David White

If anyone is in North County San Diego, on Thursday May 2nd, we will be hosting a tech entrepreneur and investor meet up at 5:30pm. We’ll have a couple speakers, one of which is a fin-tech start-up raising a round, followed up by a presentation on the state of the stock & crypto market. We host these events quarterly and usually get a lot of founders and investors to attend. If anyone is interested, please message me and I can send you the details. LaunchPad San Diego #startups #startupincubator #entrepreneur #investing #crypto #meetup

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Series A Term Sheet Template

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I just met with the one of the top VCs in Phoenix. Here's how they believe AZ can be one of the top startup states in the next 10 years: 1. Company Formation ⏩ Starting more startups ⏩ Growing big companies ⏩ Selling for big exits 2. Capital Velocity ⏩ More investments into AZ startups ⏩ Reinvesting back into AZ once you've exited 3. Community Vibrancy ⏩ Small/Medium/Big creators hyping up AZ ⏩ Attractive events that bring true value And the community is thriving: Shawn Allard w/ private meetups for SMB owners Sean Huntington 🍯 w/ Founders N Funders events Josue Romero w/ AZ Tech Founder meetups Josue Romero and Daniela Santangelo with Freeway (amazing dashboard to see AZ venture stats + event calendar) No better time to be an AZ Founder 🌵🚀 *** Side Note: can we find a better name to unite the startup valley? YesPHX is okay Silicon Desert is okay but way too cliche at this point

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How to fix California? Subject of today's Daily Dipup. Cali's had it's ups (goldrush, SV, YC) and downs (quake, fires), but now we are way down. The only way to lift Cali back up is shrinking govt like @elonmusk is doing at #DOGE and supercharging innovation by founders & startups. If you live in Cali and want to lift it up again, comment below on what you think we need to do.

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To scale from $1M to $10M ARR, you need to turn your ad hoc GTM efforts into a well-oiled machine. This means creating repeatable processes across your entire GTM - from lead gen to sales to customer success. The good news for technical founders is that they're experts at solving complex engineering challenges with precision, efficiency, and structure. At this stage of startup growth, they need to apply that same systems-oriented mindset to GTM - which, for B2B startups, can be approached more as a science than an art. More in the May edition of B2BaCEO: https://lnkd.in/emsvFN9q

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You won't get to $10M ARR unless you establish a careful balance between delegation and hands-on involvement. Yes, you need to empower your team to do what they’re hired for. At the same time, no function can be devoid of your active involvement. (You have to do more than just read summary reports.) As fantastic as your team is in running their respective areas, their incentives differ from yours. When challenges and setbacks rear their heads, your marketing, finance, and other teams will work at them, but teammates won’t see it as life or death (like you do). Your teams bring valuable function-related expertise—still, you can’t distance yourself from their daily operations: Join customer calls. Be on every interview panel, regardless of the seniority level being hired for. Understand every function’s KPI—how else will you evaluate their performance? If you don’t immerse yourself in your business, you’ll lose sight of small malignant problems that may become terminal by the time you notice. Every challenge within your company is your responsibility. If things go south, your team (as sympathetic as they may be) will move on. By being informed at all levels, you give your company the best chance at $10M ARR.

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Founders from YC, A16z, TS backed startups I work with typically leverage one of these three strategies when hiring remotely Here's the breakdown: 👉 Direct Full-Time Hire: ↳Execution: Bring on board a full-time engineer with a direct contract. ↳Compensation: Pay through an Employer of Record (EOR) or directly via platforms like Payoneer or Wise. ↳Best for: Seamlessly integrating engineers into your core team who are poised for long-term growth with your startup. Ideal for roles that are central to your tech strategy. 👉 Full-Time via Employer of Record (EOR) ↳Execution: Employ a full-time engineer via an EOR, which takes care of all legal and administrative duties. ↳Compensation: The EOR manages payroll, taxes, and compliance concerns local to the engineer. ↳Best for: Startups aiming for quick scale without the hassle of navigating local labor laws and tax complexities. Perfect when expanding into new markets without establishing a local corporate presence. 👉 Staff Augmentation ↳Execution: Partner with a staffing agency that provides engineers on a contract basis. ↳Compensation: Pay the agency a rate that covers the engineer’s salary and a markup fee. ↳Best for: Startups needing to dynamically adjust their engineering teams to tackle project-specific demands or fill particular expertise gaps on a temporary basis. Ideal for short-duration projects requiring niche skills.

