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Last week, distributed a memo to founders and CEOs of its portfolio companies about the worsening economic situation as coronavirus spreads, and many other media outlets reported.

I’ve also seen posts all over from people cautioning about a slowdown in VC funding and reacting with concern to the tumultuous state of the public markets.

So I decided to ask around myself.

I didn’t get as many replies as I expected. Perhaps folks just don’t want to share their revised strategies. Perhaps they’re still trying to figure it out. I’m not sure, but for now, here’s what , general partner of Austin-based, told me on the topic. (For those that don’t know, Silverton Partners is arguably one of Austin’s most active early-stage VC firms with $384 million under management.)

Warning to executives

Flager shared with me some highlights of a note he sent out to key executives across Silverton’s portfolio this week.

Essentially, Flager said it is “prudent to assume that fundraising velocity will slow from the fast pace we’ve seen as investors take time to process the new macroeconomic environment.”

He pointed to what transpired economically in 2001 (after 9/11) and 2009 (after the economic downturn) as a reference to what people should likely expect to happen this year.

“Most investors react to uncertainty with increased caution. Travel restrictions will also make it more difficult to meet investors,” Flager wrote.

Additionally, he said that valuations will likely see pressure from multiple angles.

“First, volatility in the stock market and declining multiples will inevitably play through to the private markets. Companies that haven’t ‘gotten the memo’ and are still recklessly buying growth and burning lots of cash doing so will increasingly be viewed as risky and will see that risk premium reflected in their value,” Flager continued in his note to executives across Silverton’s portfolio. “In some cases these businesses will not be able to attract additional investment at any price. Do not be one of them.”

He also suggested that if a startup in Silverton’s portfolio is in the middle of closing a round or in the latter stages of a fundraising process, “it may make sense to take additional capital.”

“More runway in this environment could mean the difference between life and death for your business,” Flager said.

In September 2019, we covered how Silverton had filed paperwork signaling its intent to raise not just one, but a pair of new venture capital funds. The firm was reportedly aiming to raise $120 million for its sixth fund, as well as for a $20 million “opportunity fund.”

In May 2018, we reported on the firm closing on its fifth fund, in which it raised $108 million in an oversubscribed round of funding.

Silverton has made 131 knownover its 14-year lifetime at least 42 of them – and had 28 known . Startups it has backed include insurance comparison marketplace , as well as and , a woman’s shaving products startup that was recently acquired by P&G.

Some of Silverton’s more recent investments include participating in Austin-based last-mile delivery startup $10.5 million and cybersecurity company $21 million Series B raise (which was led by , ’s venture arm).

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Existing backers , and , also participated in the financing, which brings the company’s since its early-2017 inception to $130 million. This round comes just nine months (to the day) since SpotOn raised $40 million in co-led by Dragoneer and Franklin Templeton.

San Francisco-based SpotOn is taking on the likes of Square in the payments space. But says it “goes way beyond” traditional payment processing and point-of-sale (POS) software. Its platform also gives SMBs the ability to run their businesses “from building a brand to taking payments and everything in-between.” It incorporates tools that include things such as custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital loyalty.

To put it simply, according to SpotOn President , SpotOn aims to give SMBs the ability to accept payments “coupled with meaningful, integrated software to meet their specific needs and operate more efficiently.”

“Unlike other offerings, we build our own product offerings and have straight-forward pricing coupled with face-to-face service,” Horsley added.

Growth

The company says its new funding follows a year in which it saw revenue increase “by over 150 percent.” Also, SpotOn doubled its employee count to 850 over the past year. So far in 2020, it’s added over 5,000 clients with a focus on the food and beverage industry. Horsley said the company expects to add 30,000 clients this year. Currently, SpotOn has “tens of thousands of clients,” and is more than doubling year over year, he added.

For 01 Advisors managing partner and co-founder (and former Twitter CEO) , SpotOn is a rare company that can build both “great” products and “great” sales teams.

The company plans to use its new capital to invest in product development with an emphasis on targeting specific verticals. It’s especially focused on its restaurant solution, having recently tripled the development team working on improving upon that product.

