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Term Sheet — Wednesday, September 19

September 19, 2018, 1:41 PM UTC


Good morning, Term Sheet readers.

Bradley Tusk is the founder of Tusk Ventures, a political consultancy and venture firm that works with startups facing regulatory hurdles. He was one of the earliest investors in tech behemoth Uber.

But before Tusk was a VC, he worked in politics as ex-Mayor Michael Bloomberg’s campaign manager and Sen. Chuck Schumer’s communication director. He also served as the deputy governor of Illinois, working for the now-incarcerated former governor Rod Blagojevich.

You may remember Tusk from Term Sheet’s ‘5 Qs With a Dealmaker’ series. Now, Tusk has a new book called, The Fixer: My Adventures Saving Startups from Death by Politics. After reading the book, I took the opportunity to catch up with Tusk about leaving politics, Uber’s future, and the next regulatory battle in tech.

Below is an abbreviated conversation. Read the full Q&A here.

TERM SHEET: You testified at Rod Blagojevich’s federal corruption trials. I assume that you also got some heat for being his deputy. Did your reputation take a hit as a result of that?

TUSK: It’s hard to know why someone doesn’t give you an allocation on a deal, doesn’t invest in your fund, or doesn’t hire you for a project. They don’t usually say it’s because of this thing — they just make up some unrelated excuse. I was never really able to tell.

I went from Blagojevich to my next job at Lehman Brothers, which ended when they filed for bankruptcy. And the third job was running Bloomberg’s campaign in 2009, which everyone assumed was a lay-up, but in reality was a really hard campaign. I remember thinking, “Holy shit, if I lose this election after Lehman and Blagojevich, my career is over.”

The reality is that I personally didn’t mind switching jobs, but nonetheless, you can be painted as working for this guy who went to jail and working for this company that took down the global economy. I was like, “God, maybe it’s me, you know?”

You were one of the earliest investors in Uber. In the book, you refer to something called “Travis’s Law.” Can you explain what that is and how it came about?

TUSK: People generally know about the question of asking for permission or begging for forgiveness. Every startup that’s regulated has that question at some point. There’s not a rule where you should always ask for permission or beg for forgiveness.

In the book, I describe a situation in which begging for forgiveness was necessary for Uber. We were fighting a really rough and really dirty taxi cartel that we wouldn’t be able to win over with rational thought, so our best asset were our customers because they would advocate for us. But the only way to get customers to advocate was to get them in the cars. And the only way to get them in the cars was to launch. So there are people who ask me, “Don’t you wish you were a little more kinder and gentler during Uber because now the reputation would be better?” I say, “Yes, but we wouldn’t exist. What’s the point of having everyone like you if you don’t exist in the first place?” It was the only way to get ride-sharing off the ground.

And of course, that’s not true of every sector. Take fantasy sports, for example. There are scenarios where we believe that the law allows for daily fantasy sports to be done through a game of skill, so we just launched. But now, when we’re trying to get sports betting licenses, you have to get that license through the state. You can’t just go out there and start taking bets without the ability to do so granted by the state.

If I’m the founder of a company dealing with regulators, how do I decide when to ask for permission and when to beg for forgiveness?

TUSK: There are campaigns where you’re doing both in different markets at the same time because it’s logical in one place to go through the process and not logical in another. It’s very, very context-driven, and you have to understand the tech dynamic, the market dynamic, the legal dynamic, and the media dynamic to make the best choice.

You have to ask yourself — What jurisdiction am I in? What are the laws on the books? What are the penalties if I get in trouble here? How powerful is the system I’m disrupting? What are the regulators I’m dealing with like? If you can rationally think through all those things, your chance of getting it right goes way up.

In August, the New York City Council capped the total number of Uber and Lyft drivers allowed on the road. What do you make of this given that you fought (and at the time, won) the same battle in 2015 that made the city pull the bill proposing a cap on drivers?

TUSK: It really worries me. The part of the challenge is that when the board brought Dara [Khosrowshahi] to run the company, I think there was a very clear mandate of “calm things down” — no fighting and no confrontation — which he’s done a great job at.

He’s done some very good things, but it’s very hard to be the person everyone loves and be the same person who can win a bare-knuckles fight with the cartel. What DiBlasio saw was that there was an opening — Uber is more vulnerable than it used to be — and he took it and won. I think the real risk is it’s hard to see why this won’t happen all over the world.