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It's interesting to see Keap get acquired for $80M at $85M annual revenue. Valuations aren't kind when revenue is declining. A good reminder of how hard it is to build long-term sustainable software. Keap (Infusionsoft) was the biggest platform used by professional creators back in the day. Positioning against them was key. One of our customers described ConvertKit as "The power of Infusionsoft, but easier to use than MailChimp" We sold millions off that line. Another key moment is when Pat Flynn was on Aweber he then migrated to Infusionsoft (what so many professionals did). THEN he came to ConvertKit. That ended up being far better for us. He wrote the headline: "Why I switched from Aweber to Infusionsoft to ConvertKit" Had he gone straight from Aweber to ConvertKit everyone would have said, "but you haven't used Infusionsoft." So his journey (not planned in advance) told a much more compelling story. The headline worked so well we even ran paid traffic directly to his blog post. As our product got stronger we started to get more direct migrations from Infusionsoft. That's where we had to staff up our concierge migrations because their automations were so complicated. Over the years we did thousands of migrations. Those have tapered off, but if you're a creator on Keap we're happy to get you migrated. No matter how complicated your setup is.

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How did a YC founder scale from $0 to $4M+ ARR in 6 months? What I learned surprised me: Getting to $200k ARR is possible through just hacking something together. But to break past the $1M ARR mark and keep scaling? To sign enterprise contracts with name brand companies? That's a different milestone. The fact that a technical founding did this and handled it all through founder-led sales is even more astounding. Surely, there must be some kind of secret sauce, some kind of unexplained context, I wondered. How did 2 technical founders who graduated college recently build something so robust, so performant and scalable, that they had enterprise companies lining up left and right? But no -- the founder let me know they did this through great engineering and sheer force of will. No proprietary edge. No silver spoon. No past domain experience. And in that moment, that simple answer made sense. We've also been speaking with amazing product engineers, many of them former founders, for whom things are just easy. Sometimes they cite great engineering mentorship as the key to their success. But more often than not, they simply "get it." And my team and I have over time honed our ability to naturally spot what makes a certain candidate special. It's a unique combination of high horsepower, high grit, incredibly sharp slope growth, and an ability to parachute into any problem and just figure things out. What seems like a quarter-long epic to some folks is a one-week project to others. New domains are never daunting. Never learned GPU inference optimization? No problem. I'll figure it out. This is the kind of talent that all startups need -- but understandably is truly rare to secure. This is the truly great, truly unique product engineer. And startups are rapidly learning how this kind of talent changes their own growth trajectory.

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An interesting article below, that demonstrates out how San Diego is punching above its weight.  And how Connect's strategy and execution over time, contintues to be central to that success. The article describes the current state of the market in Seattle.  (And i love Seattle.) It's a market that we tend to track with relative to venture fundings.  They used to kick our butts, we outraised them each of the last three years.  This despite the fact they have 3x as many funds there, and 9x the amount of resident capital there. (per pitchbook) Some key takeaways:  * They continue to compare themselves to SIlicon Valley. Instead, we leverage our proximity. *They whine there's not enough local investors (see note above - they have more than us). We bring over 200 VCs to SD annually! * They say founders are not connected with one another. We bring CEOs together regularly, in a variety of ways - private dinners and through our Springboard program. * They say they need to elevate their image on a national & international stage. Why we created and continue to build Five.Ten.Thirty (aka Inno Day).  * And the last paragraph - they need to concentrate on making their region a great place to live. Our mantra: "It's about Better, not Bigger." (See XEO, TL Fund). THANK YOU FOR ALL OF YOUR SUPPORT. WE ARE ON A MISSION TOGETHER!!!  (Comments, whining, suggestions on SD always welcome.) https://lnkd.in/g6Rq_f2Y

