WI Watchlist: Foxconn Fund, UW Accelerator, MSOE AI Hall & More

… graduate and an entrepreneur and investor who served as a deal term partner at the Silicon Valley venture firm Andreessen Horowitz. In his new …

XconomyWisconsin

It’s time to catch up on Wisconsin innovation news:

—Jason Franklin will manage the Wisconn Valley Venture Fund, a $100 million fund formed last August by Foxconn Technology Group and three leading Wisconsin businesses and organizations: Advocate Aurora Health, Northwestern Mutual, and Johnson Controls (NYSE: JCI). Foxconn, a Taiwanese manufacturing giant, has said it’s building a massive (and controversial) electronics factory in southeastern Wisconsin.

Franklin is a University of Wisconsin-Madison graduate and an entrepreneur and investor who served as a deal term partner at the Silicon Valley venture firm Andreessen Horowitz. In his new role, he will split his time between Milwaukee and San Francisco, according to a press release. The fund will invest in early-stage startups located worldwide and developing products in healthcare, tech, manufacturing, and financial services, the sectors in which the fund’s backers compete.

—There’s a new startup accelerator on UW-Madison’s campus. The Isthmus Project aims to nurture and help commercialize innovations hatched at the University of Wisconsin Hospitals and Clinics (UW Health) and the university’s School of Medicine and Public Health. Rock Mackie, a serial entrepreneur and UW Health’s chief innovation officer, is leading the business incubator, which plans to help entrepreneurs—including faculty physicians, pharmacists, nurses, medical residents, and more—write business plans, access funding, and connect with industry experts.

The program’s name refers to Madison’s geography: the city’s core is an isthmus, or a narrow piece of land running between two bodies of water—in this case, lakes Monona and Mendota.

—EnSync (NYSE: ESNC) is shutting down. The Milwaukee-area maker of energy storage and power control products laid off “substantially all” of its employees and plans to file for receivership, according to a document filed with federal securities regulators on Tuesday. The move isn’t a big surprise, as EnSync’s business has struggled and the company said in February that if it couldn’t secure short-term financing, it would likely cease operations and file for bankruptcy. EnSync did secure funding—a $500,000 loan set to mature on Wednesday—but it seems the cash infusion wasn’t sufficient for EnSync to stay afloat.

—Gov. Tony Evers’s proposed state budget includes $15 million to support building a $100 million cancer research facility at the Medical College of Wisconsin, located near Milwaukee. The private college had requested $25 million in state funds, according to multiple local media reports.

—The Milwaukee School of Engineering (MSOE) said it has received more than $2.5 million from donors, including corporations such as Northwestern Mutual and Dedicated Computing, to name spaces and support programs at its planned computational science hall. The facility is expected to open in the fall and focus on artificial intelligence education and other emerging technologies. The center will be named after Dwight Diercks, an MSOE graduate and Nvidia executive, and his wife, Dian, who previously announced a $34 million donation to fund the project’s construction.

—The Badger Fund of Funds, a state-supported program that doles out money to seed new venture capital funds in Wisconsin, said it has selected the sixth and seventh funds it will back, and it doesn’t plan to invest in additional venture funds, according to a quarterly report recently sent to state officials. The organization didn’t name the sixth and seventh recipient venture funds, which are in the process of completing legal agreements.

The first five funds the Badger initiative has backed are the Idea Fund of La Crosse, the Winnebago Seed Fund, Rock River Capital Partners, the Bold Coast Capital Fund, and the Winnow Fund. Funds backed by the Badger group must also raise private capital. Idea Fund, Winnebago, and Rock River have closed their first funds, while Bold Coast and Winnow are still out raising private dollars, according to the report.

Jeff Engel is Deputy Editor, Tech at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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Female Founders Face an Uphill Battle. This Contest Wants to Give them $50K

According to First Round Capital, startups with a female founder or co-founder outperform all-male founder teams by sixty-three percent. Despite that …

Seventeen percent and three percent.

Those numbers reflect the percentage of startups that have a female founder and the percentage of all venture capital going to companies led by women.

Do women just have less interest in entrepreneurship than their male counterparts?

No—quite the opposite, in fact. Last year, the business planning and assistance nonprofit, SCORE, conducted research that showed female-owned businesses have increased by fifty-eight percent, and that women are now slightly more likely than men to start a business.

And women don’t just start companies.

They start successful companies.

