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Interested in VC Funding? These 4 Statistics Tell You Exactly What You Need to Know.

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If you’re looking for venture capital (VC) this year to fund your startup, you need to know the direction of the current market: For the past several years, the total dollar amount of VC given to startups has increased significantly, with venture capitalists showing increasing interest in new technologies and potential “unicorns” that could be valued at a billion dollars or more.

What else do the latest statistics indicate about the state of the VC world, and what can you do to make the most of it? Check out these four important statistics:

1. Total VC funding dollars are down 11 percent.

VC rates exploded in the early 2010s. Starting in 2010, that year’s first quarter showed less than $15 billion in funding, with around 2,500 VC deals closed. Then, in the second quarter of 2016, the VC market — at its peak — closed 5,500 deals and funded $45 billion.

Some economists have speculated that this surge represented just the middle step of a larger run of upward momentum. Others called it a sign that the tech industry was in a valuation bubble, and the bubble was about to burst.

Neither view seems to be the case: 2016 was clearly a peak, but one that only slowly has started to calm down. When you compare Q2 2016 (the clear peak) to Q2 of 2017, for example, the total dollar amount of funding given fell 11 percent, to $40 billion. The total number of closed deals similarly fell slowly, from around 3,700 to fewer than 3,000.

Compared to the peak of total closed deals, in Q1 2015, that’s a fall of nearly 43 percent.

2. The median deal size, globally, is now $10.8 million for late-stage VC.

Deal sizes have increased steadily since 2010, when the median sums offered were $0.5 million for angel/seed-funded companies, $2.5 million for early-stage VC rounds and $5.5 million for VC rounds.

Contrast those numbers with 2017, when median figures had increased to $1.0 million for angel/seed-funded companies, $5.0 million for early-stage VC rounds and $10.8 million for large-stage VC rounds. Those numbers represented a doubling or a near-doubling in all three categories.,

When you break down the funding by series, the difference is even more pronounced, with the median Series A funding amount rising from $2.5 million in 2010 to $6.0 billion in 2017; and series D (and later stages) rising from $12.0 million to over $40.0 million, thus more than tripling.

These increases indicated that VC funding is gravitating more toward bigger, more stable, more promising deals and away from smaller, riskier ones.

3. Unicorn valuations are being inflated by 50 percent.

Recent research by the University of British Columbia and Stanford suggests that on average, today’s unicorns (private companies valued at $1 billion or more) are being overvalued by 50 percent. The research looked at current valuations for 135 U.S.-based unicorns, 15 of which, amazingly enough, were valued at a price 100 percent or more above their fair market value.

The research compensated for factors like distinctions between common and preferred shares, riders, cash flow, control rights and IPO return guarantees.

So, what does all this mean for the world of VC and VC hopefuls? It’s further evidence that our startup valuations are unjustly inflated, and that unicorns aren’t really as common as they seem to be.

These valuations also indicate that the possibility of becoming a unicorn, at least in name, is higher than it should be.

4. VC funding for AI and machine learning has nearly doubled.

In 2017, VC investors poured more than $10.8 billion into startups that focused on artificial intelligence (AI) and machine learning. Compare that to just $5.7 billion in 2016, and only $500 million back in 2010.

Companies from all over the world, including NIO (in Shanghai), Face++ (in Beijing), Sensetime (in Hong Kong) and Indigo (in Boston) each received hundreds of millions of dollars in funding for autonomous vehicle research, facial recognition technology and AI-driven tech for agricultural sustainability.

Obviously, AI has become a hot-ticket investment platform for VCs everywhere, which means that any startup you attempt to create with a machine learning foundation likely has a higher chance of getting funded.

So, what other VC trends are “hot” in 2018? If the current pattern continues, we’ll see:

  • an even bigger decrease in the number of deals and the total dollar amount funded (though not to the extent that the market could be considered a “burst bubble)
  • growth in the median deal size across all funding rounds
  • growth or stability in overvalued unicorns
  • even more funding for startups focusing on machine learning and/or AI.

It’s still an exciting time to be a startup tech entrepreneur, all right — though the dynamics are changing. But if VC is the direction in which you’re headed, you should stay up to date with the latest trends, and position yourself accordingly.

A daily source of inspiration and information, Entrepreneur.com fuels the spectrum of game-changers that define what it means to be an entrepreneur today. That includes business leaders who launched something from nothing, content creators in the social influencer space, athletes pushing the boundaries of performance, and internal thought leaders innovating inside major corporations. Entrepreneur.com offers strategic insights and how-to guidance for the people that make things happen.

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Unilever Turns Up the Heat on Facebook & Google Over Tech’s ‘Unintended Consequences’

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Unilever has issued a stern warning to digital platforms including Facebook, Google, and YouTube: do more to improve transparency and clean up the “swamp” of fake news, exploitative, and socially divisive content, or be cut off from its multi-billion dollar digital advertising budget.

