources they need, meaning the survivorship of your portfolio is the survivorship of your fund, too.

Be a great partner for your limited partners and your Founders. This summer, I learned that the most challenging and interesting part of the business is serving as the mediator between your investors and your investments. You need to understand and serve them both, and your objective as a firm is to bring this win-win-win situation to life. Of course, it’s harder in real life than on paper. I got first-hand experience with this balance by drafting an investor deck intended for LPs and writing a report about compensation allocation trends for our Founders. The report was written after we surveyed our portfolio companies and was meant to provide them cues about both the amount of equity and salaries in cash that Founders and different employees receive from the inception of a company to a series B.

I was glad to work in a young fund and experience both a startup and a VC environment this summer. I am grateful to have worked closely with Garrett Goldberg, Tim Smith, Kira Noodleman, and Michael Berolzheimer, who supported me while allowing me a degree of freedom in decision making which I didn’t expect, coming, as I did, from a different field and a different culture.

After this summer, becoming a VC is more appealing than ever. Of course, investing in and working with talented entrepreneurs who want to change the world while being financially successful seem compelling. And as I drove across the country after my internship and experienced the breadth of American history, I realize that this country has a unique mindset, which runs in parallel to startup Founders and, even more specifically, to Silicon Valley. Like the Forty-Niners who ventured farther and deeper into new country, into new rivers, and in colder waters in search of the precious stone, there is a large amount of hard work and luck involved in VC. But the smartest and hardest working adventurers learn how to position themselves to strike gold.

Patience Pays Dividends: Four Recent Success Stories

Neither venture investing nor startup is for the faint of heart. A lot of people think that’s because of the spectacular rises and falls we read about in the headlines (electric scooters! ICOs!), and there is a certain roller-coaster aspect to the squiggly line that is entrepreneurship.

But the real test we’ve discovered is about patience. Phenomenal patience for the plain and simple work that needs to be done every day when you’re building a foundational company.

It’s our privilege to support the brilliant, hardworking makers who lead Bee portfolio companies through their daily paces and stay out of the sensational and distracting headlines. They make incredible progress building success in their verticals and moving toward truly changing the world (no, really).

Their hard work and progress also augur significant return for the LPs who have joined us in supporting them.

In the past, we’ve shared successes with you from Skycatch, TubeMogulBuildingConnected, and Tradesy. Here are four more examples of recent progress in the portfolio, each company on the cusp of accelerated growth at scale.

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Real-time analytics to transform battery data

Six months ago. Two words: Promising and brainy. The company had promising engagements with large enterprises and a brainy emphasis toward lab thinking.

Today. Big-name clients increasing in volume and number, expanding Voltaiq’s global presence. New product innovations to future-proof the offering.

The world after Voltaiq. Consumers will have a stronger perception of battery safety and reliability. Commercial and industrial systems will experience lower friction and lowered cost through predictability.

Influencer marketing platform for brands

Six months ago. One-product pony with financing risk and customer concentration. Encouraging progress but in a highly competitive market.

Today. Three of the top 10 brands in the world use Sideqik, with more to come.

The world after Sideqik. Right now, 32 percent of internet users have ad-blocking software. Great for the browsing experience but an absolute sinkhole for billions of ad dollars. In the world after Sideqik, big brands’ messages will be carried via the trusted emissary of the influencer directly to the end user.

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Building LinkedIn for the local economy

Six months ago. Small employers and Bay Area job seekers loved it, but its scale was limited.

Today. Available nationwide, with large employers adopting the product.

The world after Localwise. For employers, their selection of talent improves through better data and filtering. For employees, “job-hopping” gets radically reinterpreted as a linear narrative of related experiences pointed toward success.

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Managing data and facilitating access to accelerate the clinical trials process     

Six months ago. Users numbered ~1,000 across cancer hospitals and researchers. Not bad, but a lack of network density and sponsor usage threatened company growth.

Today. 3,000 research teams, one out of every five cancer researchers, and 600 studies are on the platform. That’s right: one out of five cancer researchers.

The world after Florence. In a future when all cancer trials use Florence, a 30 percent increase in clinical trial studies will be possible. There’s no telling how many thousands of patient lives could be saved by the data efficiency.

We’re excited to imagine the world Bee portfolio companies are hard at work making. It’s a world less reliant on fossil fuels. One where companies redirect ad dollars to better use, where job hunters find great jobs faster and through their community, and where clinical trials are accelerated. And that’s just four examples out of more than 50 portfolio companies.

Do you have connections in large OEMs that rely on batteries, brands worth $1B+, employers desperate for talent, and/or pharmaceutical companies engaging in clinical trials? Get in touch and we will connect you to our hardworking Founders. Hit reply, email me at michael@beepartners.vc, or call me at (415) 519-4707.