Michael Maximilian Moss

Think ARR/FTE is king? A seismic shift in SaaS metrics is happening, with EBITDA/FTE taking the crown. Here's why... With the zero interest rate glory days behind us, the convention is shifting hard and fast to EBITDA / FTE as a truer performance proxy to hone in on after interpreting a firm’s general position in the landscape via ARR / FTE (team size, number of customers and products, etc.). // ARR / FTE: - What it means: How well a company leverages human capital to generate annual recurring revenue - How to measure: Annual Recurring Revenue/Total Full-time Equivalents (aka employees or anyone working 174hrs per month) // EBITDA / FTE: - What it means: How well a company leverages human capital to generate profit - How to measure: EBITDA (or Operating Profit)/Total Full-time Equivalents (aka # of employees or anyone working 174hrs per month) EBITDA / FTE is, without question, the priority in Micro SaaS. As is the Rule of 40 (Growth + Profitability = 40%+). #microsaas #acquisitionentrepreneur #saasgrowth

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Navigating Seed-Stage Fundraising: Key Insights Understanding seed-stage fundraising is crucial for any startup founder. Here’s a concise look at the landscape, based on data from 1,271 priced seed rounds between April 2023 and March 2024. Top Players: - SaaS leads in deal volume, showing strong investor interest. - Healthtech and Fintech are also in the spotlight, with Healthtech now surpassing Fintech. High Valuation and Cash Raised: - HR startups stand out with the highest median pre-money valuation and cash raised. - Transport and Renewable Energy also show high valuations, indicating significant potential. AI’s Impact: - AI influences multiple sectors and would top every chart if tracked separately, highlighting its transformative potential. Benchmarks: - Median pre-money valuation: $13M. - Median cash raised: $3M. Industry Clusters: Analytics, SaaS, and Healthtech form significant clusters around median values. Biotech and Cybersecurity also perform strongly. Lagging Sectors: DTC Retail, Food, and Personal Products lag in both valuation and cash raised, potentially exploring alternative funding methods. Deeper Insights: -Industry Disparities: Significant variations exist, with Healthtech showing increased investor confidence. -AI’s Dominance: AI offers diverse investment opportunities across industries. Decline in Seed Volume: -Most sectors see reduced seed funding, except for AI. -Alternative Funding Strategies: Some founders are exploring revenue-based funding instead of traditional VC routes. Takeaway: Navigating the seed-stage funding landscape requires strategic understanding and adaptability. This evolving environment offers unique opportunities and challenges for both investors and founders. If you're on this journey, let’s connect. I’m here to help you navigate these complexities and improve your chances of securing funding. #startups #entrepreneurship #venturecapital #investing #finance #crossborder #inovexus #startup #VC #earlystage #angleinvestor

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Founders - when fundraising becomes slower, you need to extend your runway. Here is a guide from Sequoia. 🌿 𝗥𝘂𝗻𝘄𝗮𝘆 = 𝗻𝘂𝗺𝗯𝗲𝗿 𝗼𝗳 𝗺𝗼𝗻𝘁𝗵𝘀 𝘂𝗻𝘁𝗶𝗹 𝘆𝗼𝘂 𝗿𝘂𝗻 𝗼𝘂𝘁 𝗼𝗳 𝗰𝗮𝘀𝗵 It’s your cash balance divided by your monthly burn. For example: → you have $10M in cash → you spend $500k a month → $10M / $500k = 20 months It gets a little more complex than that. Sequoia recommends calculating cash balance as: → 𝗰𝗮𝘀𝗵 𝗯𝗮𝗹𝗮𝗻𝗰𝗲 = 𝗰𝗮𝘀𝗵 - 𝗱𝗲𝗯𝘁 Because debt is borrowed money. It comes at a cost. And you have to repay it. 𝗘𝗻𝗼𝘂𝗴𝗵 𝗮𝗯𝗼𝘂𝘁 𝘁𝗵𝗲 𝗺𝗮𝘁𝗵, 𝗵𝗼𝘄 𝗱𝗼 𝘆𝗼𝘂 𝘂𝘀𝗲 𝗶𝘁? You should calculate it every single month. Once it comes close to 12-18 months, start fundraising. Especially in the current market where closing takes longer. The good thing is: it gives you a target. Investors are waiting for the next milestones. Runway gives you a timeline. 𝗛𝗼𝘄 𝗱𝗼 𝘆𝗼𝘂 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝘆𝗼𝘂𝗿 𝗿𝘂𝗻𝘄𝗮𝘆? The deck explains it well, the main idea is to: → understand your current spend → break it into components → prioritize the reduction in the matrix (slide 18) → set a goal and execute on it Credit & Thanks to Hugo Rauch

