Dave Perry

Great insights about exits the next few years

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How do you launch a SaaS auto-tech startup and sell it for an 8-figure valuation, in 5 years without raising capital? Start with the end in mind. SaaS valuations typically run between 4x and 6x, the current run rate. To achieve an 8 figure exit the math looks like this: 4xMutliple: $10M÷4=$2.5M ARR 6xMultiple: $10M÷6=$1.67 ARR It's been my experience auto tech SaaS companies can grow 50% to 100% annually. Let's be conservative: Year 1: $300k ARR and $25K MRR Year 2: $500K ARR and $42K MRR Year 3: $865K ARR and $72K MRR Year 4: $1.47 ARR and $123K MRR Year 5: $2.5 ARR and $208K MRR Assuming your SaaS is low churn and your average deal is $2,500 monthly. You only need 10 dealers in year one to get to $300K ARR and the founders can handle sales themselves. I found pricing below $2,500 makes selling to dealers harder. Being the lowest cost is bad business and dealers are skeptical you can help. To achieve $2,500 you need to deliver 10x the value. Meaning if you can prove you help dealers earn/save $25,000 monthly your $2,500 is a steal. This is why I preach sell value, not price. As you grow, you'll add new products and upsell, making revenue attainment easier. To accelerate growth you can build enterprise solutions and sell to multi-rooftop groups. This is the only model viable because of industry consolidation. But also harder because you'll need multiple DMS and CRM integrations. You can't build a tool that doesn't integrate or only works stand-alone. That's the last thing dealer groups need. As you can see, you don't need huge dealer counts and with a solid plan in year one, these targets are attainable. If you're thinking of building a SaaS or have one and want a GTM review, DM me.

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What CEOs of VCs do.

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What exactly is Pre-seed funding? Ask 10 different VCs, and you’ll get 10 different answers. In this video, I explain how I define pre-seed at The Council Capital and why it’s so important for founders raising their first round of capital. #VentureCapital #PreSeed #StartupFunding #FounderJourney

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CEOs: Are you hiring a CTO with 10 years experience or one with 10 times 1 year experience? This is what to figure out as a CEO. Here's why it's important: Awesome discussion with Daniel Walters and Noah Cantor from Great CTO. #cto #recruitment #ceo

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I love seeing honest interpretations of the current capital markets by those who have more experience than I do on the capital side. I’m blessed to have an experienced team with many avenues for both funding as well as exit to come but love how the suggestion here is on the key metrics. Good business has always been had timelsss metrics that remain the same and have ROI about them. When I observe many of the current titans they had long plays but the metrics were and are the same business wise. What are metrics you focus on in early stage that translate well into later stage?

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So much conventional wisdom and data about the venture and startups industry is completely centered on the U.S. ecosystem alone. While it represents the dominant market for venture funding, global investors would be smart to take these trends with a pinch of salt.

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What do global trends' effects on startups, the art of selling, startup accelerators, and the future lizard king all have in common? On today’s Austin Next episode, I sat down with Joe Merrill, Co-Founder and Partner at Sputnik ATX VC VC, to explore these diverse and intersecting topics. Episode Highlights: 🔎 Sputnik's Focus: Sputnik ATX invests in pre-seed startups across various sectors, attracting companies from around the world, including Vietnam, Japan, and France, with a focus on "training nerds on how to sell." 🌍 ATX's International Appeal: Austin is a welcoming place for international startups due to its competitive marketplace and cultural acceptance, offering a cost-effective and supportive environment compared to Silicon Valley. 💱 Sales is Sales: Cultural flexibility is important in global sales, but fundamentally selling remains the same across different countries. 🌐 Startups on the Global Stage: Explore why startups need to embrace adaptability by understanding macro events, leveraging international markets, and utilizing global talent pools to stay competitive and innovative. 🔮 What's Next Austin: "I really feel strongly that the next great wave of technology is going to be coming from this state and Austin specifically leading that because this is where the rebels are. This is where the people are who want to just dramatically change the status quo and other places have become the status quo." - Joe Merrill ⬇️ Find links to the full episode in the comments. What’s Next?