*TS NOTE: Tusk has not met nor spoken with Khosrowshahi.

What do you foresee is the tech world’s next big regulatory battle?

TUSK: The one I’m really into is blockchain voting. Think about this example — You’re a Republican congressman from Florida, and you know an assault weapon ban is the right thing to do, and yet 12% of people vote in your primary. Your district is gerrymandered, so whatever happens in the primary is the general election, effectively, and half of that 12% are NRA members.

From a political standpoint, even if you know what the right thing to do is, you can’t do it because you’re not willing to sacrifice your career over it and you recognize that the people who voted in your primary care about it. Now, take turnout from 12% to 50% because people can vote on their phones. The NRA members will go from 50% of the vote to 10% of the vote, and the politics flip completely. What made no political sense before makes total political sense now. My assumption is that politicians will respond to whatever inputs they’re given because staying in the job matters more to them than anything else. You’ve got to change the inputs, and the only way to do that is to radically increase turnout.

I don’t care how many Rock the Vote concerts you hold or what Beyoncé and Jay-Z do, people just do not show up to the polls. But what I’ve found through these campaigns we’ve done for Uber, FanDuel, and Bird, is that if you give people a compelling reason to advocate from their phones, they will.

Blockchain seems to be the best technology to do it in a safe and secure way. We’re starting really small. We did a pilot with the city in West Virginia where deployed military service members are able to vote on their phones through blockchain. The idea is to try different jurisdictions and constituencies over the next few years and hopefully roll out in a much bigger way.

Read the full Q&A here.


Enigma, a New York-based data-as-a-service company, raised $95 million in funding. NEA led the round, and was joined by investors including BB&T, Capital One Growth Ventures, MetLife, Third Point, and Glynn Capital. Existing investors Comcast Ventures, Crosslink Capital, Two Sigma Ventures, and the Partnership Fund for NYC also participated.

Livspace, an India-based home renovation and interior design service, raised $70 million in its Series C funding. Goldman Sachs and TPG Growth co-led the round, and was joined by investors including Jungle Ventures, Bessemer Venture Partners and Helion Ventures.

Bread, a New York-based marketing tech company, has secured $60 million in funding. Kinnevik led the round, and was joined by investors including Bessemer Venture Partners, Menlo Ventures, RRE Ventures, Colle Capital Partners and Cue Ball.

Singular, a San Francisco-based provider of a data analytics platform for marketing intelligence, raised $30 million in Series B funding. Norwest Venture Partners led the round, and was joined by investors including General Catalyst, Method Capital, Telstra Ventures, Translink Capital and Thomvest.

Kayrros, a Paris-based advanced data analytics firm, raised €21 million ($24.4 million) in Series B funding. Cathay Innovation led the round, and was joined by investors including Index Ventures, AtlasInvest, the Primat Family Office (Primwest), and Korelya Capital.

Mabl, a Boston-based automated software testing startup, raised $20 million in Series B funding. GV led the round.

The/Studio, a Los Angeles-based on-demand, custom manufacturing platform for product development, raised $11 million in Series A funding. Ignition Partners led the round, and was joined by investors including FJ Labs, VTF, WTI, Firebolt Ventures, and Interplay Ventures.

Tamr Inc., a Boston-based provider of data unification solutions, raised $10 million in funding. Investors include Pear Tree Partners and Granite Hill Capital Partners.

AlphaNetworks, a blockchain-powered entertainment platform, raised $10 million in funding. Alphabit Digital Currency Fund led the round, and was joined by investors including Shuttle Fund of Korea and Smart Contract of Japan.

Setoo, a London-based insurtech startup, has raised $9.3 million in Series A funding. Kamet led the round.

Public Goods, a Brooklyn-based direct-to-consumer brand selling basic necessities, raised $3 million in seed funding. Yes VC led the round, and was joined by investors including Listen Ventures and Day One Ventures.


Zavation Medical Products, a portfolio company of LongueVue Capital, acquired PanMed, a Tampa, Fla.-based developer of products for the interventional spine and radiology industry. Financial terms weren't disclosed.

