News Fix: Cannabis Companies Roll With the Changes
In the last issue of the First Stage Investor newsletter, Early Investing Co-Founder Andy Gordon made the argument that it was time for startups to shift their focus from baby boomers to millennials.
But the Fix is here to say not so fast, Andy. Startups addressing the changing needs of boomers are more interesting than ever (and we’re going to completely ignore the fact that Andy gave Generation X no love – harrumph!).
While the Fix was at TechCrunch Disrupt last week, we ran into Tombot. Tombot is a startup that creates robot dogs to help dementia patients. The dogs, which are designed by Jim Henson’s Creature Shop, are so realistic that real dogs walking through San Francisco’s Moscone Center wanted to make friends with them and were confused when they couldn’t.
Tombot’s dogs help dementia patients make a connection and also serve as companions. That helps these patients’ day-to-day lives. And because these are robot dogs, the patients don’t have to care for them as they would a real pet. It’s a pretty cool idea.
So is Papa. Papa is a tech startup that connects elderly patients with college students. The college students spend time talking with these adults. They play games, go to the movies and much more. The students also help them with some light shopping, housekeeping and even getting to doctor’s appointments.
Senior citizens love having bright, energetic college students around to talk to. And college students, frequently studying psychology, nursing and medicine, get to do some good and burnish their resumes.
Papa just raised $10 million in a Series A funding round (South Florida Business Journal). Not bad for “grandkids on demand.” And it’s proof that startups can find new and innovative ways to serve boomers as they continue to age.
On to the News Fix!
App revenue continues to rise: Revenue generated by phone apps climbed almost 23% in the third quarter. Globally, apps generated $21.9 billion in revenue. In the third quarter of 2018, apps generated $17.9 billion in revenue ( TechCrunch ). Now, not all of that revenue was generated by startups. But it’s a good sign the app economy is still growing.
Founder teams that include women raise more money: A new study shows startup teams that include at least one woman raise 21% more in venture capital than all-male teams. But only 22% of founder teams in 2018 included a woman ( Bloomberg ). In terms of securing venture cash, the study shows having a woman as a core part of the founding team is more important in later funding rounds than earlier ones.
Andreessen Horowitz hires Julie Yoo as general partner: Julie Yoo will make investments for a16z’s bio fund. She’s also the fourth woman to become a general partner at a16z ( TechCrunch ).
MedMen-PharmaCann deal off: MedMen’s all-stock acquisition of PharmaCann, which was valued at $682 million when it was announced in December, would have created one of the largest marijuana companies in the U.S. But regulatory concerns and a changing business environment sank the deal (Crain’s Chicago Business).
Canopy Growth gets a new chairman: When you invest $4 billion in a company AND become the company’s largest shareholder, you get a lot of say in how the company is run. That’s why Constellation Brands ousted former Canopy CEO and Chairman Bruce Linton for running a less-than-profitable operation. And it’s why Constellation Chief Financial Officer David Klein is the new chairman of the board for Canopy ( Reuters ).
IRS rules still don’t make sense: The IRS updated its cryptocurrency guidance for taxpayers, and the rules still don’t make sense. But one thing is clear. Don’t bother using bitcoin to pay for something. Because every time you do – even if it’s just for a cup of coffee – you’re creating a taxable event ( CoinDesk ).
SEC rejects bitcoin exchange-traded fund proposal: The Securities and Exchange Commission (SEC) said the Bitwise proposal didn’t meet the necessary standards to prevent fraud and market manipulation ( MarketWatch ). If you’ve been reading Early Investing, this is not a surprise. Instead, it’s more proof that the SEC needs to be reformed.
There’s a new Breaking Bad movie coming out on Netflix soon. And some MedMen dispensaries in California have been part of a clever marketing campaign to build buzz for the movie ( Marijuana Moment ).
That’s your News Fix.