2018 Anorak Partner Meeting Slides

On April 6th 2018, we held the first Annual Partner Meeting for Anorak Ventures. We kicked things off with a presentation about the macro climate of venture, followed by an update on the fund. A lot of work went into gathering the information, so I figured I’d share it with anyone interested.

As with all statistics, you can make them say what you like. We tried to hone in on a few trends we believe are important to consider when making investment decisions for the year ahead.

Hope you find the slides and talking points interesting!

Me kissing up to my LPs for believing in us and our mission

Me kissing up to my amazing sponsoring for supplying the space, food and drink

Quantity of venture deals staying the same, but dollar value increasing due in part to increased number of late stage mega-rounds

Last 10 years, North America accounts for 61% of all venture deals cumulatively. Over the last four years, Asia has shown a substantial increase in activity, even surpassing the US at times.

No surprise that the majority of activity is tech, but there has been an uptick in biotech the last few years

Substantial increase in CVC activity. 75 of Fortune 100 companies are active. This is due in part to substantial cash reserves and the desire to find innovation through strategically relevant investments

On the exit side, global acquisitions have seen a substantial slowdown. Great report here from Deloitte on M&A trends. “… economic uncertainty, capital market volatility, deal valuations, and interest rates ranked sequentially as the leading obstacles to M&A activity by corporate and private equity respondents combined”. “Over the past two years, 65 percent of corporate respondents said their cash reserves have increased (up from 58 percent), and the primary intended use of that cash is for M&A deals.”

Cross border acquisitions and investments largely down partially due to the protectionism of the current administration. Exemplified by the CFIUS rejection of the Broadcomm/Qualcomm acquisition.

Expecting the delta to decrease over the coming decade as mega technology companies emerge outside of the US.

Original thesis of the fund. 26 investments and 20 months later…

Adding these additional points we’re looking for.

Total deployed is $3.8M since Sept 2016

Expect greater diversification in the year ahead

Expect greater diversification in the year ahead

Post-money valuations, not including follow on funding

Why I invested in Lightform

Chances are you’re reading this on a screen shining light directly into your eyeballs. Whether LED, LCD, or OLED, these are all emissive displays which work by shining light through various filters, and pushing photons directly to your retina. This can be harsh and is different from how we naturally see the world, where light reflects off objects and into our eyes.

According to a recent study by Neilsen, the average American spends 10+ hours a day in front of a screen. The short term effects range from eye fatigue to sleep problems and we’re only beginning to understand the long term effects.As technology continues to work it’s way into every corner of our lives, we will need to find new ways to interface in a more natural way.

Voice is one area that I’m particularly excited about (see blog post for Future of Sound event). However, just as illustrations can supplement speech between two people to convey ideas, the same is true with graphics + voice compute. For example, if I ask Alexa the weather it may be easier to see a simple graphic showing the 5 day forecast, then to hear it aloud. This idea of the power of graphics + voice is why I was so excited when I met the team at Lightform.

The founders are a group of technical PhDs and creative wizards that have created a hardware/software solution for projection mapping. Previously working at companies like Microsoft Research, Disney, Adobe, and IDEO, they come from diverse and highly capable backgrounds. When paired with a projector, lightform allows users to map out a space and overlay light to create amazing results.

I’ll be the first to say, I’m a sucker for a good demo! It not only helps me understand the product, but demonstrates that it works and founders can execute. Go figure, a bunch of ex-Disney guys didn’t disappoint! The most memorable demo came when Brett Jones, CEO of Lightform, asked Alexa to call an Uber.

I do this all the time and my usual MO post-request is to pull out my phone and see where the Uber is. In this case, Lightform produced an unobtrusive UI element on the wall showing the pertinent information for the uber request including eta, map and car information. Brett explained that Alexa communicated the request to Lightform, which was paired to a small laser projector across the room. The software then pulled out the pertinent details and determined the best location, size and color for a UI element to appear in the environment.

Video projectors continue to increase in quality while decreasing in size and price driven largely by advances in mobile phone technology. Brett and I discussed what the home of the future could look like, with very few screens and UI elements appearing on demand using Lightform technology enabling you to easily interact with your home.

I find myself using my Alexa more and more everyday. The notion that Alexa, or any voice compute device, could supplement its output with unobtrusive, dynamic graphics using Lightform is incredibly exciting to me. Sometimes when I meet a founder or demo a product I get the feeling I’m looking at the future. This was certainly one of those times!

(Lightform funding announcement here)

Areas of interest for Anorak Ventures

There are several themes I’m currently excited about investing in. In an attempt to attract founders working in these areas and garner alternative perspectives, I decided to put together the following post. Any and all feedback is welcome and if you’re early-stage company working in an area outlined below, please get in touch.

1. Augmented Reality 1.0 — While the notion of a fully capable and ergonomic headset is appealing, I don’t believe it’s happening anytime soon. We’ll get there, eventually, but in the meantime there are interesting opportunities in AR 1.0. For example, a pair of glasses with an integrated speaker, microphone, and bluetooth connectivity combined with a voice assistant can provide all kinds of location based notification capabilities. Amazon, Google and anyone else working on a voice assistant would ultimately benefit from such a device (rumors are Amazon is already working on this) but substantial brand value can be gained today figuring out the hardware, style, battery life, audio and user experience. Building out a user base and loyalty with a product like this would put the right company in a strong position for the future of AR.

2. Anything but emissive displays — Chances are you’re reading this post on a screen beaming light into your eyeballs. Whether LED, LCD, or OLED, these emissive (or backlit) displays work by shining light through filters, and directly into your retina. This can be harsh and different from how we naturally see the world, where light reflects off objects and into our eyes. The short term effects range from eye fatigue to sleep problems and we’re only beginning to understand the long-term effects. We will need to find new ways to interface with technology. Voice is certainly one alternative as is reflective display technology. Common examples are e-readers where an external light source reflects off the screen and into your eyes, just like print. Refresh rates and color have historically been a problem limiting usage to basic reading, but there are companies like Halion Displays are developing reflective displays capable of rich video and color (I’m an investor). As there is no backlight, reflective displays are also far more energy efficient. The long term vision being that reflective displays with resolution and color that match print and refresh rates that match emissive monitors will provide a more natural and comfortable experience.

3. Repetition by robotics — In 1589 Queen Elizabeth refused to grant a patent for a mechanical knitting machine out of fear of putting thousands of knitters out of work. The same fear exists today around robotics but has been proven incorrect time and time again. In fact, robots completing repetitive, at times dangerous tasks, helps drive innovation in new areas better fit for the creative, intelligent human mind. One such company working in the space is Dishcraft Robotics, a company building robotic equipment for commercial kitchens enabling more efficient, hygienic and humanizing operations (Also an investor). They’re largely in stealth at the moment but big things are on the horizon for this company. At the moment, I’m particularly interested in companies building robotic solutions in the areas of sewing and environmental scanning.

These three themes are active areas of interest but I’m also excited about many other topics. If you’re building a company around defensible, innovative technology and would like to talk, please drop me email me greg at anorak dot vc.