How VCs Got Into Notion’s New Round, Newark’s New Fund And A Women’s Angel Investor Group Hits A Milestone

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Today we’re diving deeper into Notion’s new funding round at a $10 billion valuation to see how Coatue and Sequoia won the deal, checking in with Newark’s local VC firm as it raises a new fund, checking the data on VC-backed media exits in the wake of Ozy’s crazy week, and catching up with women-focused angel group Golden Seeds as it crosses a major milestone. Let’s get going.

Elevator Pitch

On Friday, we broke the news that note-taking app Notion had reached a $10 billion valuation after raising $275 million from investors Coatue, Sequoia and Base10 Partners. It’s the latest in an accelerating fundraising cycle for the San Francisco-based startup, which was founded in 2012 but went years raising very little money — $2 million in 2013, and a $150,000 loan from CEO Ivan Zhao’s family in 2016, per PitchBook — before recent investments of $18.7 million in 2019, $50 million in 2020 and now the new round, dwarfing them all. (This is probably why Notion doesn’t bother to name its funding rounds as Series A, B or the like.)

You can read more about Notion’s recent growth, including how going viral on TikTok has proven a blessing and a challenge, here. But for Midas Touch, let’s look a bit more closely at the funding round itself, with help from the round’s lead investors, Coatue’s Caryn Marooney and Sequoia’s Mike Vernal.

The why: Last year, Notion COO Akshay Kothari told reporters after the company’s $50 million raise that the startup now had ample financing for the next ten years. This past week, he stood by the remark, claiming that Notion had spent little of that funding as it grows alongside meaningful revenue. So why raise so much? According to Notion, the answer is to invest more heavily in product, where it’s building a “platform” play that connects Notion to more fellow work apps, and to lean into international growth, which the company says accounts for 70% of its revenue today, without much local support. 

The easiest explanation: more money will usually go a longer way with hiring. Notion has simply tried to be capital efficient and mindful of dilution, and its numbers can justify SoftBank-sized checks without SoftBank-style dilution now. “You can invest more aggressively in product and engineering, in certain kinds of marketing opportunities, than you could otherwise,” says Vernal. Another factor: proving you’re not going anywhere. “Sometimes as you move up market with enterprise customers, people pay attention to things like how big the company is, how much you’ve raised in funding.”

The who: In the courtship to lead Notion’s round, as one of Silicon Valley’s buzzier businesses, Coatue got a leg up through a land and expand approach worthy of the software startups it backs. The firm put a small check in Notion’s 2020 raise led by Index Ventures, then went to work. Since David Schneider joined the firm from ServiceNow, where he was once president, Schneider has met with Kothari twice a month, Kothari says, for coaching. Notion chief resource officer Olivia Nottebohm, a Google and Dropbox veteran, met Kothari and Zhao through Coatue, initially to advise as a go-to market expert. Sequoia, meanwhile, knew Notion through its portfolio company Inkling, where Zhao once worked, and whose former CEO Matt MacInnis had written Notion a small Scout check on Sequoia’s behalf early on. 

Through MacInnis, Notion met Vernal, an executive at Facebook and angel investor who later joined Sequoia in 2016. Vernal’s close colleague at Facebook: Marooney, the social giant’s former longtime head of communications. The two are neighbors; Coatue’s also an investor in startup Rippling, where MacInnis now serves as COO. “This was probably the fastest round to come together in my time at Sequoia, definitely top two or three,” Vernal says.

The other notable new investor in the round: Base10 Partners, the firm founded by Adeyemi Ajao. Notion’s general counsel, Hasani Caraway, introduced the startup to Base10. The firm’s values — it’s pledged to donate half of the carried interest from its most recent fund to support scholarships at historically black colleges — helped make Notion want to partner with it, according to Kothari. 

The lesson: Notion’s executives repeatedly brought up the company’s community as a differentiator; its investors turned to the same in justifying such a large investment and valuation. For other entrepreneurs, Vernal notes that Notion spent three to four years at seed-stage focused on its product. Only more recently has the company appeared an overnight success, meaning it’s reached $300 million-plus investment with less dilution than typical. “If an entrepreneur can build an organic, product-led growth product like this, then they definitely should. It’s hard,” Vernal says.

And at Notion, Kothari says his message for employees after reaching a $10 billion valuation has been to quote his former boss at LinkedIn and mentor, Jeff Weiner. Weiner, Kothari retells it, is fond of invoking a line from legendary Duke University basketball coach Mike Krzyzewski: “Next play.” “I feel it very much explains this moment where it’s like, ‘okay, great, that was a good play. Now we’ve got to focus on the next play, and we’ve got to continue to invest and continue to make sure our customers find value.’” Or as Vernal put it separately: “I don’t know to what degree customers care deeply about the round you’ve raised, or valuation. Customers care about having a product that is great.”


