Dave Nielsen

https://lnkd.in/e-Cc-PhA Just wrapped up a case study highlighting some successful value creation work for a vertical software company. After a funding event, it can be tough for management teams to align on which initiatives to tackle first. Here are a few tips from my experience: 📈 Prioritize Compounding Benefits Start with initiatives that enable or build capabilities. These early projects are not the most glamorous. The long term value is the momentum they create and tone they set. They pave the way for bigger wins down the line. 🚧 Address Bottlenecks We identified and fixed a major technical bottleneck in the sales funnel. This gave us an immediate boost to revenue and win rates. The less obvious win was a finding that our marketing efforts were more effective than we thought. Many opportunities fitting the ideal customer profiles were getting stuck at the bottleneck! ✴ Find the Triple Word Score Initiatives Focus on initiatives that add value across multiple valuation categories like revenue, margins, and multiple expansion. My favorites are those that improve operating leverage and scalable unit economics. Operating leverage improves as each dollar of increased revenue earns a little more Operating Margin (EBITDA) over time. In the case study, I renegotiated two of the largest variable cost supplier contracts, leading to immediate improvements in unit contribution margins and setting the stage for increasing margins as revenue grew. This is a valuable function of a durable business model. Most teams agree on what needs to be done, but not always on the order. Choose initiatives that start building a solid foundation for future investments or the Quick Wins with high impact. A few good articles that touch on the technical concepts.. Healthtech: Show Your Magic | Andreessen Horowitz  https://lnkd.in/eGkDnkiG The Gross Margin Problem - Bottom Up by David Sacks https://lnkd.in/e9J2Eqaa

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🗽 This just in! Ethan Levine is speaking at SuperReturn Energy on November 11th in New York City. How is the outcome of the US Presidential election likely to affect the energy sector? Ethan's panel: Framing today's energy investment landscape, will cover all of this and more. Don't miss this important discussion! For more information, click here 👉 https://lnkd.in/gFAun2K6 ​

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The Information broke news that Insight Partners has just secured $10B in funding for their latest flagship fund. This is perfectly timed given their multiple $1B+ companies sold over the past week. This is a clear sight that #limitedpartners still have in their #privateallocations even during the current slow markets for #IPOs and #M&A. This would also appear to be good news for #AIfinancing and #SaaSFinancing. What do you think? #Management #VentureCapital #PrivateEquity #CapitalMarkets https://lnkd.in/gXu_s8Qj

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Energy and Energy Tech are the picks and shovels to the automation and AI sub-trend. If your thinking on these trends is "second-level" you've already arrived at this observation. Ascent Energy Ventures is looking for the next Levi's and Wells Fargo rising from the current gold rush. We are focused on the energy software that enables the future.

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Top Sectors for Family Office Investing

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I have always believed that private companies are best financed by a range of investment sources with complementary risk profiles. The addition of Bob to our Advisory Board is a critical step that reflects our thinking.

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The Key to Great Board Reporting (1/2) Last week I spoke on a panel hosted by Rillet, an emerging force in SAAS and Usage based ERPs. It was on a sunset boat cruise around the Statue of Liberty and truly an awesome event. The wanted to avoid discussing the tech stack and provide a forum for NYC finance leaders to share best practices and challenges reporting to boards. The questions ranged from reporting metrics for different types of companies, at different stages, to reporting at a venture capital vs private equity backed business. This past week as I reflected on the event, I wanted to add a few more thoughts. ___________________________________________________________________ The key to great board reporting? It’s understanding the “why” behind the numbers and how they change as the business grows or priorities shift. 1. Everyday Capital Allocation Decisions Founders and management teams are the real investors in any business. They make daily capital allocation decisions that shape the company’s future. They’re like portfolio managers allocating resources to the people & projects that offer the highest & best returns. The focus when explaining investment decisions, isn’t just on specific allocation strategies or balance, it’s about choosing the right metrics to measure how well capital is being deployed. 2. An Audience of Problem Solvers and Business Builders In my experience, investors, whether VC, growth equity, or PE, share two traits: they’re problem solvers and business builders. They want to help, but the level of support they realistically can provide depends on their involvement. Investors with many smaller investments may offer less hands on help, pointing you to advisors and specialists. Those with fewer, larger investments tend to be more actively involved. Effective board communication requires balancing the complexity of day-to-day operations with clear, big-picture narratives. Investors who see the potential for outsized returns often thrive on solving business challenges impacting their investments. To engage them effectively, you need to understand your audience, their incentives and motivations. In my experience, the best results come from reporting which frames key challenges in a way that leads to a targeted request for support. When investor interests are aligned properly, and the right mission critical business challenges defined, many times your board can help you get specific resources or advice needed. Missing this opportunity means missing out on their help. When presenting these challenges, keep your explanations focused, precise, and relevant to avoid overwhelming them with unnecessary details.

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If you're a SaaS, CPG, or e-commerce business collecting revenue in every state you need to worry about sales taxes now 😫 . Every state has slightly different rules too! I just made an investment in the space to solve this problem, read below 👇 I'm excited to announce a new investment that's targeting that problem. Zamp is announcing it's series A, they work with over 400 companies already (a mix of CPG, SaaS and E-commerce). If you're looking for a solution to the complicated situation of collecting sales taxes for your business, look no further.

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Yesterday, we joined investors, innovators, and policy makers at The White House to revisit the Bold Decadal Vision for Commercial Fusion Energy. 🎯The Takeaway: the Fusion Race is on The world is ready to take the next step to accelerate #fusion energy but it will take a Space Race-like effort to ensure we fully seize the opportunity. Fusion will redefine the very basics of how we live and build for centuries to come. We’re excited to get to work. Read more: https://ow.ly/koZy50SbTV4

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Climate tech solutions like TS Conductor are essential to unlock renewables full potential to drive the new green economy (in areas green steel and sustainable aviation fuel) and reduce the time as much as the cost of the transition. Expanding grids is one the key roadblocks. At Climate Tech Partners we love #optimisation technologies like this. Australia has some of the greatest renewable resources in the world - we now need to get on and deliver low cost, low carbon energy. #climatetech #renewables #greensteel #SAF

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Looking forward to discussing how changing demographics and culture norms are affecting investment opportunities in longevity, health and well-being at The Care Summit today Alongside Cake Ventures' Monique Woodard, Ziegler's Dan Hermann, Oak HC/FT's Billy Deitch and JPMorgan Chase & Co.'s Jennifer Edwards, we’ll dive into the trends shaping how we are investing in the space: - Last year marked one of the most significant social and economic moments in modern times: The number of older adults—those aged 50 and over- surpassed the number of children under the age of 15 for the first time. - In 2020 the 50 plus population contributed $45 trillion to global GDP, or 34% of the total. That equates to about 3x the revenue of the world’s 100 highest- earning companies in 2020. - The U.S. population grew by 24.5 million from 2010 to 2022, and Hispanics accounted for 53% of this increase – a greater share than any other racial or ethnic group. - Women around the world and across all ages drive 64% of consumer spending

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Can't wait to reconnect with the brilliant Amanda Herson and join the discussion with Maciek Gnutek and Iain Martin at Slush about our fund models and what they mean for Founders ❄ 🚀

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Wayfair showing real commitment here. Consider additionally that they have executed 2 VPPAs in the US, to cause essentially 100% of the financing of to-be-built, utility scale solar capacity (vs only about 5-15% in Fixed Price EAC VPPAs) as participants in Sustainability Roundtable’s Net Zero Consortium for Buyers (#NZCB) Aggregated Procurements (#VPPA 2.0) in 2021 and 2022. We need more and more examples of the corporate sustainability leadership of which Wayfair is a great example.

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Thanks Peter Walker and the Carta team for hosting me last week at The Progress and for the cool latte art. I always appreciate being fed and my daughter loved her portrait. I find so much value in Peter and team’s analysis and insights — and recommend Carta to any fellow emerging manager. Their reports have been incredibly helpful for communicating with LPs, preparing for talks and providing much needed VC fund benchmarking data. A couple of key takeaways from Carta’s VC Fund Performance Q1 2024 report: Vintage is #1: The conventional wisdom that vintage is the most important determinant of fund performance is supported by Carta's data on DPI/TVPI/IRR across recent vintages from 2017 - 2022. Take DPI for example, while 25% of 2017 vintage funds had returned capital (DPI over zero) after three years, only 9% of 2021 vintage funds had. Earlier vintages took advantage of liquidity opportunities during the ZIRP boom while later vintages got stuck with higher valuations and fewer exit opportunities. Focus on sustaining exclusive deal flow: Venture is a long game. LPs should expect to be in a fund for 10-15 years, sometimes longer. Success for emerging managers from fund I to fund II and beyond is determined by sustained access to exclusive deal flow.

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Grappling with the complexities of equity compensation and stock options? Understanding the nuances is critical. Here are some key insights from a recent client discussion: 1️⃣ Be cautious with equity instead of cash: If you're offered equity instead of cash, be aware of potential mismatched expectations. The founder might view it as significant value, but if the equity doesn’t translate into liquid assets soon, you might not see the immediate benefit. 2️⃣ Restricted Stock: For early-stage companies, restricted stock can be advantageous. If the common stock is valued at pennies, securing a restricted stock grant lets you lock in capital gains early. The 83(b) election is crucial here—it allows you to pay taxes on the stock at its current value rather than when it vests at a higher value. Filing within 30 days can save you significantly on taxes. 3️⃣ Stock Options: When a company's valuation is already high, restricted stock may come with a substantial tax burden upfront. Stock options offer a way to delay taxes, which can be helpful if you can't afford to pay taxes on a high valuation immediately. While gains are often taxed as ordinary income, the flexibility to manage when you exercise can make options an attractive choice. 4️⃣ Tax Mistakes Can Be Costly: Missing the 83(b) election can lead to serious consequences. One individual ignored the 83(b) election, thinking it unnecessary, only to face a massive tax bill when the company's value soared. They ultimately had to forfeit their shares to avoid the tax burden. This underscores the importance of working closely with a tax advisor and ensuring all paperwork is filed correctly and on time. Key Considerations When Accepting Equity: 💡 Can you afford the tax burden? If not, stock options might be the safer choice. 🔮 Do you believe in the company’s future? If you’re confident in the company’s potential, restricted stock with an 83(b) election could maximize your gains. 🤝 Are you ready for a long-term relationship with the founder? Equity compensation often ties you to the company for several years. Make sure you’re comfortable with the team and their direction. Equity compensation is a powerful tool for aligning interests, but it requires careful planning. If you need additional guidance, we're here to help you navigate these decisions with confidence.