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Ask my partners Evan Allen Blair Merlino JT Benton and they'll tell you I'm a glutton for asking and figuring out not just what works, but how things work, and why. Perhaps it's the researcher side of me, but I get uneasy relying on heuristics/patterns without knowing what's causing it, not just for an intellectual curiosity standpoint, but because it introduces uncontrolled risk into the business. Power law is a classic example of this. Sure, it tends to work for large enough funds over a long-enough duration. To the degree that trend holds, everything is fine. If the trend all of a sudden breaks (some evidence suggests that may be happening in real time), then all of a sudden a lot of GPs and LPs are going to get crushed and no explanation or understanding as to why. As studio builders we don't rely on power law. We constantly develop and fine-tune our ventures to learn and master what is driving their value. We are by no means perfect, but in our estimation we're asking the right questions and seeking the right answers versus relying on a trend and hoping for the best.

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This is an excellent article (loong one, pls note) on a step by step guide to hitting PMF or product-market fit. Love how PostHog cofounder 🦔 james hawkins visualises PMF akin to a game, with 5 levels and how to jump levels. More relevant for B2B / SaaS founders than B2C given James' experience w Posthog. One quibble would be keeping the ICP definition process on Level 5, whereas it should be something that you freeze on with picking the problem (his Level 1) ideally. While James describes this as getting to PMF, in my #pmfplaybook this is actually PPF or product to problem fit. In my definition, PPF + MMF (GTM Motion to Market Fit) = PMF. Repeatable scaling post this stage (5 reference customers) via a scalable GTM playbook is what is truly PMF. But this is my opinion against his opinion + track record of building to $20m ARR. This is a truly masterful resource for iterating to PMF. Every B2B / SaaS founder starting out or an aspiring B2B / SaaS founder should eyeball / read this. https://lnkd.in/ghGhBn-v

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Y-Combinator Guide: How to Split Equity between Cofounders & When You Should (and Shouldn’t) Split… https://buff.ly/3WoVkav The Y-Combinator Guide delves into the intricate process of splitting equity among cofounders, outlining the crucial considerations and scenarios where equity division is warranted. Understanding the dynamics of equity distribution is essential for fostering a fair and sustainable partnership. By exploring real-world examples and statistics, cofounders can navigate this challenging aspect of startup collaboration more effectively. It is crucial to establish clear guidelines and agreements to prevent potential conflicts in the future. This guide provides valuable insights for entrepreneurs embarking on new ventures. #StartupEquity #CofounderCollaboration #venturecapital #startups

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Numbers & insights from a deep tech venture studio that launched 11 companies (all are active) in the last 7 years, reaching £85M valuation across the portfolio: 1. Post Urban, initially bootstrapped by Luke Robinson, an academic with a PhD in physics from Cambridge, now operates with external funding from a UK-based fund. 2. Launched 5 companies during the first 5 years and 6 companies during the last 2 years. 3. All 11 completed pre-seed rounds; 1 of them got Series A, 2 of them are approaching their Series A. 4. The startups have collectively raised ~£25M in venture capital, in addition to receiving grants. The total valuation of the 11 companies is ~£85M, half of which have not yet undergone subsequent funding rounds. 5. Initial equity splits: the venture builder 20%, CEOs of startups 35% (vests over 4 years), CTOs – 20-25%, employees 10-15%. 6. The initial valuation of startups was £2 million, with £300K invested by the venture builder. The last 2 startups were at £3.5-4M initial valuation. 7. Building deep tech ventures requires significantly higher initial funding because these projects need more time to develop demonstrable products. Two portfolio companies hit £1M in ARR. 8. The venture builder has increased the capital for the last 2 startups to ensure they reach meaningful milestones. The CEOs of the startups were able to secure additional funding through their networks, £350K and £450K, respectively. 9. The deep tech investor pool is smaller than that for sectors like SaaS, which requires a stronger proof of concept and market readiness to attract funding. 10. 3-4 times, potential customers became investors in Post Urban Ventures. This is a great approach because it secures investment and validates the concept by gauging whether these potential customers truly believe in the solution and its market necessity. 11. They don't start with a technology or an idea; instead, they integrate insights about global problems and, by actively engaging with advisory boards, founders, and industry experts, identify pain points and align them with technological solutions. 12. They do not bring universities in as co-founders but source scientists or professors to contribute to research and development. This involves leveraging academic expertise to support the technical aspects of startup projects until a prototype is developed. 13. The studio maintains strong connections with major academic institutions, including Cambridge, Oxford, Imperial College, and UCL, supporting its deep tech focus and facilitating access to new technologies and potential founders. 14. Areas of focus in deep tech: AI (Knowledge Graphs, NLP, DNNs, Computer Vision, Edge AI, Active Learning), Quantum Technologies, Biotech, AgTech, Enterprise SaaS. Watch the full interview to gain insights into the portfolio companies, handling IP collaborations with universities, key challenges, and team construction: https://lnkd.in/dCi7fZ7G