SpotOn is currently “aggressively hiring.” Besides its San Francisco headquarters, the company has “expanding” product, technology and operations teams in Chicago, Detroit and Denver, as well as newly opened offices in Mexico City, Mexico, and Krakow, Poland.

It’s been a busy week for 01 Advisors. The firm also put money into New York City-based , which provides enterprise-grade IT services to SMBs and has just raised a $14.5 million Series B round.

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This comes just one week after Austin Mayor Steve Adler said the show . As fears over the coronavirus have escalated, so has the pressure on festival organizers and city officials. In fact, according to , it was Adler who ordered organizers to cancel the festival, which was scheduled from March 13-22.

“Based on the recommendation of our public health officer and director of public health, and after consultation with our city manager I’ve gone ahead and declared a local disaster. And along with that issued an order that cancels SXSW this year,” Adler said during a press conference on Friday afternoon.

This is the first time the event has been canceled in its 34 years, according to a from the conference organizers. SXSW organizers said they are looking into ways to reschedule the event and “working to provide a virtual SXSW online experience as soon as possible for 2020 participants, starting with SXSW EDU.”

“We understand the gravity of the situation for all the creatives who utilize SXSW to accelerate their careers; for the global businesses; and for Austin and the hundreds of small businesses – venues, theatres, vendors, production companies, service industry staff, and other partners that rely so heavily on the increased business that SXSW attracts,” the statement read. “We will continue to work hard to bring you the unique events you love. Though it’s true that our March 2020 event will no longer take place in the way that we intended, we continue to strive toward our purpose – helping creative people achieve their goals.”

Earlier this week, we touched on the fact that startups and venture capitalists were following the lead of large companies such as and by backing out of the conference.

The event draws an estimated 400,000 people to the Texas capital each year, and the economic impact on the city will be huge. The 2019 South by Southwest festival had a $355.9 million impact on Austin’s economy, according to an referenced by the .

In fact, the 2019 event had the biggest economic impact in SXSW’s 33-year history. Further, SXSW “is the most profitable event for the city’s hospitality industry,” according to the report and as cited by the Statesman.

Rumors in the Austin community indicate that organizers waited for Mayor Adler to declare a disaster before canceling for insurance purposes.

Anecdotally, the results of that Crunchbase News Senior Reporter Mary Ann Azevedo posted earlier this week supported the decision. Out of 101 votes, 70.3 percent of respondents said that SXSW should be canceled or postponed.

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On March 2, and announced they would back out of the South by Southwest (SXSW) festival being held in Austin, Texas, due to fears over coronavirus (COVID-19). Today, Intel followed suit. A petition is being circulated by mostly Austin residents asking organizers to cancel the annual event (as of this morning, it had ). Now it appears that startup founders and venture capitalists, too, are nixing plans to attend SXSW – scheduled for March 13 to 22 – due to coronavirus concerns.

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I reached out to SXSW organizers to get their reaction, and they referred me to on their website that said they are working closely on a daily basis with local, state and federal agencies to plan for a safe event.

“As a result of this dialogue and the recommendations of Austin Public Health, we are proceeding with the 2020 event with the health and safety of our attendees, staff, and volunteers as our top priority,” they continued.

No doubt the unprecedented cancellation of SXSW would have a major economic impact on the Texas capital. The 2019 South by Southwest festival had a $355.9 million impact on Austin’s economy, according to an referenced by the .

In fact, the 2019 event had the biggest economic impact in SXSW’s 33-year history. Further, SXSW “is the most profitable event for the city’s hospitality industry,” according to the report and as cited by the Statesman.

‘Not worth it’

As SXSW organizers no doubt scramble to deal with the crisis, we talked to a few startup founders and VCs to hear about why they’re skipping the festival this year.

, founder and CEO of San Diego-based , told me he’s going to cancel his plans to attend SXSW. This is a big deal, he said, because his company (which recently raised a $6 million Series A) is in the pitch event for consumer tech.

As a new parent, Barbo said the risk simply isn’t worth it. And his co-founders, team and investors are all supportive of his decision.

“Attending SXSW is not the best decision for my family,” he told me in a phone conversation this morning. “We were honored to be selected for the pitch competition and it hurts me to pass that up, but with so many people converging on the city, it seems inevitable that something will come out of it if the event continues.”

