Moonshot Vol. 3 - A Crescent Fund Newsletter

Moonshot Vol. 3 - A Crescent Fund Newsletter

[*cut the Christmas music, that’s enough*]

HAPPY HOLIDAYS EVERYONE! Happy Hanukkah, Merry Christmas, Happy Kwanza, whatever celebrations you are engaging in this time of year, our whole team is sending you nothing but warm wishes. Currently our team is reuniting with family, traveling to some cool places, and stuffing our faces…and we hope you are too. Nonetheless, we could NOT resist releasing one last newsletter of 2023 to reflect on the year.

TLDR

• Year Recap: The birth of this very newsletter, the start of the Crescent podcast, 9 portfolio companies added, # new team members

• SoCal Highlight: Harvey raise, ServiceTitan IPO announcements, and Cromatic seed round closing.

• Events: Startup Pitch in LA, LA Startup and Tech Mixer, SoCal university entrepreneurship society upcoming recruitment, and more!

• Portfolio Highlight: To bring back the cheesiest joke ever made…this week—OneText is all it takes

• Crescent Team Highlight: Dylan Fitzpatrick (Managing Partner)

  Dylan’s Contrarian Take: “TAM is overrated”

• Podcast: Ep. 2 — a sit-down conversation with 222 founder, Keyan Kazemian coming out on January 1st, 2024!

Let’s Dive a Bit Deeper…

YEAR RECAP

(Feel free to view this as if it were a Spotify wrapped…but sub the fake personal message from your “favorite artists” with a little recap from yours truly. 🕺)

We have had a hell of a year at Crescent and it feels only right that we take a walk down memory lane to see how far we have come:

• Spoke to 800+ founders: Ranging from AI startups (surprised?) to FinTech, consumer to BioTech, and more, SoCal university students & alumni have been showing up.

• Added 7 companies to our portfolio: See our first newsletter for a proper rundown of the 2023 portfolio additions!

• Added 12 members to our team: Every year we recruit the most promising SoCal students to join Crescent’s team. This talented bunch sources and evaluates investment opportunities from their campuses. We also added a new head of platform (*ahem* hey, it’s me 😉) to work on the outward-facing sectors of Crescent.

• The birth of Moonshot - A Crescent Fund Newsletter: Well, this one speaks for itself if you are a revisiting reader. This monthly “brain dump” launched in October is an effort to show you all who we really are and increase the overall transparency of VC because frankly, we think it is bs there there isn’t more of that.

• Moonshot - Podcast launch: shortly after the launch of our newsletter we began the Crescent Fund Moonshot Podcast. These episodes include conversations about our own founding story, sit downs with the founders of our portfolio companies, talks with our managing partners about the ideology and future of Crescent, and of course, many cheesy jokes and podcast clichés mixed in. We simply can’t resist.

Reflecting on the year we have had, one thing is certain: Crescent Fund is growing. The team is growing, our portfolio is growing, and now, with this, our entire community is growing—with that we have nothing but immense excitement for the promise that 2024 is already proving to have.

Building something? At Crescent we back SoCal’s boldest founders at the earliest stages. Click below to apply for funding.

SoCal Highlight

We said it in our first newsletter, we even said it in our second…and here were are screaming it in our third, SoCal startups DO NOT get the spotlight they deserve! But with each Vol. we are working on fixing that. ;)
So, let’s take a look at some stellar SoCal deals that have gone down recently:

• Harvey raises an $80M Series B co-led by Elad Gil and Kleiner Perkins - I know Elle Woods got in to Harvard Law using Harvey…this legal AI startup founded by USC alumni Gabe Pereyra and Winston Weinberg, is making incredible strides in transforming the legal industry by streamlining processes, improving efficiency, and enhancing client services. This Series B round with participation also from Sequoia and OpenAI, brings Harvey’s total funding to over $100 million and values Harvey at $715 million.

• Cromatic closes a $5.3M seed round - Even though Dr. Google may be effective in curing whatever headache you worked up into thinking was an imminent aneurysm…making meaningful strides in life sciences research & development can cause headaches of that sort. Originating from the trenches of Caltech research, Cromatic’s full-stack digital platform makes R&D more efficient than ever, helping scientists start and scale ventures without the need for physical labs. The round was led by LifeX Ventures and AgFunder with participation from Work Life Ventures, Not Boring Capital, FJ Labs, and Lux Capital.

