Viewing posts for the category startups

The Next Generation of Web Is Here

WASM and WebGL are here, and they power the generation of the web. Web Assembly enables native performance applications with the distribution of a website. Web Assembly or WASM is a way to compile C++, C, Rust, and other programs into a format that can run in the web browser. WebGL is a graphics library that allows you to use the graphics card to have much more power and control over what is rendered on the screen than the standard web languages HTML, JS, and CSS. With WebGL, you can control how every frame and every pixel is drawn. Combining the UI and UX control of WebGL and the performance of WASM enables a new generation of web applications.

Few people are talking about this today, even though WASM + WebGL applications are already disrupting big business. For example, Adobe. A native performance application is required to edit photos and create graphics. Now with WASM, you can get native performance in the browser, and with WebGL, you can get the pixel-perfect controls that users need in a graphics editing program. If you've used Figma, you have used a WASM + WebGL application! Figma is disrupting Adobe because their application is effortless to start using. You go to their website, and it loads in less than 3 seconds. That's it. Adobe Creative Cloud takes over an hour to install. With Figma, you can share and collaborate on your work with the full power of the application. Previously people exported graphics from Adobe applications to show them to coworkers, now, they can share them in the application, and anyone can make changes. Being based on the web brings the whole team into an application previously only used by designers and illustrators. This team collaboration is enabled by the application being a website, and the performance is enabled by Web Assembly.

The magical part of WASM + WebGL is that there is nothing to install or configure, and the user doesn't even know it's being used. As of November 2017, WASM is supported in all major browsers, including first-class support on iPhone and Android. WASM runs everywhere. For the first time, you can build a native performance application that runs on every platform by default. This is a step forward from the Web2 world of HTML, JS, and CSS. Performance + distribution is why I argue that WASM and WebGL are the next generation of the web.

Let me prove to you that WASM completely changes the game. Here is a full Windows 98 emulator running in the browser. Yes, that is an entire operating system running in the web browser. It can even load already booted up because WASM is a consistent build target across all browsers and systems its behavior is also consistent across all platforms. This is a huge step forward from Web2 and enables native code to run consistently on all platforms. This changes the game for both Native Applications and websites by blurring the lines and allowing developers to combine the strength of both. Performance + distribution. 

WASM + WebGL has already significantly disrupted graphics and photo editing, so what's next? Applications where performance and user interface are tightly tied together that are critical to the usability of the application will be disrupted by WASM. It's my prediction this will have a massive impact on the gaming industry, as well as video editing. The native performance and instant wide distribution of WASM + WebGL will also disrupt data science. Projects such as duck-db are showing great traction in this space, they have built a performant in-memory database that runs seamlessly in WASM.

This is why I started a data science company rethinking spreadsheets. Our product is called Quadratic. We are building the first WASM + WebGL spreadsheet application. Quadratic runs entirely in the browser and can load millions of rows of data in seconds. You can use data science languages such as Python and SQL, all directly in cells. You can freely pan and zoom to navigate large data sets (like Figma). Our grids are as easy to use as Google Sheets and are as powerful as your computer running Excel, Python, and SQL natively. Performance + distribution. It would not have been possible to build Quadratic without WASM or WebGL.

PS We are hiring developers. Check out our careers page at

How Convertible Notes Convert, Template

Convertible notes and SAFEs are great because they allow startups and investors to defer the difficult process of valuing an early stage company and quickly close funding. This is at the cost of putting the burden on later investors determine the value of the company, generally, once the company has more metrics to base a valuation on. With the convertible note holders getting some type of discount for investing early. If you want to read more about the mechanics of convertible notes I recommend Brad Feld's series of blog posts -> read here.

I've been involved with a number of companies who have raised multiple rounds of convertible note financings, without really understanding how all the rounds will convert when a priced round occurs. Over time I have developed a generic Google Sheet template which given a cap table and convertible note terms calculates Series A conversion scenarios providing insight on how everything will play out.

To access the template - > Click Here and go to File -> Download As an excel copy. From there you can re-upload the file to your own Google Drive.

In the first tab 'Pre-Investment Cap Table' add your current cap table. Usually only contains founders and maybe some early employees.