Barbo, too, is disappointed in organizers and city officials for not taking things like Facebook and Twitter backing out, and the concerns of residents and attendees more seriously .

“I hate to say it, because SXSW has always had an immaculate reputation, but this feels like a lack of leadership on the part of organizers and the City of Austin,” he told me.

, co-founder and CEO of Bay Area-based , said he was planning to fly to Austin for SXSW but in light of the virus, his company has “restricted all non-essential travel.”

“SXSW has become one of those events that you feel like you should go to. There’s a lot of creative thinkers there,” he told me via Zoom this morning. “But it takes just one employee coming down with it to shut down a whole office. So I’m not going.”

Jain too shares Barbo’s surprise that the event is even still happening.

“W���ٳ� and Facebook cancelling their events, why would these guys continue? In fact, I should get my money back,” he said. “The amount of bad press they’ll get might ruin the brand for years going forward.”

VCs chime in

But it’s not just founders. VCs and investors also are opting to stay home.

Tim Ferriss, investor and host of The Tim Ferriss Show podcast,  this morning that he’s not going.

“After much thought, I’ve cancelled my attendance at SXSW. I love SXSW, but I don’t believe the novel coronavirus can be contained, and I view an int’l event of 100K+ people as a huge risk to attendees and the entire city, given limited ICU beds, etc.”

On Twitter, San Francisco-based co-founder and GP revealed that after moving all in-person meetings to video, she also “cancelled SXSW.”

Via DM, she told me that her decision stems from the fact that COVID-19 seems highly contagious from the initial data.

“While I’m not worried about how it could affect my health, I’m worried about potentially becoming a carrier,” she wrote. “Our health system in the US seemingly cannot handle a large volume of cases, so I thought it was best to do my part in society and slow the number of cases. If they made it online, including the event I was supposed to judge, I’d be happy to still partake.”

And, a Los Angeles-based VC told me that one of his teammates had agreed to attend SXSW this year. He wrote me via DM: “She has asked not to go and we agreed she should not. We instituted a policy today strongly advising against attending any conferences until further notice (along with other guidelines).”

Ultimately, are organizers willing to sacrifice safety and health for dollars? Guess we’ll see. While it would no doubt be extremely difficult, and expensive, to cancel or postpone at this stage, they may have no choice if public pressure continues to build.

Meanwhile, head here to read about how heightened concerns about germs are contributing to a surge in sales for some startups in the disinfecting space.

Note: Post-publication, Founder said she is also not attending SXSW.

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Chroma Labs was founded in 2018 by ex- and employees Alex Li, John Barnett and Joshua Harris to help social media gurus create aesthetic and interactive stories. For those of you who don’t know what stories are, think of them as posts that generally expire after being posted for 24 hours (of course, exceptions exist).  , Chroma Labs helps users create templates and filters, as well as “powerful text tools.” Some phrase it as a competitor to Unfold, which I wrote about before and was acquired by Squarespace in October 2019.

Chroma Labs, in its website post, claims millions have used the company to create stories. , the business is shutting down, “effectively immediately.”

Interestingly enough, Twitter doesn’t (yet) have the feature for users to post stories, which is precisely what Chroma Labs is focused on. . It tells us that there might be a pretty innovative product update in the future. Until that is clarified, let’s look at what we have so far.

Kayvon Beykpour, a product lead at Twitter and the co-founder of , tweeted that the team will “join our product, design, and eng teams working to give people more creative ways to express themselves on Twitter.”

And finally, in it also pointed to key objectives “increasing development velocity and trust” and “increasing healthy public conversation.” With today’s investment, it seems like Twitter’s trying to tackle both in one go.

In an email to Crunchbase News, a Twitter spokesperson pointed to the company’s broader hiring goals: “We are approaching hiring in many different ways given our global hiring targets this year: acquisitions, recruiting, acquihire and team hires.

“We’re continuing to acquire talent to bolster our talent, leadership and expertise in order to better serve the public conversation.”

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Yusupov nodded to how Friday was “a very hard day” as the company ran out of cash and couldn’t afford severance for the 25 employees it consequentially laid off. The founder also claimed “there was a potential acquisition of the company which fell through abruptly.” The failed acquisition led him to shut down the company –thus not letting any winners claim the cash they were promised.