• ServiceTitan is preparing for an IPO in 2024 - LA-based and USC-born startup that provides field service management systems, ServiceTitan, is preparing for an initial public offering (IPO) in 2024 after postponing its IPO plans in 2022 due to unfavorable market conditions. Reportedly valued at $9.5 billion, the company offers tools to help contractors manage client experiences…boy, do the technicians who work on my apartment need to take a hint.

EVENTS

PORTFOLIO HIGHLIGHT

OneText is all it took…falling in love with this portfolio company of ours.

Kidding, it took many more conversations than that we are not THAT easy to get money out of, don’t worry 😉. This week we are featuring OneText, a text-t0-buy marketing platform for e-commerce, helping brands 10x SMS revenue through text-to-buy conversations and frictionless payments.

Almost 70% of online carts are abandoned, leading to massive revenue losses for e-commerce brands. To retarget these prospective customers, brands turn to a flurry of SMS marketing tools that send texts asking, “Forget this? Offer ends soon. Click HERE now!” But when was the last time you clicked? And even when users do, they’re bogged down by another 5-click process with redundant email fill-ins and phone confirmations. This certainly doesn't maximize conversion.

In response to e-commerce’s low conversion and the shortcomings of “Big SMS,” USC alum Jonathan Fudem and his PayPal colleague Daniel Brain started building OneText in 2021. Akin to “using a hotel room number for transactions,” OneText turns phone numbers into cards on file, so DTC brands can re-target abandoned carts more effectively by bringing the point-of-sale to text messaging. Instead of a multi-click checkout process across different web pages, shoppers can simply reply and buy with one text. If that product or campaign doesn’t end up being the right fit, OneText has also built AI Smart Replies to seamlessly answer questions and recommend products, transforming text from a static marketing channel into a dynamic shopping experience.

Online merchants are raving about OneText as a game-changer for their marketing efforts, describing the product as "the best thing that's happened to SMS marketing in a long time." With over 100M texts sent that have resulted in 35% more revenue per campaign for popular brands like Caden Lane and Tabs Chocolate, Jon and Daniel are well on their way to cracking cart recovery for e-commerce. So when you get your next 1 am text notification, don’t get too excited that your ex is crawling back…it’s probably your favorite brand using OneText.

TEAM HIGHLIGHT

This week’s highlight we are taking a deep dive into another one of Crescent’s 3 managing partners this year, Dylan Fitzpatrick.

A short run down to SoCal, Dylan is sprinting over from the SF Bay Area. An absolute machine currently in his final year studying finance at SDSU, he loves long-distance running and the fake sports of pickleball and spikeball. (Kidding, have you seen how much skill those require?) The motto he likes to live by is “Go to bed every night a little wiser than you were when you got up” from Charlie Munger. Makes sense, I mean, who hasn’t Dylan recommended a book to on the team? Dylan oversees Crescent’s San Diego & Santa Barbara team and recently has been thinking a lot about embedded vertical fintech across construction, healthcare, logistics, and hospitality.

Are you a founder wondering how to think through VCs’ canonical defensibility question – “What prevents others from doing this?” Check out Dylan’s perspective below!

PODCAST UPDATE

Given it is the holiday season, wrapped up with a little bow we have released episode 2 of our podcast!

In Episode 2, we are featuring a sit down conversation between MP, Ryan Berger, and Partner Jack Sacks with 222 founder, Keyan Kazemian. In this episode, we go into 222’s founding story and vision: we talk founder fit, branding, building on a college campus, raising a seed round, and more. This episode is coming out New Year’s Day, Jan. 1, 2024. So if your New Year’s resolution is to

Like what you see? Make sure to subscribe for more and follow our LinkedIn and Twitter pages to stay up to date on all things Crescent.

Interested in joining our community of founders, operators, and funds? Click below to reach out.

Just Doing Our Thing

Thanks for reading this month’s Moonshot Crescent Fund Newsletter. Again, from everybody at Crescent we are wishing you a very happy holiday season and a happy new year, even if you have no one to smooch at midnight.

In the spirit of being as cheesy as possible, see you next year! Until then.

I’ll see you when I see you…