The tab 'Convertible Notes' is where you input your convertible notes. It is ok to leave either cap or discount blank. SAFE's can also be input in this sheet, they are functionally equivariant to convertible notes. Inputting multiple rounds of convertible notes here is also ok, just add them with different dates and terms.

The next tab 'Series A Inputs' is where you input a Series A scenario based on the pre-money valuation and round size. This sheet also allows you to calculate an employee option pool expansion concurrent with the Series A fundraising (this is common).

The final tab 'Series A Cap Table' shows both pre and post Series A cap tables side by side. Showing the effect of the convertible notes on the final cap table.

If you find this sheet valuable, please leave a comment. I am happy to take suggestions or discuss unique fundraising scenarios that don't fit in this template.

Choice Fatigue

Choice fatigue is a phrase I've been using lately to describe the situation when a decision has to be made between many good options. In this case, it is difficult to make a decision. Not because a good choice is hard to find, but rather because the worry of not making the absolute best choice holds back any decision. When the difference in the quality of the options is marginal, the time lost trying to make the best decision can outweigh the marginal improvement gained by the best option.

Choice fatigue can also play a role in product design. For example, Amazon helps their customers avoid choice fatigue by naming only 1 item in each category the best selling item. So when users search for a product like "reading lamp" they aren't given 100s of results with only a marginal difference in quality and no easy way to distinguish between them. Instead, they are given assistance picking "the best" option by labeling it as the #1 best-selling product in that category. This prevents users from becoming too fatigued by the options and therefore unable to decide.

Upside Protection

Unlike many other types of investors venture capitalists are not as worried about downside protection. There is inherent downside protection in equity investing, namely you can only lose as much as you invest. Yet the equity can grow infinitely in value. Also unlike most equity investors, VCs expect to make the vast majority of their returns with only a small handful of investments. With the rest of the investments either being losses or a "push". Because of the fixed limit on the downside and a focus on the few investments with great upside potential. Therefore, it is more important as a VC to focus on upside protection. That is to capture as much return as possible on investments in companies whose valuations are growing very quickly. This can be done through a variety of mechanisms. I want to talk a bit about two of such mechanisms here.

Follow-on investing. Many VCs retain large portions of their funds to make subsequent investments in companies that are doing really well.[1] This helps to alleviate dilution in further financing rounds and exposes the firm to more of the positive upside potential. This is why small funds with a limited ability to follow on, can be disadvantaged. This can also be a huge disadvantage for angel investors who do not have reserves of capital to invest in their winners. Tucker Max has a good post that cites the limited ability to follow-on in winners as a reason for small angel investors to never start investing at all.

Convertible note with a valuation cap VS a note with just a discount. This is more subtle, but an important mechanism for investors who use convertible notes. For example, let's say you are the first investor in a very early stage company. The company is just a founder with an idea. You and the founder decide to use a convertible note for simplicity as well as to not have to come up with an exact valuation for the very early stage company. You give the note a 20% discount as it converts in the next round. This sounds reasonable, as you are taking more risk so your reward is a 20% discount.

Consider if the company is doing really well and they do an equity round with a valuation of $20 million dollars. Your investment converts at a 20% discount, $16 million dollars. A valuation much higher surely then you would have agreed to when the company was just an idea. However, if you had negotiated a $3 million valuation cap. Your investment would convert at the $3 million cap and you would effectively own 5x more of the company than just based on the discount note. That is upside protection. In the first case, you would effectively be punished for taking a chance investing earlier in the company because of how well it was performing so quickly.

This is important because at a $3m cap and a $20 million valuation this investment might be the one that returns your whole fund. It would not have done so simply with a 20% discount and certainly wouldn't cover the other losses and "pushes" in the fund.


[1] Some companies also encourage this behavior with a pay to play clause.

Techstars Holiday Gift Guide

Today Techstars published a holiday gift guide, composed of only products created by companies in the portfolio. Check it out here:

It's really cool to see all the consumer products that techstars has played a part in bringing to life, all in one place. Awesome job, Mitchell Cuevas putting the list together!