Then over the weekend, the founder spent time finding a new buyer to “do right by everyone.” Although the deal hasn’t closed yet, Yusupov said they “have found a new home for HQ, with a company that wants to keep it running. All employees, contractors and players are top priority. Severance will be paid and you will be able to cash out.” He said HQ will have changes to account for “expenses” and it will be “less buggy.”

Now let’s pause to understand a few things here. This isn’t a classic tale of a startup struggling with expenses pivoting into a new operation with a new owner. HQ Trivia, per its CEO, is publicly flip-flopping and promising that users will get their money back.

What’s most notable here, to me, is that after a failed acquisition, the founder has announced a comeback to the world promising a new buyer. The deal hasn’t closed yet.

To me, this is a note on Silicon Valley culture and founder relationships with social media reputations. It’s made the life of a startup all the more transparent, as founders can jump to the nearest platform to set the record straight, share news fast and, yes, even correct reporters. The platforms also let in a lot of flag waving and potentially empty promises. We don’t know which side HQ Trivia will end up on, yet the startup has already had its share of controversy and turbulence.

A while ago, TechCrunch to overthrow Yusupov due to mismanagement. It failed. The co-founder died. The company fired the famed, and jazzy, host. When the company died, many people on Twitter didn’t even know it still existed.

Yusupov ended with asking users to reply with advice for “Chapter 2 of HQ.”

“That’s it for now. More to come.”

Gené: Welcome to the #Angels founding team’s Katie Stanton and Jana Messerschmitt. All six founding angels met at Twitter. What was the momentum for creating #Angels?

Jana: After the IPO, one night over cocktails, we shared different tidbits around angel investing. We realized pretty quickly that we were very fortunate to come out of Twitter to see lots of entrepreneurs, and companies that were about to be formed. We decided it would actually be really fun to form this group or collective. Founders get to tap into the operating experience of all six of us. We all ran different parts of organizations and teams at Twitter across a wide variety of areas. We would also be able to take our deal flow and multiply it times six. Working at Twitter together, we built up a tremendous amount of trust. And so we wanted to be able to extend that into angel investing.

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Gené: You all have day jobs outside of #Angels? 

Katie: Our day jobs have actually made us better angel investors. It helps us with with operating experiences across product, legal, marketing, and PR. As an investment collective you can put in as much time as you want. You can slow things down, you can dial it up when you need to. We joke that we’re just winging it as angels.

Gené: Do you have a fund structure?

Jana: We invest personal capital. In some cases all six of us might write a check that goes into a company and other cases it might just be one or two of us. Flexibility is really important because at different moments in time with our operating gigs, we might have conflicts of interest. We might be busy with our operating career and we might not have time to look at deals closely.

Katie: A couple of us have been lucky enough to be scouts, which means working with different VCs that give us the capital to further invest in companies. This is a great way for other women, who may not have access to capital, to participate in this economy. The firm can extend their eyes and ears on the ground to different deals and different networks. It’s great for that angel investor who can learn, and have that practice with that capital. It’s great for the founder to reach a wider group of potential investors.

Gené: How does scouting work?

Katie: They’re all a bit different. A VC firm will work with a particular scout, they’ll negotiate terms. That scout will find the different investments and ultimately will make the decision to invest or not to invest, maybe putting together a lightweight deal memo. That scouts name is typically on the cap table of that company.

Jana: scout program is pretty widely talked about. It’s a mix of founders, operators, and just people who are well-networked, and who have a sense of deal flow. I think that’s the primary driver for a lot of venture firms for their scouts programs is how do we get into networks, into companies that they may not necessarily see at this stage.

Gené: Two of #Angels team are partners at venture firms. Jana you are an investing partner at Lightspeed Venture Partners, and Jessica Verrilli is a general partner at GV. How does that fit with your angel investing strategy?

Jana: #Angels was such a big driver for me to get into venture. It was a great way to try investing, understand what it’s like to work with founders, to come to a consensus on whether you’re excited about something, to get into the right networks. And so through the process of #Angels, I got to know a lot of different venture firms. It ended up turning into an opportunity for me to join . I am nine months in so still early. Jessica had been an associate at , earlier in her career right after undergrad. Then she ended up going back into venture, having understood a lot more through the #Angels experience.