CMO Keith Weed recently spoke at the Interactive Advertising Bureau’s annual leadership meeting held in Palm Desert, Calif. CNBC quotes him as saying, “We need to redefine what is responsible business in the digital age because for all of the good the tech companies are doing, there’s some unintended consequences that now need addressing.”

Two of the most important consequences being referred to include the threatening of safety of users, especially young children, and loss of trust by consumers and companies at large.

While it’s unlikely that Unilever will turn its back on the two largest digital platforms, Weed’s words matter because of the sheer amount of ad budget Unilever holds across its portfolio brands. MediaPost reports that in 2017, the company spent approximately $9.8 billion on marketing and advertising, a quarter of which went to digital.

Beyond the public denouncements, Unilever is also working with IBM to develop a blockchain with which the company can more effectively reduce ad fraud via a record of what media is purchased and how it is delivered.

A separate MediaPost article shares YouTube CEO Susan Wojcicki’s response to Weeds comments on Monday. In her own statement at Recode’s Code Media conference, she assured,
“We want to do the right set of things to build [Unilever’s] trust. They are building brands on YouTube, and we want to be sure that our brand is the right place to build their brand.”

Recent efforts we’ve seen in support of this include significant updates to its Creator Program policy. Further, in light of the recent Logan Paul controversy involving a video in which a suicide victim was filmed inside a Japanese forest, the company has suspended running ads on his channel, per Ad Age.

While brand safety is a concern on the minds of many marketers, Unilever’s public comments this week indicate that brands are viewing the issue with a much broader lens, and seriously questioning the role these platforms play in people’s everyday lives, beyond the world of advertising. In this important cultural moment, people are looking to brands and platforms to assume responsibility and be proactive to keep their spaces safe, trustworthy, and suitable for communities.

To further explore the overarching question of how technology, including digital platform giants, can be used to bring us closer together versus further apart, join us at SMWNYC April 24-27. Register today and save 20%.

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Facebook’s Next Step in Building Community: $10M in Grants

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Facebook has made several important announcements as of late the support its mission to create more “meaningful communities.” The latest? Investment in a newly announced Community Leadership program designed to support its community-building leaders through a variety of residency and fellowship opportunities that offer training, support, and funding.

Here’s how it will work: Facebook will name five “community leaders in residence” and provide up to $1 million each to fund their proposals, in addition to providing them with the opportunity to attend a customized leadership development training session.

Moreover, Facebook will select 100 individuals to join its fellowship program and receive up to $50,000 each for a “specific community initiative.” They’ll also participate in four in-person gatherings during which they will have the chance to meet and collaborate with other fellows.

Another key initiative in the works? Expanding Facebook’s “engineering team for community safety,” which is headquartered in London. In particular, the company hopes to double the number of employees focused on such efforts including detecting and stopping fake accounts, protecting people from harm (e.g harassment and scams), and making it easier to report content, by the end of 2018.

Further, Facebook outlined new tools for group admins, including page personalization options (e.g. color and the ability to pin announcements to the top of the page), the ability to create and share group rules; and more features to monitor Group Insights.

Outside of its Communities Summit, but along the theme of ensuring time on the platform is time well spent, the company also confirmed last week it was testing a downvote button that would allow users to provide feedback on comments in particular. The downvote button is being tested within a limited group of U.S. users for the time being.

This is not to be confused with a “dislike” button, but rather a more “lightweight way for people to provide a signal to Facebook that a comment is inappropriate, uncivil, or misleading”—this according to a Facebook spokesperson quoted in TechCrunch.

Here is what the button looks like in action:

Image via TechCrunch.

As the screenshot depicts, the user will have the ability to select whether the post was found to be “offensive,” “misleading,” or “off topic,” the choices aimed to help guide Facebook’s course of action with respect to the particular piece of feedback.

Forbes adds that, the downvote option in its test mode only applies to public posts as opposed to Group posts or the Pages of public figures. It also doesn’t affect the ranking of the post and the number of downvotes a post gets won’t be publicly shared.

These initiatives by Facebook to reverse some of the negative perceptions of its role in society come at a critical time as brands and citizens alike are putting more and more pressure on the world’s leading tech platforms to course-correct their products for the safety of their users. Just this week, Unilever threatened to yank ad dollars from Facebook and Google due to the company’s growing dissatisfaction with their overall impact on society.

“We cannot have an environment where our consumers don’t trust what they see online,” stated Unilever CMO, Keith Weed, to the BBC.

Learn about Facebook’s increasingly complex role in society by joining SMWNYC April 24-27. The conference will offer multiple sessions designed to explore where brands and platforms fit into tech’s future in our world. Register today to secure your pass.