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I’ve reviewed thousands of pitch decks in my time as a venture investor. Sadly, the vast majority of them, I scan through in less than 60 secs and hit delete! ❌ This video will cover quick tips on how to make sure your pitch deck stands out and stays out of the trash can. 🌏 Go to Market Strategy 🏁 Competitor Analysis 📱 Contact Details / Confidentially 👥 Your Team https://lnkd.in/gFe7X9Wj This is the last video of a 3 part series on “10 ways to instantly improve your pitch deck”. ICYMI here are: Part 1 - https://lnkd.in/gxFAatas Part 2 - https://lnkd.in/gvrtThpk Don’t forget to hit the subscribe button for more videos on pitching investors. Some great pitch deck review videos coming up also! https://lnkd.in/g8iTs4nQ #pitching #venturecapital #fundraising #startup #entrepreneurs

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VC exits next 10 years - much fewer IPOs - much smaller strategic M&A - PE will become the norm I explain in this clip how it will affect VC Full episode: https://lnkd.in/gaJ-TWZE

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CEOs: Are you hiring a CTO with 10 years experience or one with 10 times 1 year experience? This is what to figure out as a CEO. Here's why it's important: Awesome discussion with Daniel Walters and Noah Cantor from Great CTO. #cto #recruitment #ceo

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This Sequoia Capital article is easily the best article I have read on product-market fit. (link below) Its very relevant to (disruptive) deep tech startups, a category I often feel is ignored in these articles. 3️⃣ There's three methods to get to PMF, and the largely depend on the nature of the product and the perception of the market: 🔥Hair on Fire: Customers are acutely aware of the problem and actively looking for solutions. Success hinges on delivering the best-in-class solution through differentiation. [Smartphone market, after the iPhone] 🪨Hard Fact: Customers acknowledge the problem as an inevitable fact of life and haven't actively sought solutions. The challenge lies in convincing them that there's a better way and overcoming inertia. [Uber/ AirBnB] 👀Future Vision: Customers are either unaware of the problem or believe a solution is unrealistic. The entrepreneur needs to create a new paradigm and win over customers to this vision. [Apple iPhone/ OpenAI] Each of these have different approaches, as the nature of problem to be solved is different. 🔥Hair on Fire: Act fast and prioritize a great product with a strong go-to-market strategy, usually with a unique insight, because if its a hair-on-fire problem, there are likely existing competitors. [Rippling, the HR software did it unified HR Database for businesses] 🪨Hard Fact: Educate the market about the problem and how your solution offers a better approach. [Square had to do this to overcome the cash-only mentality] 👀Future Vision: Be prepared for a long journey, focus on attracting top talent, and find strategic pit stops for commercial traction along the way. [Nvidia did this with gaming chipsets] So which type of problem is your startup solving?

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Board seats give investors oversight on company decisions. Discuss balancing investor influence with founder autonomy. #StartupBoards 11/30 of Series Mastering Venture Capital: Insights for Startup Success

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Q3 funding data doesn't really clear up where Austin's innovation ecosystem stands post-bubble. The US is down, Austin is up, but then that's after a slow 1H 2024 for ATX. 🤷 Austin's Startup Funding Q3 2024: ● Q3: $1B (6th in US) ● YTD: $2.6B (7th in US), following sluggish Q1 & Q2 ($0.8B each) ● 2024 projection: $3.4B-$3.6B vs $4.2B in 2023 Q3 2024 Top Funding Rounds: ● Saronic Technologies $175M Series B (Austin's newest unicorn) ● webAI $43M Series A ● Infinitum $35M Series E ● Gymdesk $33M Growth Round ● Setpoint $31M Series B Sources: Pitchbook & CB Insights Austin pace is slower than the 2021-2023 boom and may be one of the few major metro areas to see a decrease from 2023.  My guess, we do not have the volume or scale of AI rounds driving many other metros. At the same time, we're still trending up compared to pre-bubble levels (2019: $3.2B, 2020: $2.7B). So, what’s going on? Is this just a temporary dip in the first half, a return to pre-2020 growth trajectory, or the start of a new trend?