Six years ago, Don Katz started Newark Venture Partners to fulfill his belief that Newark, New Jersey could be a successful startup hub. Katz founded audio company Audible in the city of nearly 300,000 people back in 1995, before scaling and selling it to Amazon in 2008. With a bustling international airport and corporations like Prudential and Panasonic located there, Katz envisioned a local fund that could incubate entrepreneurs and invest in their businesses, while giving back to the broader community and helping tackle local issues of housing and infrastructure.The firm launched with cofounders Dan Borok and Tom Wisniewski and raised a debut $44 million fund in 2019. Fund I amassed a notable portfolio of early-stage stakes in its five year history, producing nine exits like agtech AeroFarms, which is set to go public through a SPAC in 2021 with a $1.2 billion valuation. 

The fund rode that success to raise nearly double for Fund II — $85 million — with the help of new managing partner Vaughn Crowe. Also from Newark, Crowe was involved in the firm initially as a limited partner in its first fund, through his previous role as a managing director at Wesray Social Investments, the family office of Ray Chambers. “On a personal note, it was absolutely the right move to transition from the family office to join as a partner; I couldn’t be more thrilled,” he tells Midas Touch. “This unbridled commitment that we each have to outsized returns and commitment to our community rings true through the entire team.”

The strategy: Newark Venture Partners invests in B2B software companies, leading or co-leading seed rounds with checks up to $2 million. The latest fund has enough reserves for the firm to make follow-on investments at the Series A stage, Borok says. The firm is sector agnostic, but is particularly interested in areas like healthtech, supply chain and audio/voice, industries that Borok thinks play to Newark’s strengths. Companies don’t have to be based in Newark, but the firm hopes they will contribute to that market. “We do have a real commitment to the community in Newark and we’ve broadened that commitment,” Borok says. “We have always believed that getting companies to build in Newark will add to the ecosystem.”

Partnerships: The firm has had strong ties to Newark-based corporations from the beginning: Prudential, Panasonic (U.S. headquarters) and Audible, among others, have been anchor LPs for both VC funds. Newark Venture Partners also looks to its corporate backers to provide industry-specific advice, run beta trials or help acquire new customers. Wellsheet, a portfolio company that uses machine learning to help doctors predict patient outcomes, has a successful partnership with RWJBarnabas Health, one of the firm’s LPs, according to Crowe.

Newark: While Newark Venture Partners is for-profit, its managing partners say they’re as much focused on building up their city. The NVP portfolio has accounted for hundreds of jobs in Newark, the firm claims, while providing internships for students at local colleges like Rutgers and the New Jersey Institute of Technology. The firm’s latest fundraise will allow it to expand that impact. “In Fund II, something we will do more of over the next year is give a portion of our carried interest to the Boys and Girls Clubs, and to Rutgers,” Borok says. “We have also broadened our internship programs.” If it all goes well, Crowe says he hopes the city will be proud it houses the venture firm.

Up And To The Right

When Ozy began its very public meltdown last week, one interesting nugget that came out in the original reporting by the New York Times — understandably overshadowed by the fraud allegations — was that the story surrounded a potential VC funding round. It immediately begged the question, since when did VCs start investing in media companies again? Once a darling sector in the eyes of investors, venture capital interest in the space has plummeted over the last couple of years. Data from Preqin shows that there has only been about $800 million invested in the space so far in 2021 across 23 deals, a bump up from the $600 million invested in 2020 across 31 deals. But the numbers pale in comparison to just several years ago, when $3 billion was invested in 2018, and $4 billion in 2019.

One potential cause for the slowdown in investment is that maybe VCs have noticed that this sector doesn’t have a particularly great exit track record. Looking at the past five years, there have only been 14 exits, worth a collective $800 million, which is seemingly less than the monthly totals for a sector like fintech. But the numbers can still feel low, likely due to the rumor mill and froth surrounding media exits that exceeds the actual results. 

Former meme queen — and New York Media Softball League 2021 champion — BuzzFeed announced earlier this year it was going to go public through a SPAC at a $1.5 billion valuation. This marks a decline in value since the startup’s previous private raise, but it still has the potential to give the numbers a big boost. The deal initially faced opposition from the organization’s largest investor, NBCUniversal, who said the company was signing on to bad terms. It’s been pretty quiet on that front ever since, but the deal is still expected to close in the current quarter. Vice Media, which raised $1.6 billion in capital, also set out to merge with a SPAC this year, looking to sell itself at approximately half of its prior private valuation. But talks stalled after investors thought even that slashed valuation was still too high. Neither situation is particularly positive. (Disclosure: Forbes itself has announced plans to go public via SPAC.)

However, It remains unclear if these examples and numbers represent the true health or scope of the venture-backed media landscape, as there are multiple strong, earlier-stage media companies that don’t need to impersonate YouTube executives so far. Companies like politics and tech-focused Axios, which has raised $57 million in startup capital, and sports-focused The Athletic, which has collected a cool $139.5 million and was last raised at a valuation of $450 million, show promise in the sector. Ozy may have soured media company investments in the eyes of some investors anew, but the industry presents some attractive opportunities.

Deal Dive

When Stephanie Newby launched angel syndicate Golden Seeds in 2005, the venture capital funding landscape for women founders looked bleak. The prior year saw 50,000 startup funding rounds, only 3% of which involved companies founded by women. “We knew women were starting a much larger percentage of companies,” says Loretta McCarthy, Golden Seeds’ co-CEO and managing partner, who got involved later that year. “They weren’t participating in capital formation. [Golden Seeds] decided that they would do something that was really rare [at the time]. We said, ‘guess what, we are going to start a group.’” That group became Golden Seeds, an angel network aimed at exclusively funding women-led companies — an almost unheard of narrative at the time. 

Fast forward to today, and while funding to women founders has seen some progress, the situation is far from equitable. Golden Seeds has expanded in the interim, with chapters located everywhere from Atlanta to Arizona, and an investor pool that has included nearly 1,000 investors. McCarthy says the group remains one of the largest angel networks in the country, has looked at thousands of companies and backed more than 200. The syndicate has now hit a milestone of investing $150 million of angel capital over the last 17 years. It hopes to do more. “The fact that we hit this milestone, it’s a milestone, it’s a moment we are very proud of,” McCarthy says. “We also know that there is no reason in the world it can’t go substantially higher and hope it will.”

How it works: The angels involved with the group have autonomy over their own deals and can craft their own portfolios. New members go through a rigorous training process, McCarthy says, that covers how to do due diligence prior to an investment and add value after; members do the work themselves from there. The group typically comes in at the seed round, but the program has also raised $43 million across multiple venture funds that allows members to follow on and partner with companies throughout their life cycle. The syndicate contains women who hold other full-time jobs in venture as well as startup founders and corporate employees. 

The portfolio: The 200 companies the group has backed have gone on to raise a collective $1.5 billion in capital, Golden Seeds claims, and span industries including healthcare, fintech and consumer. The common thread: they are helmed by a woman founder. “For us, because we only look at women, there are none of those biases, we immediately get right down to what is the size of this opportunity and the credentials,” McCarthy says. “I think it just automatically removes many of the biases that women might face.” The group has also seen 20 exits thus far, including consumer intelligence platform Brandwatch. Golden Seeds backed the U.K.-based company in 2008, 13 years before it was acquired for $450 million in June. It also invested in Cognition Therapeutics, a company looking to help come up with treatments for Alzheimer’s, which began trading on NASDAQ yesterday, with shares pricing in the middle of its projected range at $12.

Case study: For entrepreneurs like Dr. Rosina Samadani, working with Golden Seeds as a woman in a technical field was particularly beneficial. When Samadani set out to pitch her startup Oculogica, which created an FDA-approved concussion test, she found it was difficult to get past VCs’ unfamiliarity with talking to an entrepreneur like her in the medical field. “For a female entrepreneur to not have to have that additional explanation or bias up front, it’s massive to have that removed,” Samadani says. Golden Seeds helped her with her cap table and how to prepare for future funding rounds, too. “Hopefully in the future when people think about the folks that lead companies, and in our case technology companies, a guy is not the only person that comes to mind,” Samadani says. “Golden Seeds is helping to shift that.”

Party Round

Our top stories and favorite reads from the week.

Shall we try to fix Facebook? Can’t be too difficult, right? Some of the options being discussed feel like an attempt to put toothpaste back in the tube. (The New York Times) — AK

New York-based Studs has brought fun and relatively inexpensive ear piercings and jewelry out of the mall through a brand actually aimed at adults. Maybe too well? I once tried to book an appointment at their Nolita studio only to find out it was two months before they would have an opening. (Forbes) — BS

Is Salesforce preparing for an imminent palace transition from Marc Benioff to Bret Taylor? Taylor reportedly seems to think so. (The Information) — AK

While Tiger Global continues to dominate U.S. venture deals, it somehow wasn’t the most active global venture investor in Q3. (Fortune) — BS

More partners are leaving SoftBank’s Vision Fund, which has improved returns but is fighting the stigma of its misses and much better capitalized competition than before. (The Information) — AK

Back in February, I wrote about a group of three Canadian brothers trying to raise $100 million to invest in BIPOC entrepreneurs. They claimed commitments and a strong vision but apparently it’s all fallen apart. (BetaKit) — BS 

Rent the Runway’s attempt at an IPO will prove an interest test for public market interest in money-losing brands. (CNBC) — AK

Contrary Capital raises a fresh fund to continue its unique strategy of identifying university student talent to help guide its investments. (TechCrunch) — BS