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20 meetings w/ investors and startups in 3 days around SF/Bay Area. Here's what’s happening in hiring right now: 1) Elite engineers demand elite offers. Early-stage startups are winning top talent by paying up (sometimes as high as $250k-$300k + equity). 2) Startups are prioritizing candidates with brand names, interest in startups, history of solving complex problems, ambition, higher ego (not too high). 3) The best candidates have clarity on career direction. Some good questions I heard founders ask, “Where are you going?” and “How can we help you get there?” 4) Despite early funding surges in Q1/Q2, investors are becoming more selective - especially in AI.  This creates an opportunity for startups to hire from struggling shops with top talent. Invest now before the market shifts again.

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Today is Workstream’s 7th birthday! 7 years ago today --- Max, Lei and myself started Workstream after going door to door around San Francisco Bay Area talking to hundreds of business owners and learning that there was not a good all in one solution built for hourly businesses. Business owners were doing manual tasks from payroll, onboarding, hiring to HR tasks and spending 10s of hours each week manually running HR processes. Therefore, we started Workstream together! We have never looked back since. On our 7th birthday, I like to share 7 learnings from the past years 1/ Find truly great co-founders to be on this journey together I am incredible thankful to say I found not one, but two amazing co-founders. Just last week, Max, Lei and myself had our usual weekly sync and we had a 6+ hours call on Friday late night till midnight. To be able to be at it for 7 years, and still feel the same passion, determination and drive -- I'm thankful to have met the best co-founders one can ever have! 2/ Find a pain point that you want to invest 10 or 15 years in To build something great, you need time. Media and PR often glamorizes businesses & startups growing overnight. That is often not the truth. Choose wisely what you really want to spend 10 or 15 years on, because you will spend that and more on it. 3/ The team you build is the company you build Find great people who align with you on values, mission and purpose. The people you hire and work with is the team you build = the company and product you will build for your customers. 4/ Embrace the lows and highs Building a business is not easy. There's more lows than highs on the average, but one should learn to embrace both of them. Michael Jordan often says "I've missed more than 9,000 shots in my career. I've lost almost 300 games. I've failed over and over and over again in my life. That's why I win" 5/ Find a mission and purpose you care about Both my parents are hourly workers and I grew up seeing how hard it is for hourly businesses to manage payroll, HR and hiring all in the same place. Find a calling that you really want to work on and care about, despite the lows and highs. 6/ Go all-in 120% Building a business, whether you are an early employee/streamer or a founder, is extremely hard. We need to go all in to have a chance at winning. 7/ Enjoy the journey The days are long but the years are short. Enjoy the journey! Happy birthday, Workstream! P.S Photo was taken in 2018 when Workstream was a 6 months old baby (I would say we all looked younger back then too!) as we were outside our co-working space in San Francisco at South Park / Soma.

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Yesterday I spoke with a VC partner. He asked me: "What the heck is going on in this market?" The origin of this question? Team compositions are changing faster than ever. And their portcos? They seem like they're slower to hire than before. Sub-10 person teams raising Series A rounds are now more normal. And that big Series A round from a Tier 1 firm? It's not being spent on hiring an entirely new layer of VPs. In fact, we signed two clients yesterday that show this exact trend. Both are multimillion ARR, well known investors (Sequoia, etc.), rising traction. But they're just looking to add talented ICs. One has a CTO who operates as an IC, and gently leads a team of 12 engineers without spending too much time managing them. They believe they can keep on scaling this way. Another is a team of sub-15, strong traction. But are they looking for a VP Sales, VP Eng, or VP Product? Not at all. More and more, this appears to be the new normal -- lean and mean. