Brian Sugar

Insightful look into bioplatform strategy, and what it takes to raise a Series A from my partner, Omri Amirav-Drory: https://lnkd.in/dFv7GbF6

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Here’s a question investors are often asked: When evaluating early stage companies, how much time do you spend on due diligence around future exits? It’s not surprising we hear this question a lot. Also not surprising: it’s got a wide range of answers depending on the firm. Some don’t spend much time here at all. Others make it a point to put meaningful time in as part of their process. Our current thinking: take the time to do the work on public market comps. At Alpaca VC, we spend significant time understanding how public market investors will  realistically value a business based on margin profile, product, business model & TAM. In short, we want to know: how will this company be valued at scale when we get taken out? Yes, we can acknowledge that the journey toward exit is a windy road and that there may be pivots along the way, but there are still public market companies that have a business model similar to the early stage company you're evaluating. And you can always look at gross profit multiples if you think the margin profile will change over time. So we still do the work on the comps. Quantitative metrics we look at when making the comparison to public market comps include EBITDA multiple, revenue multiple, Gross Profit multiple or all of the above. As part of this process, it’s also important to factor in the public market company’s year-over-year revenue growth as this will also significantly impact the multiple it trades at. Simple example: if you have two public market companies with similar business models and similar margin profiles, but one's growing 100% year over year, and one's growing 50% year over year, then obviously the DCF (discounted cash flow) analysis is going to spit out a very different valuation for the one that's growing faster. Why this matters: When you take all of that information into account as you evaluate an early stage business, you can begin to create a realistic picture of how this company will be valued in the public markets at exit - or how an acquirer will value the company for an acquisition. Strategic acquirers may, of course, pay a premium, but we won’t underwrite for that. This allows us, for example, to form conviction around valuation based on revenue and gross profit predictions. If we think they can do $100M of revenue five years from now, we use this diligence process to form a thesis about whether the characteristics above (product, margin, business model, etc.) will cause the company to be valued at $200M vs. $500M vs. $1B at exit. Curious how other early stage investors think about underwriting an exit and how much time they’re spending on public market comps even though these companies are in their infancy.

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2H24 VC: Slow and Furious Race… We are racing to the election and then will likely crawl to a decision. The nasty rhetoric likely contributed to the slight down tick in consumer sentiment last month, the first time since the beginning of the summer. Headline inflation came in a touch hotter than expected at 2.4% in September. The paradox is that the Conference Board just increased its 3Q24 real GDP growth to 1.8%, up from 0.8% in its prior forecast. Conditions are quite good, but the world feels very chaotic. Obviously, the macro-economic conditions directly affect the venture capital industry as liquidity informs returns and the pace of new investments. The velocity of capital is critical and now the system feels stuck. According to a recent report from Pitchbook, both the number of investments and amount of capital invested significantly declined in 3Q24.  For the quarter, $37.5 billion was invested in 2,794 deals as compared to $55.5 billion in 3,661 deals and $35.0 billion in 3,365 deals in 2Q24 and 3Q23, respectively. Notwithstanding the obvious demand for innovative solutions, the healthcare technology sector also saw continued softness in investment activity. According to Rock Health, 3Q24 investment was $2.4 billion across 110 deals suggesting an annual pace between $10 - $11 billion, consistent with 2023. The data do not lie. Thoughts for the rest of year below…https://lnkd.in/ewBQceMk Flare Capital Partners #digitalhealth #venturecapital

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Great episode for early stage VC's and capital allocators to check out. https://lnkd.in/ekz7JHJd #vc #fundraising #venturecapital

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The latest update from the research team at Primal Capital explains the importance of wallets in the Web3 ecosystem and highlights the evolution of solutions in the market today. These solutions provide greater utility compared to the original Web3 wallets, which was simply to safeguard assets from centralized platforms.

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Amongst the most successful VCs in consumer in the past decade has been Kirsten Green at Forerunner So I asked her all about how startups can navigate the 70% reduction in consumer investing & why now might be the best time for VCs to look harder at the category. I loved this discussion. I always learn something from Kirsten. Click below to watch / listen https://lnkd.in/g3kiMPD5

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Check out my recent post on why President Trump is the forcing function for us to solve the “Missing Middle” and catch the industrial Tsunami of onshoring coming to the US!

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Juniper Square recently released their look back at the state of venture in Q2 2024, and the data is interesting. 👉 The liquidity drought continues to stifle fundraising, with $37.4B committed to 255 funds YTD. 👉 In the current climate, established managers are securing 77% of fund value YTD, the highest concentration in the last decade.  👉 Over 63% of capital raised in 2024 so far is in funds of $500M+, the second-highest percentage in the last decade. 👉 Q2 reflects an uptick in US venture deal momentum, with quarterly deal count climbing to the highest level since Q2 2022. 👉 Q2 data shows a third consecutive upward quarter in both exit value and the total number of exits.  👉 Q2 hit a 9-quarter high in total number of exits, and the total exit value recorded was the second-best quarter since Q1 2022. The data shows that the landscape is especially competitive for emerging managers. When it comes to generating returns though, a fresh perspective can help find the most interesting deals. I wrote a bit about this last week, if you’re curious to dig into stats on unicorns at the seed stage, and the funds they’re raising from. You can check out the full report from Juniper Square here: https://lnkd.in/eN6VnY-k #emergingmanagers #stateofvc

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A good dataroom makes a great impression, but is not that obvious what that looks like and what consumer VCs are looking for! Having gone through hundreds of these at dmg ventures and seen the good, the bad and the ugly we want to help entrepreneurs putting their best foot forward. So Taos Edmondson, CFA wrote a great piece on how B2C founders can build data rooms that investors will love. Have a read!