Gené: Is there a conflict doing #Angels and investing with a fund? 

Jana: I think it’s pretty complimentary. #Angels is a valuable source of deal flow. We see so many interesting opportunities. LightSpeed is a little bit further downstream. They’re going to write much larger checks. We do everything from seed, all the way up through growth investing.

Gené: How much do you typically invest per deal? And how do you compete to get into deals? 

Katie: Across all the deals that we’ve done, I would say the most common check size has been $25K, sometimes we’ve done $50K. The most we’ve ever done is $200K where we have a lot of conviction in the deal. That’s per person. The large majority have been seed and Series A. Because of our network, from time to time we’ve gotten access to these breakout deals. We’ve invested in , , , and when they were a little bit further along.

Gené: How do you get into them at that late stage? There’s a lot of competing dollars trying to get into those successful companies. 

Katie: I think across all six of us we have relationships with many of those founders, or CEOs, or even some of the investors who are looking at not just capital because they get capital from a lot of places. That added value comes from our different experiences, in product, engineering, legal, international, and go to market strategy. Many of them were also looking for more diversity on the cap table, knowing that they had a lot of catch up work to do in terms of bringing diversity to their teams, to their executive teams, but also to their capitalization tables.

Gené: You are interested in getting more women on the cap table of successful startups. How do you make that happen?

Jana: Even though women are making gains in terms of representation in tech, we think that they hold just a fraction of the equity. from Carta reached out and said, I’m sitting on a bunch of data, do you guys want to work together? What came out was that even though women make up a third of employees at tech companies, they hold just value. So that’s a jarring statistic. If you think about what happens then with the wealth generation from these tech companies. It’s what shapes what products get started, and which companies get started, venture funds, angel investors or who has the ability to fund politics, and philanthropic endeavors. We thought that this was a watershed moment for the industry, the first study of its kind.

You have to get more women into the roles that take up the chunks of the cap table. So what are those roles. There’s four major areas. Number one is obviously founders — women still only get 2 to 3 percent of all venture funding. Number two is early employees. These tend to skew to the engineers, because you need people to build products. We need more women in engineering, hired for that first 10, 50, 100 employees. Number three is executives at companies. We need more women in executive roles. And then investors. That could be angel investors, check writing partners at firms. Those are the ways that we start to correct the gap.

Katie: Women on average makes 79 cents on the dollar. But when you factor in the equity involved, it goes to about 47 cents. When we started to angel invest, no one ever asked about who’s on your cap table. Are there women on your cap table? Are there people of color on your cap table? And increasingly we’ve seen founders approach us and say deliberately we have only male investors, we want to diversify our cap table. Would you be interested? That’s a change of mindset, which we think is very important.

Jana: In almost every deal that venture firms structure, there’s usually some amount left on the cap table for strategic investors. And so whether that’s individual angels, or maybe it’s a corporate. Now being a professional investor as well on the venture side whenever I’m doing a deal, I’m often saying, who are the other diverse investors that I can bring along?

Katie: Sometimes you can invest in a company with as little as $5K. You can add other value. You can be an advisor to those companies for free, and they will pay you to deliver some expertise that you have. We host these programming events called Angels Access. We will partner with a different VC firm, or another organization to host something around negotiations, around crypto, to help demystify what it means to become an angel investor.

Gené: Have you worked with any of the angel groups out there? 

Jana: There’s a group out of Facebook called . They are a group of ex-operators out of Facebook that we’ve worked with quite a bit. And we work with a ton of pre-seed, seed stage funds. You’ll continue to see more of this trend especially since 2019 has been a year rich with tech IPOs. There is an amazing alumni group from Uber that we’ve done some co-investing with. You’ll continue to see more and more companies IPO, more operators who have liquidity to invest.

Gené: Were these groups inspired by #Angels?

Katie: We were so thrilled when launched bringing so many women in venture together, sharing, not just deals but approaches and building community. Having more insight about how other firms perform. I am a principal. How do I become a partner? How much carry should I expect? To be able to ask questions and push the industry forward.

