Danaus Chang

Imagine you’re meeting a VC today and pitching your company. Now, also imagine the VC goes home tonight and tells his or her spouse about the meeting with you. How do you think the VC would (or should) describe your product to the spouse? Remember, this is for someone who doesn’t have any context, and probably doesn’t have time to listen the whole story. If you can think of a story version that's plain and simple -- how you want the VC to describe your product to the spouse -- perhaps that version should be your pitch in the first place?

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Highly recommend launching a case study-adjacent "testimonials" or "wall of love" section on your site. Easy to design + high ROI for building trust. Some teams have been executing this particularly well recently: Nico F. @ Default, Akhil Reddy @ Thera (YC S22), and Tyler Denk 🐝 @ beehiiv. At Verbatim, our workflow for updating our testimonial page is pretty simple. The minute that we ship a new case study, we'll pull the best 1-2x quotes from the asset, send them to our designer, and immediately update the new page. If we want to push a testimonial but haven't recorded a full case study yet, our strategy & operations team will ask a customer directly for a new pull quote. Definitely recommend more teams leverage this workflow - great way to double down on social proof + increase conversion rate across your site pages ⚡

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3 years of pricing lessons at Equals condensed into one blog post. Since starting the company, we've tinkered a lot with pricing and packaging. It's one of the single most impactful levers early stage companies can pull. I think folks *don't* experiment with pricing enough, or take big enough bets when they do. We've tried free. We've tried completely sales led. We've tried not listing pricing on the site. Matt Hodges details all the plans we've had, why, and what we've learned in our latest installment on Wrap Text. https://lnkd.in/ecckEDba

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I’m seeing an increasing number of founders (and friends) exit their startups this year. Most of them have never exited a business before, and unfortunately, roughly half of them are likely to end up in dispute post-close. The most common reason is a term that almost everyone has never heard of. Working Capital Adjustments (WCA) are part of the broader Purchase Price Adjustments (PPA) in a standard M&A agreement. They intend to adjust the purchase price based on the actual working capital at closing compared to a previously agreed-upon target. This prevents the seller from emptying the bank accounts and running off with inventory before the deal closes. This mechanism is disputed so widely because Working Capital is often defined as “GAAP, consistently applied” — and this is not specific enough. A dispute arises when the buyer and seller interpret items differently, such as accounts receivable. These may seem small, but the cost can be in the millions. Many lawyers suggest that the solution is to draft a detailed dispute resolution process, which ultimately leads to higher fees for the lawyers. We believe the better solution is transparency. Referencing a pre-agreed set of financial statements and calculations that are up to date in real time during the closing process can align buyers and sellers. Combining this with a defined list of Accounting Policies and using GAAP only as a fallback mechanism safeguards against dispute and ultimately protects the sale proceeds.

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I recently sat down with a group of Forum Ventures founders about to go out to fundraise and the topic of SAFE rounds came up. The context focused on the pros/cons of raising a priced vs a SAFE round and the conversation notably shifted toward the dilution implications of a SAFE round. Founders are keenly aware of the top line dilution of any funding round - ie selling 20% of their startup for $3M at a $15M cap - but very few fully grasp the implications of doing a SAFE round vs a priced round. The universal standard for institutional VC investors is a post money SAFE. This document essentially outlines ownership that an investor will have in a startup just prior to the execution of a priced round. Most importantly though, it is structured so that an investor in that SAFE will not be diluted by subsequent SAFE's that are issued. This is where founder education around the implications of this structure are not fully appreciated. In a situation where a founder continues to stack subsequent SAFEs, they don't actually convert until the first priced round and the net dilution they are taking is actually more than they realize. Here is a practical example - take a situation where a founder has already sold 15% of their business on a post money SAFE in a pre-seed round, and is now choosing to sell another 20% in a seed round. If the founder opts to raise this money on SAFEs, the dilution of that additional 20% will come entirely from common equity holders- meaning they will now own 65%. If SAFE holders were also diluted by that round, as they would be in a priced round, the founder would own 68%. This dynamic becomes more dramatic the more capital a founder raises on SAFEs. Note - this is a high level example and does not include an option pool carve out or other round nuances. Almost universally, when a founder raises their first priced round, there is some degree of sticker shock at the outright dilution on their cap table, particularly when options pools are factored in. This pain is even more acute when a founder has raised a fair amount of capital on SAFEs along the way. There are certainly benefits to raising SAFE round, mainly cash in hand 6-8 weeks faster and not having to decide on board seats too early, but I encourage all of our founders to run through cap table modeling and correctly account for the implications of SAFE rounds before they make fundraising decisions.

