Dear Investors and Friends:
It was a strange summer for us at Fitz Gate as we’re sure it has been for most of you. We spent the beginning of the summer on calls with our existing portfolio companies to make sure they had adequate runway to confront what we expected to be a prolonged economic shutdown. All took prudent measures where necessary to cut headcount/compensation and reduce expenses. In spite of COVID, 4 of our portfolio companies raised significant follow-on rounds of financing — Optimal Dynamics (Fitz Gate I reinvested with others), Overtime (Fitz Gate I reinvested with others), Spruce (both Fitz Gate I and II plan to reinvest with others), and Pledgeling (Fitz Gate I plans to reinvest with others) (more info below) — and several others are posting record revenue numbers. We are very proud of how our portfolio management teams have persevered.
Attractive new investment opportunities declined dramatically during the “summer of COVID” (by some accounts early-stage venture deal flow in the US dropped 50-70%), so we spent much of our time networking with other venture firms, especially those with a Princeton alum or professor on the investment team, to generate deal flow once quality companies did start to raise capital again. Around Labor Day deal flow came back with a vengeance as quality startups decided as one, apparently, that the pandemic will be with us for awhile so they might as well get on with raising capital and growing their businesses. Much of that deal flow has come from those additional co-investor relationships we developed over the summer and from relationships we had developed with CEOs we had met several years before. One of those CEOs, Alice Zhang (Princeton ’10), the founder and CEO of Verge Genomics, invited us into her oversubscribed financing, and Fitz Gate II invested in Verge (more info below). In early October, Fitz Gate II signed a term sheet to lead the fundraising round of Tennibot when a “Friend of Fitz” and sports tech expert, Kate Delhagen (Princeton ’84), introduced us to the company in which she had invested and is advising. If you’re a tennis player, please take a look at these videos and give us your feedback (link: Tennibot “Rover” Video, Tennibot Tennis Analytics Video).
There has also been lots of positive PR for our existing portfolio companies (links below), including Newsguard’s winning a competitive Pentagon contest, Optimal Dynamics’s CEO being asked to be the keynote speaker at Princeton’s Celebrate Princeton Innovation conference, Pledgeling’s being named a finalist for Zoom’s “Whale Watch” app marketplace competition, and Verge Genomics’s earning recognition from the World Economic Forum and for its ALS treatment’s use in fighting COVID-19. In addition, QCI founder Robert Schoelkopf (Princeton ’86) was just named to the advisory board of the National Quantum Initiative in Washington, D.C. Please see the links below as well as our website for more portfolio company news.
In other news, we have re-started our venture capital and startup class for the Princeton University Graduate School remotely (over Zoom) since the Princeton campus remains shut down, and Princeton has also asked us to speak at their Engage Entrepreneurship and Innovation Conference (link: Princeton Engage Conference) and as part of the Princeton “Lectures in Faculty Entrepreneurship” series to the Princeton faculty, which is a little intimidating (link: Princeton Lectures in Faculty Entrepreneurship).
And finally, we are grateful that we and our families have remained safe and healthy in this strange time, and we hope that each of you is doing well. As always, please feel free to contact us directly if you have any questions or have come across an interesting company from the Princeton ecosystem.
Jim Cohen and Mark Poag