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5 Ways Cryptocurrency Can Help Entrepreneurs in 2018

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Cryptocurrency has revolutionized the way we transact value, invest our savings and raise capital with its decentralised digital cash system. Blockchain technology is a once-in-a-lifetime invention; never before in history have we been presented with such a breakthrough in financial technology. In 2018, entrepreneurs are well positioned to become early adopters of blockchain technology.

1. Raising capital

Cryptocurrency has disrupted the way early stage companies raise capital. With initial coin offerings, startups around the world can raise money quickly and cheaply from a wide pool of global investors. The valuation of a company is almost immediately reflected by the market, a process that has traditionally been challenging for early stage businesses. Shares are issued as tokens and tradable almost immediately, bringing large amounts of liquidity to the company.

Related: IPOs Are Boring But You Must Keep an Eye on These 9 Initial Coin Offerings

This new approach to raising capital has changed the world and enabled the best technical talent to build their companies at high speed. In 2014, a teenager from Canada called Vitalik Buterin raised money for his startup, Ethereum, through an initial coin offering. He wanted to improve on Bitcoin’s blockchain and create a platform for people to build unstoppable applications. With just a whitepaper and a vision, he was able to successfully raise $18 million for his new blockchain, which was valued at over $100 billion as of January 2018.

2. Transacting value

Cryptocurrency enables us to transact value between peers without a centralized authority. It provides a cheaper, faster and more efficient alternative to traditional payment networks. As a company, accepting cryptocurrency payments is becoming increasingly efficient, saving on fees and bringing faster settlement. Soon, startups will no longer need to go through the long process of setting up a business bank account to receive and distribute funds. In 2014, Overstock.com became the first retailer to accept bitcoin, receiving over 800 orders worth $126,000 in bitcoin in the first 22 hours. It has since amassed a $403,000 portfolio of cryptocurrency.

Related: 5 Essential Podcasts for Entrepreneurs Serious About Cryptocurrency

3. Investing for the future

For entrepreneurs, cryptocurrency may be the investment opportunity of a lifetime. Never before in history have retail investors had investment access to high growth early stage companies. Traditionally, venture capital funds and private angel investors have held monopolies on access to investment in the world’s best technical talent. Cryptocurrency provides a gateway for anyone in the world to invest in the world’s most exciting technology, allowing retail investors to own a basket of high growth companies. For example, through the decentralized method of blockchain investment, teenager Erik Finnman was able to invest in Bitcoin in 2011, becoming a Bitcoin millionaire at age 18. These types of investment stories would not be possible with traditional private venture capital fundraising.

Related: Why You Can’t Afford to Ignore Cryptocurrencies and Blockchain Anymore

4. Developing on the blockchain

The blockchain offers powerful infrastructure for companies to run their technology and create entirely new business models in a trusted way without a centralized authority. Blockchain technology is already revolutionizing the way startups create value. The Ethereum platform allows companies to build unstoppable blockchain applications quickly and for free. One example of a company leveraging the Ethereum blockchain is OmiseGO, a payments company that is using blockchain to provide banking services for the world’s 2 billion unbanked population. Blockchain technology is a cost-efficient way of building decentralized applications that can scale to a global population.

Related: 6 Cryptocurrencies You Should Know About (and None of Them Are Bitcoin)

5. Joining the blockchain community

The blockchain community offers access to some of the world’s best entrepreneurs, who are actively investing, advising and building upon the blockchain. Telegram, Facebook, WeChat, Slack and WhatsApp groups have proved popular in building communities of decentralized blockchain investors who can communicate with each other on a daily basis. Many large investments in early stage technology companies can be coordinated within minutes, a process that would traditionally take months in traditional venture capital. For example, in 2017, Brave’s Basic Attention Token sale sold out of its $35 million offering within 30 seconds. The blockchain community offers a strong sense of purpose with all members committed to a common goal of advancing blockchain technology to global adoption.

Related: How Digital Wallets and Mobile Payments Are Evolving and What It Means for You

Cryptocurrency provides a platform for entrepreneurs to raise capital quickly, cheaply and efficiently. Entrepreneurs can transact value through the blockchain at high speed with limited setup costs and invest in high growth technology companies at an early stage. Platforms like Ethereum allow entrepreneurs to build decentralized applications to a global audience for free. The blockchain community offers access to some of the top entrepreneurs, engineers and investors in the world and in 2018, cryptocurrency will continue to provide a viable means for entrepreneurs to create value in the world.

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7 Ways to Get Recruiters and Job Offers to Come to You

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“You are your own brand, and you need to build that brand and promote it as much as possible. It is important that you start building your brand online, because this is where employers are going to be looking for potential employees,” suggests Dima Midon, an expert from TrafficBox. Use all of the online tools at your disposal, particularly LinkedIn, which is a professional network that allows you to really promote yourself as a professional, and someone who is an expert in your field. This is a great tool for job seekers. Make sure that you keep your profile up to date, especially when it comes to contact information, so when an employer searches you, they will be able to contact you if they are interested in learning more.

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