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"Platform" in VCs often feels undefined, and different at every firm. But one thing is clear: firms with dedicated platform teams are seeing higher investment returns. What is 'Platform' in VC? Think of it as a support engine for portfolio companies. Platform teams accelerate growth by providing: 1) Strategy & Growth 2) Talent Partner 3) Marketing & Brand Partner 4) Business Development & Partnerships Lead 5) Community Manager 6) Operations & Scaling Partner 7) Fundraising & Capital Advisor Platform in Venture Studios vs. VC Funds: The big difference? Timeframe. Venture Studio Platform: Involved from concept to exit, guiding startups from the very first spark of an idea. VC Platform: Steps in after the startup is funded, focusing on scaling and growth but not the initial concept phase. Both play critical roles—but understanding these distinctions helps founders and investors make the most of their platform relationships.

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One of the biggest challenges for improving performance on Meta is teams beeing held accountable for daily (and sometimes hourly) results. This isn't enough time to try new strategies or products. So by optimizing towards a daily ROAS goal in the short term, might hurt performance in the long run as you could be missing out on new solutions.

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Many assumed that the industry would be well on its way to AGI or superintelligence before AI model builders’ efforts to take advantage of scaling laws might hit a wall. Recent headlines are chipping away at that assumption. One question I've been getting in my inbox: is this the era of diminishing returns for AI? We don't think so. Even if an avalanche of new clusters and synthetic data fail to deliver significantly better model performance, there are good reasons to believe that AI is still going to become orders of magnitude more powerful in the coming years — powering a new generation of startups and ultimately productivity growth and positive benefits for mankind. In fact, with agents and reasoning just beginning to scale and thousands of industry-specific models coming online, it's about to get really exciting. Read our latest blog post on the topic: https://lnkd.in/gFhniNX8

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Three lessons from building and launching a P2P payments app without doing the proper customer validation first (despite knowing better): 1) Building something you need is a great starting point - but not enough to validate an idea. As someone drawn to building solutions, I’m an early tech adopter. This led me to overestimate consumers’ willingness to onboard, especially with a P2P payments app that requires KYC/KYB compliance and relies on a network effect to be useful. 2) Manual solutions are often best to start with It’s good business to be in business - transitioning from ideating to operating as early as possible is the BEST way to learn effectively. While the move fast and break things mindset has attracted well-deserved skepticism, getting stuck in a multi-year build trap distracted me from critical real-world validation. 3) Consumer appetite shifts quickly In my case, the proliferation of free and instant P2P payment options like Zelle added additional pricing pressure that I couldn’t compete with. This disincentivized the consumer event/payment collection market, turning my bottom-up go-to-market strategy upside down. Pitch (https://www.pitch.fun) is currently on the back burner as I’ve begun building custom solutions in various industries to sharpen my skills, solve specific problems, gain a hands-on understanding of operations, pain points, and workflows, and build a network of experts to lean on as I keep my eyes peeled for high-impact opportunities.

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Fundraising founders, don’t be too hard on yourself—it’s a tough fundraising environment, and that’s no secret. But remember to keep raising your standards because the bar for VC funding is getting higher, and you’ve got to meet it. As the venture capital landscape tightens, competition for dollars is fiercer than ever. At Startup Ignition Ventures, we’re seeing this shift firsthand, every day more and more apparent. In 2021 and 2022, many startups could secure VC checks despite being loosely thrown together and rough around the edges. Fast forward to 2024, and those same startups wouldn’t make the cut. That's not a knock on yesterday's startups as much as it is a contrast to today’s fundraising environment being completely different. Today, the founders getting funded are buttoned-up, detail-oriented, and operating at a much higher level. Everything has to be top-notch to catch a VC’s attention. Why the change? The number of active investors has dropped by 38% from 2022 to 2024 (PitchBook), meaning fewer deals are being made. VC funding is also down over 30% year-over-year (GlobalData). This means the standard has tightened, and startups must rise well above the average “2022 or 2023 fundability status” to secure 2024 investment. Startups now need to show exceptional business models, traction, products, and teams to stand out in a shrinking pool of opportunities. The landscape may be tough, but it’s also ripe for startups that prove they’re exceptional. Now is the time to build, to gear up, and then be ready for further opportunity as the market begins to turn. Which I personally think is around the corner in 2025.