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Great Article – Key points: (1) Interest-Rate Cut Impact: PE deal activity, is still facing challenges such as political uncertainties, weakened corporate performance, and a slow fundraising climate. (2) Already Priced In: Dealmakers indicated that the rate cut had already been factored into transactions over the past several months., (3) Value Creation Over the last two years, many PE firms have improved portfolio company performance by reducing costs and streamlining operations, which could result in higher valuations. (4) Deal Volume Growth: Projections suggest that PE deal volume will pick up in Q4 2024, with an estimated 9% year-over-year increase. This momentum is expected to continue into 2025. (5) Stagnant PE Exits: Despite an increase in US PE deal value (up 12% year-over-year in H1 2024 to $325.2 billion), PE exits remained stagnant, a critical issue as exits are essential for capital formation in the industry.

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We are so excited to announce our investment in Raechel Lambert, Bernard Kobos, and Ryan Lambert and their company, River Platform Company. River is a platform that empowers brands and influencers to build large-scale, in-person communities. To date, the platform has hosted over 2,000 events with 3,000 crowdsourced hosts and 55,000 attendees across more than 15 cities worldwide. We like to think of it as the operating system for community management. If the Catholic Church were founded today, it would use River to coordinate its global activities. No kidding. Jason Calacanis, the American internet entrepreneur and investor known for his All-In podcast with Chamath Palihapitiya, David O. Sacks, and David Friedberg, saw their potential early on. So did Balaji Srinivasan, Bryan Johnson, Tim Ferriss, and many others. We met the River team six months ago and have been incredibly impressed by their big-picture thinking, relentless hustle to connect with the right people and flawless execution. And as if that wasn’t enough, working with them is an absolute pleasure. These guys are a source of renewable energy. We’re proud to be part of this journey alongside wonderful co-investors like Blue Wire Capital, Blockwall, Solana Foundation, very early Ventures, and LAUNCH. Congratulations to the entire River team on this exciting milestone! We know firsthand that when things seem effortless, it’s because a tremendous amount of hard work went into making it happen. Want to join or host an IRL community event? Head over to getriver.io. #getriver #community #blockchainfounderscapital #startup #venturecapital #creatoreconomy

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As more single-family investment offices build out teams while talent continues to also make moves between offices, this 2023 #compensation survey report from Botoff Consulting and Morgan Stanley Private Wealth Management (thank you for these insights!) seem to be referred to often in the industry. Definitely worth a read! The reports are produced biannually. #familyoffices #talent #alternativeassets #privatemarkets #hiring #capitalmarkets https://lnkd.in/gu7WgkCC

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Take-away from a Bay clean up: Four years ago this weekend, Wendy and the kids from her non-profit Therapeutic Riding team volunteered to do a Bay cleanup of the area near the shoreline of the farm. Afterwards, I found joy as I observed their play in the bay. I also noticed their parents smiling at each other as they too acknowledged the joy of all the kids having fun together. I felt a real glimmer of hope for the future as I was reminded that there are more things that connect us than divide us. There were no preconceived judgments or thoughts about the kids who were there working at the farm that day. In this authentic moment there was simply a shared purpose in the work and play. The common voice of humanity will always rise above whatever barriers have been created to diminish it when people come together for a shared purpose. There is no doubt that the "noise" of the world makes it easy, too often, to forget to see the common humanity that we each share with one another. It is easy to get lost in the struggle BUT we all laugh, we all cry, all bleed red and love our children. The lessons of teamwork and teammates in sports and common purposes are deep and true. If we would think of the children and how beautiful they are before they are taught hate, perhaps we could be inspired to help them not repeat our mistakes. Building and maintaining organizational structures which recognize shared service approaches and decision making at the levels closest to problems and opportunities will deliver the best results and keep the best people. Committed people who are trusted and appreciated, nurtured and mentored by others who are also equally committed towards a shared purpose - well, THIS is the foundation for an organizational structure. It is very hard to maintain BUT worth the time and effort to keep this at the top of leadership priorities.

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