According to First Round Capital, startups with a female founder or co-founder outperform all-male founder teams by sixty-three percent. Despite that success, female founders struggle to get funding—but one nonprofit is trying to make a dent in that.

Since 2012, Arch Grants has hosted a competition that provides $50K equity-free cash grants to startups with the condition that they relocate to St. Louis, Missouri. The results are impressive: More than ninety percent of the 134 Arch Grant Recipients are still in business today.

Though the competition is not exclusively focused on any one demographic, the organization is actively working on funding more female founders.

“One of our missions is to fund startups through our Global Startup Competition that are reflective of the community we serve,” said Arch Grants Executive Director Emily Lohse-Busch. “To be clear, we are not doing that to meet some sort of diversity quota. Research has shown that startups founded by a woman—and startups founded by immigrants, for that matter—are disproportionately successful.”

There is a reason for that.

“As a woman, I know I have to work to prove myself from Day 1,” said Megan McKissen, the former director of a startup incubator and now co-founder of communications firm McKissen + Company. “When you have to earn a seat at the table, what you do once you’re at that table has a good chance of being something pretty special.”

While Arch Grants is working to increase the number of female-led startups entering its annual competition, the organization has already funded some of the country’s most exciting female founders.

“Arch Grants helped us establish our business model and move our product into beta testing,” said Nadia Shakoor, co-founder of Argela Ecosystems. “Thanks to them, we were able to turn our research project into a viable company.”

The program has also helped female founders expand their existing startups.

“Because of the funding we received from our Arch Grant, we were able to hire two new account executives that supported our shift into agribusiness,” said Beth Handrigan, co-founder and CEO of Lean Media.

Of course, one organization will not break the glass ceiling that exists in startup world. In 2018, just seven percent of the partners at the top 100 venture capital firms in the country were women.

The barriers don’t end there.

A study by the Harvard Business Review found that the questions investors ask female founders make a difference. The HBR research found that female founders are frequently asked “prevention-oriented” questions around safety and responsibility, while male founders were more often asked “promotion-oriented” questions about hopes, goals, and achievement.

In other words, investors ask women questions about what could go wrong while asking male founders questions about what could go right.

It’s a process that lends itself toward biased funding decisions.

It’s also a process that drags down the economy by leaving talented, high-performing female entrepreneurs starved for capital.

No single organization will solve a problem that is ingrained in a society. However, collective action from several investors, VC firms, and organizations that support entrepreneurs will make a difference. In St. Louis, one organization is doing its part by making a push to increase the number of female founders entering its global startup competition.

The prize?

Fifty thousand dollars, a seat at the table, and the chance to do something pretty special.

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Bionano Genomics Enters Into Debt and Equity Financing Agreements Totaling $41.5 Million in …

The Company has entered into a Common Stock Purchase Agreement with affiliates of Innovatus, pursuant to which such affiliates purchased 406,504 …

SAN DIEGO–(BUSINESS WIRE)–Mar 14, 2019–Bionano Genomics, Inc. (NASDAQ: BNGO), a life sciences instrumentation company that develops and markets Saphyr, a platform for ultra-sensitive and ultra-specific structural variation detection in genome analysis, today announced it has entered into financing agreements totaling $41.5 million in debt and equity commitments from affiliates of Innovatus Capital Partners, LLC, East West Bank and Aspire Capital Fund, LLC.

Below is a summary of the foregoing agreements:

  • The Company has entered into a Loan and Security Agreement with an affiliate of Innovatus Capital Partners, LLC (“Innovatus”), and East West Bank. Innovatus has agreed to make term loans in the aggregate of $25.0 million available to the Company, with funding of $20.0 million expected to occur on or about March 22, 2019. The Company will be eligible to draw on a $5.0 million second tranche upon achievement of certain financial milestones. The Company intends to use approximately $11 million of the term loan proceeds to terminate its existing debt with Midcap Financial Services, LLC. In addition, Innovatus will receive 3.75% warrant coverage on each tranche of the term loan. Pursuant to the agreement, East West Bank has agreed to make a revolving line of credit of up to $5.0 million available to the Company.
  • The Company has entered into a Common Stock Purchase Agreement with affiliates of Innovatus, pursuant to which such affiliates purchased 406,504 shares of the Company’s common stock for an aggregate purchase price of $1.5 million. The Company also entered into a Registration Rights Agreement with the purchasers of its common stock to facilitate the sale and distribution of all or a portion of such shares pursuant to a registration statement to be filed with the SEC.
  • The Company has entered into a Common Stock Purchase Agreement for up to $10.0 million with Aspire Capital Fund, LLC (“Aspire Capital”). Today, Aspire made an initial purchase of 272,479 shares of the Company’s common stock for an aggregate purchase price of $1.0 million. In addition, Aspire Capital has committed to purchase up to $9.0 million of additional shares of the Company’s common stock upon the Company’s request from time to time during a 30-month period and at prices based on the market price at the time of each sale. There are no warrants, derivatives or other securities associated with this agreement. As consideration for Aspire Capital’s obligations under the Agreement, the Company issued 69,444 shares of its common stock to Aspire Capital as a commitment fee. The Company also entered into a Registration Rights Agreement with Aspire Capital that requires the Company to file a registration statement for the resale of the shares sold to Aspire Capital.

Additional detail regarding the foregoing agreements is set forth in the Company’s Current Report on Form 8-K, filed today with the SEC.

“Bionano’s technology for detection of structural variants in patients with genetic disease and cancer has the potential to simplify the current diagnostic odyssey and shorten the search for answers,” commented Claes Ekstrom, Managing Director at Innovatus. “We are excited to support Bionano’s quest to yield genetic information for patients that has long been unavailable.”

“Given management’s proven track record, attractive comparable valuations based on recent M&A activity, independent validation of the technology platform through publication in high impact journals, and continued progress in improving both cost and throughput of the system, we are very pleased to establish this long-term financial partnership and to support Bionano’s pioneering efforts in the field of digital cytogenetics,” said Steven G. Martin, Managing Member of Aspire Capital. “Through our diligence, we’ve come to recognize the significant limitations conventional technologies have in identifying large structural variants. We believe that Saphyr enables the elucidation of these genomic changes and their potential far-reaching impact on human biology.”

“The financing enables us to further develop our global commercialization strategy and enhances our ability to drive the adoption of the Saphyr system,” said Erik Holmlin, Ph.D., CEO of Bionano. “We are delighted to be partnering with Innovatus Capital, East West Bank and Aspire Capital. We are also pleased to have lengthened our current cash runway in such a capital-efficient manner.”

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Bionano Genomics

Bionano is a life sciences instrumentation company in the genome analysis space. Bionano develops and markets the Saphyr system, a platform for ultra-sensitive and ultra-specific structural variation detection that enables researchers and clinicians to accelerate the search for new diagnostics and therapeutic targets and is designed to drive the adoption of digital cytogenetics, which is a more systematic, streamlined and industrialized form of traditional cytogenetics. The Saphyr system comprises an instrument, chip consumables, reagents and a suite of data analysis tools.

About Innovatus Capital Partners

Innovatus Capital Partners, LLC, is an independent adviser and portfolio management firm with approximately $1.7B in assets under management. Innovatus adheres to an investment strategy that identifies disruptive and growth opportunities across multiple asset categories with a unifying theme of capital preservation, income generation, and upside optionality. The firm has a dedicated team of life sciences investment professionals with deep experience in healthcare, including life sciences. Innovatus and its principals have significant experience providing debt financing to medical device, diagnostics, and biotechnology companies that address unmet medical needs, improve patient outcomes, and reduce overall healthcare expenditures. Further information can be found at innovatuscp.com.

About East West Bank

East West Bank (NASDAQ: EWBC) is the largest independent bank headquartered in Southern California and among the 30 largest banks in the United States with total assets of over $40 billion. As the premier financial bridge between East and West, the bank focuses exclusively on the United States and Greater China markets and operates over 130 locations worldwide. Forbes has named East West Bank among the top 15 of “America’s 100 Best Banks.” For more information on East West Bank, visit their website at www.eastwestbank.com.