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The talent market is about as disjointed right now as I’ve ever seen it... There is a incredible amount of tier 1 venture talent (multiple exits - real enterprise value creation and outcomes) opting for advisory, fractional or time on the “Beach” or “bench” right now. It’s not that they don’t want to find their next thing that they can sink their teeth into and go all in - many do - and candidate sentiment on the market has taken a 180 degree turn from Q1 2023 from negative to positive. It’s that the right next thing is incredibly hard to find right now. Messy cap tables, egregious valuations, lopsided preference stacks, limited run way, unclear ways to drive consistent growth (or even if product market fit exists) in a world that rode tailwinds for years, complex cultures, and more. Many of the “Clean” opportunities are still in seed / early series A. Many of the growth stage opportunities are plagued with cultural challenges or require a hard reset across the board. If I was in PE, or a large company looking for innovative talent, I would be doing my best to capitalize on this market. If I was in a clean VC backed company, I’d be going hard at courting the creme of the crop right no. If I was in a complex VC backed company, I’d get creative on management carve outs, outsized offers, and do what it takes to move the ball downfield. I think we’re about 9-12 months away from tech/tech enabled findings it’s way back to being at the top of tier 1 candidates list. It won't be 2021 again.... But I do think the market is going to be way less available. Move now.

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Invest a Dollar, Return Ten: Measuring Innovation with Cost Per Lesson Learned Innovation isn't just about ideas—it's about capital efficiency and value creation. Neal Piper, founder of Luminoah, shared a powerful insight on the medDesign by Trig Podcast: "If you're going to spend a dollar, and you need to return $10 in value." For startups and innovators, this mindset means being strategic about every investment. One way to measure this is through the innovation metric we call Cost Per Lesson Learned: What is Cost Per Lesson Learned? It’s the ability to maximize learning with minimal capital outlay. By working with Trig - Industrial Design Firm, his team went through over 50 design iterations, leveraging cost-efficient tools like concept storyboards, 3D CAD, and additive prototyping methods. By the time they moved to high-cost methods like injection molding, they had already refined their concept, saving significant time and money. Why It Matters: Early iterations are affordable lessons. Late-stage changes are costly mistakes. Being capital-efficient accelerates innovation without breaking the bank. This approach allowed Neal’s team to stay lean while staying true to the expectations of a startup, where a 10:1 return on innovation investment is needed to cover the risk and reward. 🎧 Check out the full conversation on the medDesign Podcast for more on how Neal and Luminoah turned a heart wrenching personal experience into a groundbreaking medical device that can positively impact millions of people. #costperlessonlearned #designthinking #medicaldevices #meddesignpodcast #tubefeeding

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We believe in extreme vetting of our founders. You can't build a unicorn if you spend time on silly stuff, like seeing family and friends. Grow up, and focus on investor returns. #vc #startups #investment

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Product Market Fit, a new framework. I've been working on this for a little while now and figured it's time to "eat my own dogfood" and test it out in the market. In this framework I provide a visual outline of the journey from "day zero" to PMF. Along the way founders must iterate on their product as well as their market to close the Product Market Gap in order to get to PMF. More details in the article. Let me know what you think 🙏 https://lnkd.in/gyF8V--x

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Maven is having a killer quarter after a strong last 12 months. People rarely share this publicly, so here's an insider look into how we've navigated product/market fit: Maven’s initial launch was wildly successful. We started a movement. The phrase we coined, “cohort-based course,” showed up in countless startup pitch decks. We were on a $4M GMV run rate in 3 months. It was intoxicating. After the launch energy faded, we faced reality. We had no product: we were hand-holding instructors behind the scenes. This resulted in a 73% instructor revenue retention rate, and many instructors were telling us we weren’t critical to their business. Today: It took 2 years, but we’re now at 120-140% instructor revenue retention. Our business is growing despite a tough market, and professionals are actually using (and loving) our product to speed up their careers. We made a few critical decisions that led to 3 big breakthroughs: Breakthrough #1: We started by looking at follower counts; now we focus on real professional expertise. Our first persona was creators with 100ks of followers, but Maven was often their 3rd or 4th priority. Simply put, they didn’t NEED us, but they were bringing in a ton of revenue. We shifted away from creators to experts, eventually losing 95% of our first $4M in course sales. This shift took 2 years, but it worked – Maven now has hundreds of “subject matter expert” instructors who have spent 10-15 years in their field. Today, Maven has its killer value proposition: we offer ambitious professionals access to the experienced operators to take their career to the next level. Lesson: Persona is key. Focusing on who really needs your product is more important than short-term traction. Sometimes the early signals are wrong, and you need to course correct. Breakthrough #2: We started as a platform; now Maven is a marketplace. When starting Maven, I envied the Substack business and modeled Maven off of it. Maven would provide software while the creator would bring the users. This was a failure of “business by analogy.” In the course world, instructors didn’t value software the way creators did in the newsletter world. They demanded we create a marketplace, and students were increasingly asking us why they couldn’t easily find great courses on Maven. I knew from my time at Udemy and Lyft how hard it is to build a two-sided marketplace, so I resisted this for 1.5 years of heavy internal debate. Eventually, we launched the Maven marketplace. Now, hundreds of thousands of students browse Maven’s courses to find something that can help them in their careers. 25%+ of all course sales come from Maven’s marketing, which has been critical to our instructors and students. Lesson: Find your own path. You can be inspired by other companies, but ultimately every market and situation is different. Be willing to change even the big things when your customer demands it. I reached LinkedIn's character limit so check the comments for the rest!

