Aumni

This Thanksgiving, we want to take a moment to thank our clients, partners, and team members. Together, you've made this year one of growth and meaningful connections. Wishing you a season filled with gratitude and joy. Happy Thanksgiving from all of us at Aumni!

We recently discussed the evolving focus on profitability and operational efficiency in KPI frameworks with Eli Wolfson, Senior Associate at Moneta Ventures, and James Chan, CPA, experienced venture CFO. Wolfson notes a shift towards profitability, stating, “We’ve definitely seen that shift in emphasis to focus on profitability. I don’t think we’ll ever move away from revenue being the core driver. But in the picture of all the other metrics, and in the context of the company, that’s where the focus has really shifted.” Chan adds, “We’re definitely looking at the burn multiple more now.” Learn more about their perspectives and strategies here: https://lnkd.in/e2rUgmsY 

Our data on equity financings from 2015 to 2024 shows the prevalence of audited financial requirements consistently declining for early-stage companies over the past decade. In general, and perhaps as expected, the prevalence of portfolio company audit requirements increases with stage. ~90% of Series D and later startups have an audit requirement in their #equity financing agreements. For Series Seed financings, the prevalence of audit requirements has steadily decreased, starting at 45% in 2015, lowering to 39% in 2020, and dropping to 28% in 2024. Series A financings show a similar downward trend, though at a higher starting point. In 2015, 65% of Series A financings included #audit requirements, but this figure fell to 57% by 2020, and then to 50% in 2024. See the full findings: https://lnkd.in/dXSmBAYb

We recently sat down with Nina Labatt, COO & CFO at S32, and Madison Sinclair, Assurance Principal at BDO, to get their insights on navigating the #audit process. See what they had to say about best practices and practical strategies for making audits smoother in our latest blog and podcast: https://lnkd.in/eHPrURRP

With SEC Rule 2a-5, Registered Investment Advisers are adapting to a more structured framework for fair value determination. The rule brings new standards for transparency, accountability, and oversight that shape how RIAs approach valuation. What’s changed? - Fund boards now play a defined role in overseeing fair value determinations, with responsibilities to assess risks and evaluate third-party pricing services. - The rule encourages independent valuation practices, designating roles to ensure valuation processes are separate from portfolio management. Aumni provides tools that can aid #RIAs in streamlining compliance, offering access to data on #KPIs, company structures, and #valuation insights to help them navigate these requirements. Learn more: https://lnkd.in/eJdjtqdF 

Is your team ready for audit season? Our new Audit Preparation Checklist breaks down each phase to keep your #audit process organized and efficient—from T-3 months in advance to T+3 months post-audit. Here’s a glimpse of what to expect: T-3 months: Start gathering investment documents, ensuring cap table accuracy, and aligning financial data with audit needs. T-2 months: Collect #KPIs and financial statements to support valuation requirements. T-1 month: Conduct in-house valuations, review portfolios against valuation policies, and prepare for final checks. Year-end: Work with service providers to integrate transaction history and #valuations. T+1 to 3 months: Respond to auditor requests with access and visibility into all relevant data. Download the full checklist to get started: https://lnkd.in/e5k6Zufs 

Thank you to everyone who joined us at Aumni Rising! ICYMI: We kicked off the event sharing some updates related to our #KPI solutions, new scenarios and exit waterfall tools for modeling financial outcomes, and enhanced market insights offering data from over 600K+ deal documents. Next, our panel of speakers shared best practices for audit preparedness, discussing LP reporting and setting #audit timelines. See our audit preparation checklist here: https://lnkd.in/eu6FGmDr We also dove into key metrics that matter for #valuations, highlighting the importance of transparency and data clarity. See more on which KPIs #venture firms care about across stages here: https://lnkd.in/ed4fheBW Thanks again to our wonderful speakers, panelists, and moderators: - Nina Labatt, COO & CFO at S32 - Madison Sinclair, Assurance Principal at BDO - James Chan, CPA CFO at leading venture firms  - Eli Wolfson, Senior Associate at Moneta Ventures - Alex Woodgate, Managing Director at Aumni - Matthew J. Bryson, Product Manager at Aumni - Frank Amoroso, Executive Director of Venture Relationships at Aumni Weren’t able to make it? Don’t worry, we’ve got more insights coming your way. Subscribe to our newsletter to keep up with the latest: https://lnkd.in/e96edVzR

In venture, late-stage investors seem to be seeking more protections... The prevalence of redemption rights provisions in equity financings has been trending upward. In the first three quarters of this year, 4% of early-stage deals and 9% of late-stage deals included redemption rights provisions, compared to 3% and 8%, respectively, in 2023. This provision has fluctuated most in late-stage deals, where its current usage is significantly above the five-year low of 7% observed in 2021. For context, redemption rights allow investors to require the company to repurchase their shares after a set period, typically when an IPO or acquisition has not occurred. The increasing use of this protective mechanism may indicate heightened investor caution, particularly around exit opportunities. See more on this in our latest blog: https://lnkd.in/eJNGMsu2 Like this? More charts and data on the state of venture can be found in our latest report, the Aumni Venture Beacon: 1H 2024. Get it here: https://lnkd.in/eJ6d9EiQ

There has been a general improvement in valuations in the venture market over the last few months. But interestingly, a deeper look at the interquartile range of post-money valuations reveals that the market shift is occurring at the top quartile of the market. Across financing stages, there is a clear divergent trend between top quartile valuations, which have seen significant momentum in the first half of the year, and the median and bottom quartiles, which remain relatively flat and unchanged. The headline data that valuations improved, therefore, does not paint the full picture, as the recovery in the first half of the year seems to be mostly driven by the top end of the market. The charts below, which look at Series Seed and Series A, speak to this trend. See what is happening in other stages, as well as a lot of other data-driven insights about the market in our latest report, the Aumni Venture Beacon: 1H 2024: https://lnkd.in/eSbXmmZJ

The venture capital market saw green shoots in the first half of 2024, but improvements were uneven. For example, pre-money valuations improved, as did late-stage lead investor check sizes, but data indicates these improvements were driven mostly by the top end of the market. Meanwhile, the trend of increasing down-round prevalence since 2021 appears to have reversed in the first half of 2024 for early-stage companies, but the opposite is true for late-stage companies, which saw down-round prevalence in the first half of the year increase by a considerable margin. Dive into these insights and what they mean in the Aumni Venture Beacon: 1H 2024 Report: https://lnkd.in/eN-mkGC2 The report goes beyond the big-picture trends to drill down into how equity financings are being structured and what deal terms reveal about the dynamics among market participants. As the path to recovery is likely to be inconsistent and uneven, detailed data is key to distinguishing between temporary upticks and sustained recovery, and identifying where risks and opportunities lie.