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🌱🚀 Exciting News! Xefco, one of our portfolio companies, just secured A$10.5 million in funding to revolutionize the textile industry and reduce emissions! 🌎💡 With their innovative water-free textile finishing and dyeing solution, Ausora, Xefco is poised to make a significant impact. Their technology not only preserves precious resources but also cuts energy consumption and costs. Plus, it's already gaining traction with leading apparel brands like Zara and The North Face. At Investible, we're committed to backing visionary companies like Xefco that are driving positive change. This investment reaffirms our belief in their potential to transform industries and tackle pressing environmental challenges. #ClimateTech #SustainableInvesting #ImpactInvesting #MandiriInvestibleGlobalClimateTechFund 🌿📈

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Pitched to 60+ VC partners & principals Key Takeaways 👇 - At pre-seed stage the team is critical. This means you 100% need a stellar CTO. Don’t even think of raising without a CTO - If you don’t fit a certain bias, your expectations have just doubled. So having more is always better. More customers, more traction, more validation! - ALWAYS get warm intros to investors. Rely on your network. Go build one bcz cold pitching never works! - Lastly be prepared to fail. Markets are brutal right now. Have a backup plan! #startups #founders #fundraising

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#Google Google announced today an agreement with Direct Air Capture (DAC) technology company Holocene for the delivery of 100,000 tons of carbon removal credits, with the deal marking the lowest-ever price on record for DAC-based removal, at $100 per ton. DAC technology, listed by the IEA as a key carbon removal option in the transition to a net-zero energy system, extracts CO2 directly from the atmosphere for use as a raw material or permanently removed when combined with storage. According to the Intergovernmental Panel on Climate Change (IPCC), scenarios that limit warming to 1.5°C include carbon dioxide removal methods scaling to billions of tons of removal annually over the coming decades, with DAC positioned to potentially account for a significant portion of the total. https://lnkd.in/dxrrvExG

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On note: Content provenance is a potent and emerging market.

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Are electric vehicles as green as we think? I recently joined the 'ESG Detectives' podcast to discuss the true environmental impact of EVs, from manufacturing to energy consumption. We also explored the vital role of AI and semiconductors in shaping the future of sustainable transportation. Tune in to discover the surprising realities behind this rapidly evolving industry. What are your thoughts on the environmental impact of EVs? Share in the comments below! #EV #AI #Sustainability #GreenTech #Podcast #Discussion

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Halle Kaplan-Allen and I will be chatting with Ali Hamed tomorrow about sourcing LPs. You can RSVP here: https://lnkd.in/edYZhKrA Ali wrote this excellent tactical piece on networking that is well worth a read for anyone networking their way to capital: https://lnkd.in/eZ_2f_4x This event is presented by Sydecar, a frictionless deal execution platform for venture capitalists. By pioneering a standardized approach to private investing, they enable capital allocators to identify and back entrepreneurs who are changing the world. Their platform reliably handles back-office operations, automating banking, compliance, contracts, tax, and reporting so that customers can focus on making deals and building relationships.

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We updated our LinkedIn company page! You can read how Rapid Ventures partners with #startups, #marketadopters, #investors and other #stakeholders in the #climatetech #ecosystem to accelerate #decarbonization and catalyze economic and #workforcedevelopment.

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Dan Primack had some pointed criticism for #VC yesterday in his Axios Pro Rata newsletter (a daily must read IMO 😤). In short, the model doesn't work if it can't produce exits for LPs. Don't blame public markets (which are at all-time highs) for the lack of liquidity either. 📈 💸 Instead, this is a "liquidity drought of your making" where "...swinging for the fences on every pitch, rather than taking the single or double that's available" is the only way out when you invest at "sky high valuations." 😰 "A whopping 37% of "unicorns" are being held for at least nine years by VC funds, including 13% that are past the 12-year mark." 😳 ⌛ Is he right? Is VC at a dire inflection point? Or is Primack prematurely hitting the panic button? 🚨 https://lnkd.in/dts92pXr

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An INTJ Fund conversation with Sofie Marien (Co-Founder + CTO of NoMi). NoMi aims to be the Duolingo for self-help. NoMi was in A16Z GAMES SPEEDRUN's recent cohort and backed by Jorge Mazel (previously Chief Product Officer at Duolingo). Sofie is an award-winning mobile developer and marketer with over eleven years experience in games at PlayStation and Hasbro.  She's worked on multiple top-charting games including Horizon Zero Dawn and Monopoly. She's now taking her experience to turn relatable Gen-Z experiences into playable games. I think a lot of people simply need more repetitions in order to learn how to deal with social situations. In the future, I can see people simulating everything from tough conversations to dates in game like experiences. What's a social situation you wished you could have simulated in a game as practice? Want to make friends with people like Sofie? Apply to join the INTJ Fund community - https://lnkd.in/g9tcUZVg #selfhelp #mentalhealth #gaming #INTJFund #INTJ #A16Z #INTJwomen #womeninstem

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