Gené: What have been the key learnings for you as a group? 

Jana: We’ve now invested in 120 companies. We’ve done a bunch of consumer because a lot of us have ties to consumer companies. We’ve actually done quite a bit of enterprise, because we also do have that expertise. One of our #Angels, was the chief product officer at . I worked quite a bit on Twitter’s enterprise business. Katie was the CMO of a genetics company called , so she is our healthcare expert. We invested in a few companies in aerospace. Why not invest in rockets? We invest across multiple different industries, multiple stages. A lot in Silicon Valley, but we have portfolio companies in LA, Austin, Chicago, Denver, Boston, and New York. We have one in Latvia, but not that many internationally. 40 percent of the companies have a female founder or CEO.

Gené: What’s next?

Katie: Becoming great investors and ultimately getting more women on the cap table of successful companies. And I think we want to show progress, pushing the industry forward to close that gap. There are other studies that we think could be informative. What are the root causes of that gap? For example, if you look at all seed stage funds and valuations, do valuations of companies founded by women skew less. I have an offhand observation at the most recent demo day with Y Combinator is that female founded companies that I saw were valued much lower than the male founded companies. Is that a source of part of that disparity?

Jana: When you’re a founder the terms that are set are ultimately driven by your ability to negotiate. Certain founders may only get one term sheet. So that’s the deal that they have to accept because they don’t have as much negotiation leverage. But other founders might go to Sand Hill Road and get six term sheets in a week. They’re going to drive the negotiation. They’re going to have lower dilution, higher valuations, and they’re going to set the terms. And so that’s something we talked about a lot in our group. Do women have as many options when they go out raising? Are they able to command and demand that same sort of excitement about the companies that they’re building where they’re able to drive the negotiation process and set those terms?

Gené: Are there a couple of companies you are excited by?

Jana: So one is , the scooter company. If you just look at product market fit for consumer companies over the last five years, scooters and micro-mobility, it’s one of those incredible companies with consumer product market fit. Both Bird as well as Lime are working on the unit economics and really trying to figure out how to scale this business. When I first talked to the founder a few years ago, it was just so exciting to be part of that journey because it’s completely changing the way that people get around.

Gené: And what stage, did you get involved in Bird?

Jana: I was an angel in Bird a couple of years ago. To see a physical product in the real world —  scooters parked on corners. It is constantly reminding people that this is a way to get around your city. Because consumers love the experience so much they are sharing it on social media. It’s a bit like you’re flying. You don’t have to spend marketing dollars to get consumers.

Another company that we were both excited about is a company called . Most of our deal flow comes through people we know, the founders, or maybe other investors, or people in our network. This was one I randomly saw in the wild on social media. A friend of mine was using Cameo to propose to his girlfriend using the stars of the Bravo show Vanderpump Rules. How did they get these videos from these “celebrities”? I started doing research on the company and dmning the founder on Twitter and LinkedIn. It’s a marketplace that matches celebrities with consumers. The consumer will script what they want the celebrity to say. So it could be a happy birthday message. It could be an engagement message. It could be congratulations on your job promotion. Whatever you want it to be. And then the celebrity decides whether they want to fulfill it. The celebrity also sets their price. You have everything from cameos for $25 all the way up to slots charging a few thousand dollars.

The reaction videos that you get from people are, how did this happen? Is this real? How do you know this person? It’s one of those consumer products where you have virality in so many ways. You have the receiver of the cameo who takes and shares it on social media. You will also have the celebrities promoting it because this is a great way for them to make money.

Katie: Another company is . We saw that at seed and we love the idea of more products and services giving women more agency over their health. Fertility has been sort of a taboo issue. When I was trying to get pregnant, no one ever talked about it. Am I the only person not getting pregnant immediately? They’ve helped demystify fertility, and giving you more power towards understanding how fertile am I right now? What are my options? The two female founders are incredible. They recently raised their Series A from at , which is a perfect person and team to be able to bring that forward and reach a larger audience.

Illustration: .

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Founded in 2015, Sharechat is considered to be India’s “.” It currently reportedly has 60 million monthly users across 15 regional languages, according to TechCrunch.

The news isn’t entirely a surprise as a few regional publications, including and , reported in June that the deal was in the works.