About Aspire Capital

Aspire Capital Fund, LLC is a Chicago-based, long-only investment fund focused on making open market and direct equity investments in publicly traded companies. Aspire Capital Fund, LLC is managed by Aspire Capital Partners, LLC.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “expect,” “plan,” “anticipate,” “estimate,” “intend” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) convey uncertainty of future events or outcomes and are intended to identify these forward-looking statements. Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the timing and receipt of the loan amounts from Innovatus; the anticipated use of proceeds from our financing activities; our ability to sell additional shares of our common stock to Aspire; the potential of our technology to simplify the diagnostic process; the anticipated benefits of the debt and equity financings summarized above to strengthen our ability to execute our strategic plan; and the impact of our products, including the Saphyr system, in advancing the field of genomic analysis. Each of these forward-looking statements involves risks and uncertainties. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include the risks that our sales, revenue, expense and other financial guidance may not be as expected, as well as risks and uncertainties associated with: general market conditions; satisfaction of the terms and conditions of the agreements described above, including financial milestones in our loan agreement; maintaining or increasing sales of our Saphyr system due to competition, unexpected adverse events, regulatory action and market adoption; and the risks and uncertainties associated with our business and financial condition in general, including the risks and uncertainties described in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2018 and in other filings subsequently made by us with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made and are based on management’s assumptions and estimates as of such date. We do not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190314005901/en/

CONTACT: Bionano Contact:

Mike Ward, CFO

Bionano Genomics, Inc.

+1 (858) 888-7600

mward@bionanogenomics.comBionano Investor Relations Contact:

Ashley R. Robinson

LifeSci Advisors, LLC

+1 (617) 535-7742

arr@lifesciadvisors.comBionano Media Contact:

Kirsten Thomas

The Ruth Group

+1 (508) 280-6592

kthomas@theruthgroup.com

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: TECHNOLOGY OTHER TECHNOLOGY HEALTH GENETICS RESEARCH SCIENCE

SOURCE: Bionano Genomics, Inc.

Copyright Business Wire 2019.

PUB: 03/14/2019 05:18 PM/DISC: 03/14/2019 05:18 PM

http://www.businesswire.com/news/home/20190314005901/en

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Oyo Rooms plans to tap venture debt route for fresh funding

Oyo recently raised a total of $1 billion in equity in a round led by SoftBank Group Corp. The round saw Chinese ride-hailing giant Didi Chuxing …

Bengaluru: Hospitality startup Oyo Rooms (Oravel Stays Pvt. Ltd) plans to tap the venture debt route to raise fresh funds as it seeks to double down on its Townhouse property vertical in India this year.

The company, which recently raised $1 billion in equity, is in talks with several venture debt firms and some of the top private banks to raise several hundred crores in debt financing, said three people familiar with the matter. The idea is to use the funds to buy properties for Oyo Townhouse, as the company looks to deploy its recently-raised equity for overseas expansion, they said.

Oyo, founded in 2013 by Ritesh Agarwal, is bullish on Townhouse, which was launched in January 2017. Townhouse properties, owned and fully managed by Oyo, have played a key role in improving the startup’s image with customers.

“When they started with the marketplace, they didn’t need any leverage at that point,” said a venture debt investor, requesting anonymity. “But once they got into Townhouse, there was a need for investing into the properties, which made them turn to debt financing.”

Oyo is not the only one to diversify its balancesheet with debt. This is a trend and several top startups in the Indian ecosystem, including Swiggy, BigBasket, and Byju’s, have turned to debt even while racking up millions in equity funding.

“For most startups, if they are only using equity capital to grow, it gets expensive,” said Vinod Murali, managing partner at venture debt firm Alteria Capital. “But with the larger startups, the idea of turning to debt financing would be more for a specific transaction—an acquisition perhaps or brand marketing or any situation where value is created ahead of assets,” he said. In February, e-commerce logistics firm XpressBees raised 35 crore in debt financing from InnoVen Capital.

Oyo currently operates 88 Townhouse properties in India. “We have worked with multiple marquee NBFCs and new-age financial institutions to supplement our strong balance sheet and help our asset owners gain access to affordable financing solutions. Oyo will continue to explore such options in-line with our financing strategy,” said an Oyo spokesperson.

Oyo recently raised a total of $1 billion in equity in a round led by SoftBank Group Corp. The round saw Chinese ride-hailing giant Didi Chuxing pumping in $100 million.

Oyo, which is present in 10 countries, recently committed to an investment of $200 million in its businesses in India and South Asia. The company says it is present in more than 259 cities in India, with over 8,700 buildings and over 173,000 rooms. The debt financing would play a significant role in expanding Townhouse properties in India, said the other person mentioned above.

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Meet Teppei Tsutsui, Managing Partner at GFR Fund

Teppei Tsutsui: We’re going to invest in emerging technology which disrupts the digital and entertainment space. We love to work with founders who …

Venture capital used to be a cottage industry, with very few investing in tomorrow’s products and services. Oh, how times have changed! While there are more startups than ever, there’s also more money chasing them. In this series, we look at the new (or relatively new) VCs in the early stages: seed and Series A.