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Y Combinator's impact on the startup ecosystem… With a portfolio of 4943 companies, YC has become the ultimate launchpad for innovative ventures. Let's dive into the numbers that showcase YC's remarkable track record: • 𝟳𝟬.𝟵% 𝗔𝗰𝘁𝗶𝘃𝗲 𝗖𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀: This (v high!) survival rate is a testament to YC's ability to identify and nurture promising startups. Compare this to the typical startup failure rate of 90% within the first year - this is why YC is the gold standard • 𝟭𝟭.𝟴% 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻𝘀: YC startups are hot commodities in the tech world. Notable exits include Twitch (acq by Amazon for $970 million) and Cruise (acq by GM for over $1 billion) • 𝟬.𝟰% 𝗣𝘂𝗯𝗹𝗶𝗰 𝗖𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀: While small in number, they pack a punch. Airbnb, Dropbox, and Coinbase have all gone public, with Airbnb's IPO valuing the company at over $100 billion!

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VC firm Norskenn22 plans to invest in 20 African startups by the end of 2025, per Bloomberg. The firm has already backed six African startups so far, including South African neobank firm Tyme Group. Norskenn22 has three more investments already lined up. The VC firm secured $205M in capital commitments towards its Africa-focused fund last year, which aimed to back “lean-tech solutions,” including software, web-based platforms, and artificial intelligence. The fund is a joint initiative between Northzone Ventures’ partner Hans Otterling and Niklas Adalberth’s Norrsken Foundation. Norskenn22 has backed startups across South Africa, Nigeria, Kenya, and Egypt. Per the African Private Capital Association, VC funding inflows into African startups slumped by 31% YoY in 2023 to $4.5B due to rising inflation and weakening local currencies.

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💣 Nearly HALF 5X+ VC funds are small funds sub $50m - I posted this last Christmas and tagged the 2 top emerging managers backing FoFs in Europe. Little would I know that by final closing time I'd be so fortunate and grateful for having both on board :) Data for the stats from Pattern Ventures, proving that emerging small funds smash larger, established funds. Now we just have to deliver and score a 5x+ pice of cake haha 😹 But hey, what would life be without a tough challenge 💪 #deeptech #europeantech #venturecapital #emergingmanagers Molten Ventures Multiple Capital

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What to build a venture back-able business? 🚀 Then you should be able to explain how you in 7-10 years; ✅ target to get to 100M USD ARR 💵 ✅ to get a +1BN exit 🦄 More great details of the workings of venture capital (which you should try to understand) in this great visual by OpenVC 💪 Want to build your (next) startup with the support from the Antler Platform? Read more about how we support founder and apply for our next residence in Denmark (and Nordics) in the comments below 🇩🇰👇 Let's go 🌶🌶 PS there are lots of great businesses that are not "venture back-able" and also lots

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Currently Fundraising this fall? How do you find the right VC firm for you? Here’s some simple tactics that can help you take more accurate shots? Know your sector, stage, investment criteria and over all alignment - Visible.VC is a great resource to find the firms who are looking for you. Cold outreach isn't dead. Make sure your pitch deck is ready and ask for your feedback and something specific about your business. If you want a warm intro, please provide a concise blurb, pitch deck (less than 13 slides) and a clear objective of the meeting with why you should be talking to this person/firm. Persistence is key, if someone doesn’t reach out doesn’t mean they don’t want to talk. VCs get tons of emails and linkedin messages. Make yourself top of mind with an old faithful follow up. Remember, finding the right VC is a two-way process. While you're evaluating them, they'll also be assessing your startup's potential. Be prepared to clearly articulate your value proposition, market opportunity, and growth plans when you do secure meetings with potential investors. #fundraising #venturecapital #startups