Accel-KKR made an investment in TEAM Software, an Omaha, Neb.-based provider of cloud-based technology solutions for contractors in the janitorial and security industries. Financial terms weren't disclosed.

Center Rock Capital Partners LP acquired American Piping Products, a St. Louis, Mo.-based provider of of steel pipe, fittings and valves. Financial terms weren't disclosed.

Long Ridge Equity Partners acquired a majority stake in ProcessUnity, a Concord, Mass.-based software-as-a-service provider for integrated risk management. Financial terms weren't disclosed.

Apollo Global Management made an investment in INET, a tech and telecommunications company that enables the industrial internet of things. Financial terms weren't disclosed.

Salt Creek Capital acquired Drake Equipment, a Phoenix, Ariz.-based provider of commercial service bodies for work-ready trucks and other utility vehicles. Financial terms weren't disclosed.

Five Elms Capital invested in Passageways, a West Lafayette, Ind.-based provider of secure collaboration software for employees and board of directors. Financial terms weren't disclosed.


Haidilao, a Chinese hot pot dining chain, raised $963 million in a Hong Kong IPO, valuing the firm at $12 billion. Read more.

Zekelman Industries, Chicago, Ill.based steel pipe and tube manufacturer, postponed its $752 million IPO. It posted sales of $2.6 billion and net income of $246.1 million in the 12 months ending June. Goldman Sachs and BofA Merrill Lynch are underwriters. It plans to list on both the NYSE and the Toronto Stock Exchange as “ZEK.” Read more.

Eventbrite, San Francisco-based an ticketing platform, now plans to raise $230 million in an IPO of 10 million shares priced between $21 to $23, an upsized range. It raised revenue of $201.6 million in 2017 and loss of $38.5 million. Tiger Global (21.3% pre-offering), Sequoia Capital (20.3%), and T. Rowe (6.8%) back the firm. Goldman Sachs, J.P. Morgan, Allen & Company, and RBC Capital Markets are underwriters. The firm plans to list on the NYSE as “EB.” Read more.

Graf Industrial, a Houston-based blank check company formed to acquire an industrial business, filed for a $225 million in an offering 22.5 million units at $10 apiece. EarlyBirdCapital and Oppenheimer & Co. are underwriters. It plans to list on the NYSE under the symbol “GRAF.U.” Read more.

Equillium, a La Jolla, Calif.-based biotech developing monoclonal antibody therapies, filed for an $86 million IPO. Biocon backs the firm. Jefferies, Leerink Partners and Stifel are underwriters. It plans to list on the Nasdaq as “EQ.” Read more.

Gritstone Oncology, an Emeryville, Calif.-based preclinical biotech developing a therapy to enhance immuno-oncology drugs, plans to raise $85 million in an offering 6.1 million shares priced between $13 to $15. Versant Ventures (14% pre-offering), The Column Group (14%), and Clarus Lifesciences (10%) back the firm. The firm posted loss of $41.5 million in 2017. Goldman Sachs, Cowen, and Barclays are underwriters. It plans to list on the Nasdaq as “GRTS.” Read more.

Entasis Therapeutics, a Waltham, Mass.-based developer of treatments for multi-drug resistant bacteria, said it plans to raise $75 million in an IPO of 4.4 million shares priced between $16 to $18. It did not post a revenue for 2017, and posted loss of $29.9 million. AstraZeneca (21.6% pre-offering), Clarus Ventures (14.7%), and Novo Holdings (13.7%) back the company. It plans to list on the Nasdaq as “ETTX.” Read more.

Sutro Biopharma, a San Francisco-based biotech developing immunotherapies for multiple myeloma, said it plans to raise $75 million in an IPO of 5 million shares priced between $14 to $16. It posted revenue of $51.7 million in 2017 and loss of $19.7 million. Merck (12.5% pre-offering), Alta Partners (11.9%), and Skyline Venture Partners (11.9%) back the firm. Cowen and Piper Jaffray are underwriters. It plans to list on the Nasdaq as “STRO.” Read more.


Drillinginfo, which is backed by Genstar Capital, acquired Oildex, a Denver-based oil and gas financial automation software. Financial terms weren't disclosed. Oildex is a portfolio company of Accel-KKR.


Amplify Partners, a Menlo Park, Calif.-based venture capital firm, raised $200 million for its third fund.


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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.