But just who are these funds and venture capitalists that run them? What kinds of investments do they like making, and how do they see themselves in the VC landscape?

We’re highlighting key members of the community to find out.

Teppei Tsutsui is a Managing Partner at GFR Fund.

Tsutsui has led several key investments and acquisitions in Tokyo, including GREE’s acquisitions of OpenFeint and Funzio. He is currently leading GFR Fund in San Francisco.

Prior to working for GREE, Tsutsui was key to advising M&A strategy at Morgan Stanley, where his strength in the Asian market and as an investor grew. He also worked in Japan in business development at Mitsubishi Corporation. He earned a bachelor’s degree in Law from Hitotsubashi University and MBA from the University of Chicago.

VatorNews: What is your investment philosophy or methodology?

Teppei Tsutsui: We’re going to invest in emerging technology which disrupts the digital and entertainment space. We love to work with founders who understand the market, who are ahead of the social trends and who try to create new user experiences by combining existing technologies.

One example I can mention is Discord, a communication tool for gamers. If you think about communication tools, that’s pretty tech much old technology, dating back to Skype, but the founder of the company tailors it to the eSports audience, which was pretty new at that time. Now Discord is one of the biggest eSports companies in the world. So, we are looking for those kinds of new trends and combining them with existing technologies.

VN: What are your categories of interest?

TT: We look at spaces like VR and AR, eSports, live streaming, AI, blockchain. Those spaces that people call “emerging technologies.”

If you step back and look at the gaming industry as a whole, it’s actually been growing over decades, at the pace of 10 percent or more, and I think that’s driven by multiple things. One is that people are getting multiple touch points. For example, gaming has been really dominant in PC and also consoles, but now people are spending more time on their smartphones and now we have emerging technologies like VR and AR, smart speakers and smart TVs. With these multiple touch points I think people spend more time on the games, and time is money. So, these are trends we are seeing when we are looking at potential investment opportunities.

VN: What’s the big macro trend you’re betting on?

TT: One is the smartphone, obviously, and, over time, the smartphone allows for higher resolution game play, like with Fortnite. People can still play the same quality of entertainment experience, even on the smartphone, which they only used to have on a PC or a console. The other trend is the multiple touch points with the emerging tech technologies on those platforms. So, that’s the two big trends we’re looking at right now.

VN: What is the size of your current fund and how many investments do you typically make in a year?

TT: Right now our fund size is $20 million. We’re targeting 20 to 30 investments out of this fund, but we’ve only completed three so far.

VN: What stage/series do you invest in and how much is that in dollar amount for you?

TT: We primarily focus on seed stage, but we sometimes do pre-seed or Series A. Our typical check size is somewhere between $100,000 to $500,000, and we invest up to $1 million in a company over time.

VN: What kind of traction does a startup need for you to invest? Do you have any specific numbers?

TT: It’s hard to say there’s one common, specific number for all the businesses; it depends on the situation and also the market. What I love to see is that there’s a product, any playable product, and if there’s some sign of early traction that would be better, but it doesn’t have to be a revenue generating business yet. Product and early traction are most important.

VN: What other signals do you look for? Team, product, macro market?

TT: In terms of the founding team, there are few things that we like to see. People talk about product market fit but we like the founder market fit. So, if the founder has relevant expertise and experience in what they’re trying to do in their new venture, and if they have good connections to industry players, like potential partnership players, something like that. The second is if the team is working well; we don’t want to have three engineering founders, but more of a good combination, like one business, one finance and one engineering.

Third is that, honestly, we love to see the founding teams being really excited about what they’re doing. Last year, or maybe two years ago, we saw a lot of people working on blockchain, but we weren’t really sure if they were working on blockchain because they love it or because they wanted to make quick financing from investors. We love to see people who are really passionate about what they’re doing and there are lot of ways you can tell. What he or she has been doing in the past tells you what they want to do, and just letting them talk about why they’re pursuing this. You can tell from his or her face, or how they talk about it. It’s not really difficult, actually, to get to know why they’re doing this.

VN: What do you think about valuations these days? What’s a typical Seed pre-money valuation and Series A?