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The Advantages and Disadvantages of Venture Capital 🚀💡 Venture capital (VC) is a powerful tool for early-stage, high-potential companies. But it comes with trade-offs. Let’s dive into the pros and cons.👇 Advantage #1: Substantial Funding 💰 Example: Uber & Airbnb scaled rapidly with VC funding. VC provides significant funds, which might be hard to obtain otherwise. This capital allows companies to grow quickly and dominate their markets. Advantage #2: Business Expertise and Support 📈 Example: VCs offer guidance in operations, sales, and marketing. VC firms bring more than money; they provide strategic advice, mentorship, and help build a solid foundation for startups. Advantage #3: Networking Opportunities 🌐 Example: LinkedIn grew with the help of Sequoia Capital’s network. VCs are well-connected, opening doors to partnerships, customers, and future funding rounds. Advantage #4: Risk Tolerance 🎯 Example: SpaceX received funding despite high risks. VCs invest in high-risk, high-reward ventures, making it viable for innovative startups. Advantage #5: No Immediate Repayment 📉 Unlike loans, VC doesn’t require monthly repayments, allowing startups to reinvest earnings into the business. Disadvantage #1: Loss of Control 🛑 Example: Steve Jobs was ousted from Apple. VCs often require a substantial equity stake and board positions, leading to potential conflicts over strategic decisions. Disadvantage #2: Equity Dilution ⚖️ Founders must give up a portion of their ownership. This dilution can be significant, especially in later funding rounds. Disadvantage #3: High Expectations and Pressure 📊 Example: WeWork’s aggressive expansion led to instability. VCs expect high returns, placing immense pressure on startups to achieve rapid growth. Disadvantage #4: Difficult Approval Process 🔍 Securing VC is challenging, with low approval rates. The selection process involves thorough due diligence and proof of growth potential. Disadvantage #5: Potential for Misalignment of Goals 🏹 VCs may prioritize short-term gains and quick exits, while entrepreneurs might focus on long-term growth and innovation. Conclusion 📝 VC offers substantial funding, expertise, and networking opportunities, but comes with trade-offs like loss of control and high expectations. Entrepreneurs must weigh these pros and cons to determine if VC is right for their business. 💬 What do you think? Is VC the right path for your startup? Let’s discuss!

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-Founders should avoid overuse of revenue multiple: what it really means in startups’ valuation- Traditional valuation methods rely on a company's financial statements. If founders use revenue multiples in dealing with potential investors, they should understand the basics of valuation. Otherwise, it might appear as a lack of common sense. Here's a breakdown of the basic approaches and why revenue multiple was invented. https://lnkd.in/gbYqTpAC #Hypergrowth #Valuation #HITSERIESCAPITAL #TANAAKK

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Guide to Angel, Venture Capital, and Private Equity: Whether you're a founder seeking early-stage investment or an entrepreneur looking to scale up with private equity, this guide provides a comprehensive roadmap through the stages of equity financing. Key Highlights from the Guide: 1) Sources of Equity Financing: Learn about the distinctions and roles of angel investors, venture capital funds, corporate venture capital, and private equity funds. 2) Investment Criteria: Understand the specific criteria each investor type considers when evaluating startups and how to position your business accordingly. 3) Stages of Company Growth: Differentiate the financing needs at various stages, from seed capital and Series A funding to late-stage private equity investments. 4) Business Plan Essentials: Tailor your business plan with the information investors look for, including market potential, competitive advantage, and financial projections. 5) Exit Strategies: Explore the variety of exit options available, such as IPOs, strategic sales, or founder buybacks, and how to prepare for them. PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/ejp-Bhnu

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This guide outlines the funding journey from Pre-Seed to Series C and beyond: - Pre-Seed: Focus on concept, team, and initial validation. - Seed: Prove market fit and scalability. - Series A: Demonstrate revenue growth and user base. - Series B: Scale operations with solid financials. - Series C+: Prepare for major expansion and exit strategies. Insight: Each funding stage builds on the previous one. Early rounds focus on validation and product-market fit, while later stages emphasize scaling and financial stability. The goal is to show continuous growth and potential to attract investors. Subscribe to ‘Siliconnector’ Telegram channel for insights and news from Tech world and Silicon Valley: https://t.me/siliconnector

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🚀 Thinking of launching a corporate venture capital unit? Here’s the secret sauce. From 13 top CVCs interviews, the blueprint for success gets uncovered. 🎯 Key insights: - Define crystal-clear objectives - Implement structured processes - Set measurable metrics - Exercise patience - Gain board/executive backing - Offer more than just capital to startups PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/ejp-Bhnu

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