The round is notable in that it gives Twitter a foothold in one of the world’s largest countries and marks its first significant commitment into another region outside the U.S. Founder and CEO had firsthand involvement in securing the financing, according to . By investing in Sharechat, Twitter will have the ability to “go deeper into India’s smaller towns at a time when its user growth has plateaued,” noted the Times.

, , , SAIF Capital, and , also participated in the financing. With this round, Bangalore-based Sharechat has , according to Crunchbase data. It last raised in September 2018 led by China’s .

While Twitter has acquired dozens of companies, it’s only , including Sharechat, according to Crunchbase data. This round marks its first time leading an investment.

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According , the duo has already raised $134.7 million for their inaugural fund, which is aiming for a total of $200 million.

It appears that the two former Twitter executives have leveraged their old job titles to give advice and capital to entrepreneurs. In between both of ’s stints as CEO of the San Francisco social media company, Costolo ran the shop at Twitter amidst . , consulted for HBO’s Silicon Valley program, , and now works as a partner at , .

Then there’s former COO Bain, who was credited with building and launching Twitter’s advertising business. In fact, , Bain was even eyed to be CEO before Dorsey swept in for his second tenure. After Bain left in 2016, the former COO has been advising and investing in startups like , , , and sneaker marketplace .

Costolo and Twitter did not immediately respond for comment. Bain declined to comment citing quiet-period restrictions.

Monetizing upon your previous experience at a quickly growing startup, especially a startup with the global expanse of Twitter, is smart and somewhat common. For example, was launched by a trio, two of whom were ex- employees. The fund even went as far to say that it would only invest in startups started by ex-Airbnb employees. Wave Capital has since pivoted to invest in marketplace startups more generally.

The ex-Twitter executive duo are moving their consulting efforts into a formalized effort with this new fund. The Axios story parallels 01 Advisors to , a venture capital firm led by that invests in startups in regulated industries. Tusk started off as a consulting shop for larger companies before it began to work with startups in return for equity. Then, Tusk launched a venture capital fund to invest in startups more directly.

Another example of executives going from consulting to investing is . and started a after taking on clients who needed advertising help.

We’ve been tracking the transition of venture capital firms from ATMs to advice giving and service-providing machines. This news is an example of another venture firm coming into existence with more than just capital as their offer: the duo will likely bring their experience at Twitter to the startups that they bet on.

Illustration: .

Editor’s note: This article has been updated with a comment from Adam Bain. 

Morning Report: Happy Snap earnings day!

Happy Tuesday and welcome to an extremely interesting earnings day. Two companies of note to us will report after the bell: �����Ի� . One will make a lot of money, while the other will lose a lot of money. Can you guess which is which?

Correct, Snap will detail another period of deficits, but that’s almost beside the point. No one expects it to make money (yet). Instead, Snap’s user growth, revenue expansion, and cost control will be under the microscope.

So, before the market’s close (hell, they just opened), here’s a teaser of what to expect.

According to the analysts summed by the , here are the average expectations for the firm’s quarter:

• Revenue of $243.55 million ($149.65 million in the year-ago quarter)
• Per-share adjusted losses of $0.17 (-$0.20 in the year-ago quarter, adjusted)

In that year-ago quarter, Snap’s operating expenses totaled $196 million, while its gross profit was negative when share-based compensation expenses were included. That’s the baseline that Snap investors will measure from.

User growth is also on the menu. Snap’s decelerating user growth has weighed on its share price. However, during Q4’2017, new users got back to speed, as :

Snap’s flagship app, Snapchat, added 8.9 million daily active users in the quarter that ended Dec. 31. That’s the largest jump since the third quarter of 2016. The company now has 187 million daily active users, surpassing analysts’ estimates of 184 million.

That got investors more than excited. If Snap can meet financial expectations and beat on user growth, it could put up back-to-back earnings wins. Given , such a result could do wonders for morale.

All this is even more exciting as Twitter recently reported real GAAP net income during its Q1’2018 earnings download. Meanwhile, Facebook is heading into its own F8 conference after strong earnings and nearly infinite troubles.

So keep your eyes peeled after the bell. We’re counting down until Snap tells us more.