TT: It’s quite hard to justify the valuation in the early stage of the company, but, since we’ve been investing in the Valley since 2011, we have a good idea of what that valuation looks like at each stage, meaning pre seed, seed or Series A. We have some sort of guidance within us that, if the founder’s asking for this valuation that’s a little bit higher compared to the market standard, it definitely affects our decision to invest and we also negotiate sometimes too. Usually we advise founders to think about the fact that they can raise a high valuation doesn’t really mean that they’ll be successful at the next financing round. They might suffer from lack of interest because of the high valuation so there should be some balance that they’re thinking about. Higher valuation doesn’t always mean that it’s good for the founders or the existing investors.

VN: There are many venture funds out there today, how do you differentiate yourself to limited partners?

TT: Our first fund was focused on VR and AR, so we only invested in virtual and augmented reality. When we were thinking about the investment thesis for the second fund, we went back to our basics, because we all came from the gaming and entertainment industry, so why not do that? We actually don’t really see any other funds that are focused on the entertainment space, especially in North America, so that’s our leverage.

There aren’t other funds because a lot of investors are focused more on the B2B. They like enterprise businesses because it’s predictable and the market is growing, compared to B2C, where all the giant companies, like Google, Apple, Amazon, Facebook, can deliver their expertise, so there’s no space for startups. Our counterargument is that may be true in the past, but that might change in the future, because of the trends that I was describing, including new, emerging platforms. That’s our investment thesis; it may have been beneficial for the big companies in the last decade, but going forward there might be some chance for the startups to win. That’s what we’re betting on.

VN: Venture is a two-way street, where investors also have to pitch themselves. How do you differentiate your fund to entrepreneurs?

TT: It’s not something special, actually. We are from the game industry, so we speak the same language as the founders speak. We’ve been investing in the Valley since 2012, so we know a lot of the investors there, so we can bring in Series A investors or co-investors in the seed financing round, so that’s the second part. The third part is our connection to Asia; we have LPs mostly from Asia, they’re less financial investors and more like strategic investors, so we’re happy to bring them as potential partners or potential investors in our companies.

Japan is the country we have the most access to. We are an affiliate of mobile gaming company GREE, which is based in Tokyo, and have so many connections to all those traditional game players, like Nintendo and Capcom. We can bring those potential partners to our companies. Japan is often an early adopter or a test bed, so it can be a good place for early stage companies, where they can to try out some new technology. We also have access to Korean companies and Chinese companies.

VN: What are some of the investments you’ve made that you’re super excited about? Why did you want to invest in those companies?

TT: We invested in three companies; one is still under embargo, so I can’t talk about it right now, but I can talk about the two other companies.

One is FanAI, which is an audience monetization platform for sports and eSports teams. Usually, eSports team get the majority of their revenue from sponsors, and the FanAI platform allows them to maximize monetization from brands as a sponsorship. We are excited about this investment; Johannes Waldstein, the CEO, has been in the analytics industry for a long time, and he found out that the market for eSports is still premature, so there should be some chance for creating a big business in the market. We love their vision and we also the teams he can bring together. We’re really excited about working with them.

The other is ProGuides, which is also an interesting company. They are creating a video platform for people to connect and also learn, so the pro-gamers can explain and offer training on video and users can watch and learn from it. They can also learn from other people too. They launched the app in January and it’s been growing really fast, so it proves that there are so many people who want to potentially to be customers of the product.

VN: What are some lessons you learned?

TT: The founding team is the most important factor because a company will fail if the founder gives up. It comes back to your question about we select the founders we invest in; if the founder is passionate about what he or she does, there’s less chance he or she will give up. So, the team is the really important factor for the company to be successful. That’s the key lesson I’ve learned from my experience,

VN: What excites you the most about your position as VC?

TT: I read a book after college called the eBoys, which is about Benchmark Capital. That was so fascinating that I saw that this is the job I wanted to do. Maybe 20 years after, I joined GREE and I’ve been investing on behalf of companies since 2011 in Tokyo, and then I moved to the U.S. five years ago to start investing in startups in the Valley. I’ve had investing experience over a decade now. This is the job I wanted to do, and here I am, so I’m excited to be working as a VC. Day to day, what I like about it is you meet new people, you meet people who are passionate about really different things. You can learn from them. Those founders are trying to change the world and you can be a part of it, so that’s really fascinating to me.

VN: Is there anything else that you think I should know about you or the firm or your thoughts about the venture industry in general?

TT: One thing I will add is that we looking for founders with experience outside of traditional entertainment. With the advancement of technology, anybody can create a new experience for users, so anyone who has a really interesting idea, we’d love to talk to them.

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