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The "lotto effect" is a real problem for startups raising VC. You've struggled for years and suddenly you have $Ms in the bank. The first 6 months is a dangerous time. Here's how to avoid blowing up your team and your company. First, let's acknowledge that landing funding feels f****g great. It's a euphoric mix of validation, relief, and terror. The loss of financial constraints is exhilarating, the world is yours to take. 💪 Damn it, brain. The lotto effect occurs because a windfall gain interferes with our baseline judgements and future expectations. We get excessively optimistic about the future and our ability to engineer it. Risk On. And it's not just founders, it happens to VCs too. They are more aggressive early in their fund cycle than late, and new VCs are more aggressive than salty old vets. Being flush with new cash affects *everyone* because we're all slaves to dopamine. The good news is the lotto effect tends to be short term. Your expectations will reset to with time. So, to improve your chances of success, we want to limit our exposure to excessive risk taking while we are vulnerable. The best approach is to constrain your behavior in advance. Prior to the funding round do the following: - Set clear strategic objectives for growth and product based on your above forecasts. Be clear about order of operations, prioritize. - If you expect to raise again (e.g. series A), model performance criteria for that round now and work backwards. Set realistic metrics. - Create an operating budget with only modest increases in spending for 6-12mo. Plan to ramp spending gradually in line with performance data, not ahead of data. Scale growth ahead of spending. Stick to it. - Create an org. chart and a hiring plan that aligns with the strategic plan. Hire gradually to deliver the plan, not ahead of the plan. - Establish a monthly and quarterly performance review cadence for the executive team. Keep everyone accountable for progress. - Be highly skeptical of wishful thinking, magical hires, or multiple parallel 'strategies'. Focus on delivery and hypothesis validation, not hope. Common failure modes: - Lack of focus. i.e. pushing multiple initiatives in different markets. - Product bloat. Competing with everyone to capture everything. - Over hiring. Adding capacity instead of relieving critical constraints. - Over confidence. Poor executive control, excessive risk taking (short runways), under reliance on customer feedback or performance data. - Premature scaling. Fundraising doesn't fix product market fit. Throwing people at PMF problems usually ends in tears (see Humane). As a founder, you want to use the new capital to de-risk your investment, and then amplify it. Remember, for every dollar you spend you need to create $3-$5 dollars in enterprise value. Raised $5m? You need to create $15M-$25M in value. That's a huge task. Venture dollars are expensive. Good luck!

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What makes some VC-backed companies succeed, and others fail? I answered this question in Peak Teams. Check it out on Amazon. #venturebacked #vcbacked #venturecapital #leadership #ceo #founder #operatingsystem #peakOS

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That’s very accurate. PE Buyout Funds. Publicly traded parent companies with corporate VC arms scooping up the most profitable sector-specific subsidiaries. Fund of Funds get more popular and much more strategic. Family Offices dominate the landscape. Not investment advice.

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Reality, better - A moment possibly as big as the original iPhone: AR wearables bring AI to our physical spaces, enabling a whole new interface to enjoy, collaborate and connect with the world. As the world restricts smartphone based screens, a whole new world of Augmented Reality wearables stands to leapfrog how humans engage with their physical environment. It's wonderful to see Meta drive the everyday mainstream AR use cases: 1️⃣ Connect like never before through video calls embedded in heads up displays 2️⃣ Multi-task effortless through large field of views, replacing bulky screens 3️⃣ Access multimodal AI, through open LLM models, to drive intelligence in physical context 4️⃣ Collaborate with deep presence, independent of physical distance 5️⃣ All in a form factor that is light, comfortable and accessible - every day glasses... Congrats to Meta on their Orion product launch today. My daughters and I are big fans of your Ray Bay Meta glasses and am excited to try out the Orion... Excited too to talk to founders building at the intersection of AI x AR x Web3. Our interfaces for the web are evolving, customizing to either transactional lo-def (with command line chat or voice interfaces for AI agents) or emotive high-def (with AR or VR high definition interfaces for photo-realistic immersive experiences).

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