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🎙️ Exciting insights from SaaS Academy's CEO Johnny Page on the Expertise Economy podcast! Johnny breaks down their two-step approach to helping SaaS founders: 1️⃣ The Discovery Call: Uncovering the founder's "why" and long-term vision 2️⃣ The Strategic Game Plan Session: Creating a 90-day action plan to achieve 12-month goals 🔑 Key focus: Identifying and solving business constraints Want to dive deeper on the secrets of building a successful SaaS business? Check out the full episode here: https://lnkd.in/dju-Be2u #SaaS #BusinessStrategy #SaasAcademy #ExpertiseEconomy #Podcast

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As they grow, startups tend to slow down. Not the ones that keep 𝐭𝐡𝐞 𝐟𝐢𝐫𝐬𝐭 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 𝐌𝐚𝐧𝐚𝐠𝐞𝐫 𝐦𝐢𝐧𝐝𝐬𝐞𝐭 ↓ Storytime!!! A bustling office in Palo Alto in the late 2000s 🇺🇸 The walls are plastered with posters that say "Move Fast and Break Things"⚡️ (today it would say "We're so back") Julie Zhuo began her journey at a rapidly growing startup called Facebook. Young, and ambitious, Julie is one of the company’s first product designers. One day, Julie and her team were presented with a challenge: To create a feature that allows users to express their feelings About a Facebook post without using words 🤐 The concept was simple yet unprecedented. It was a task that required an understanding of how people connect. This feature was to become... the Facebook’s "Like" button 👍 A small button with a big impact! The journey to the Like button was filled with challenges 🥲 Julie and her team had to navigate through endless rounds of iterations. They faced skepticism: - Would users understand the feature? - Would it be used appropriately? - Was it too simplistic? Despite these challenges, Julie was guided by her belief in simplicity. Along with her deep understanding of user experience 💪 She believed that the Like button could offer a universal way for users to show appreciation. Bridging language barriers & fostering a positive community atmosphere ❤️ Launch day arrived... People immediately took to this new feature! The 'Like' button quickly became an integral part of Facebook. Revolutionizing social interaction online 🌍 During her time at FB, Julie played a crucial role in launching instrumental products, like: - News Feed - Meta Ad Platform - Meta Groups and Events >> Julie is what I call "a first PM" 🤯 She started as a designer. And would eventually become a manager. But along the way, she retained the mindset that had taken her so far. I've been writing a lot about the first Product Manager. Today I wanted to expand on why it's not a role. But rather a mindset. And what it takes to keep it as your startup grows. 👇 Below is the first PM cheat sheet 👇 Hope this helps! take care 💜 Enzo #thefirstpmmindset #startups

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I’ve noticed a concerning trend in the startup/VC world: some companies are pivoting their entire business model chasing “hot topics” to fit the narrative and attract investment. Every 6 months or so, there are new trends in tech that VCs are excited about. And when this happens, many early-stage companies jump on those trends to fit the narrative. But what I’ve learned from building Rollee is that it’s important to stay true to your mission. That’s what truly matters over the long run. Don’t get me wrong, there’s still an element of FOMO each time that new shiny thing takes over the market. But I know how important it is to not let that cause us to lose sight of what really matters. We were actually part of the “hot topic” when we raised our initial first round. Back then, payroll APIs were the talk of the town. Much of that was driven by the paper launched by Andreessen Horowitz called ‘The Promise of Payroll APIs’. Now, all of the conversations revolve around AI. Tomorrow? Who knows. Regardless, we’ve committed to our core mission and specialty. Making financial services accessible to everyone, regardless of their work situation. But does this mean ignoring innovation? Absolutely not. As a data scientist myself, I'm deeply excited about how we can leverage AI, both predictive and generative, to enhance our product. I spent many years understanding the concept behind AI and the most successful business applications weren’t those powered by the most advanced models. This is why we're doing it thoughtfully, pragmatically, and only where it genuinely serves the needs of our customers. So for founders who find themselves being pulled in different directions, this is my advice: - It’s okay if your business takes time to build. - It’s also okay if not everyone understands your vision immediately. - You don’t need to chase every new trend within your space. - Having clear KPIs to validate your direction is important. - You can build quietly, but also with conviction. TL;DR: Staying attractive to investors is important, but not at the expense of changing direction every couple of months to retain relevancy. Stay true to your mission, it’ll be worth it in the long run.

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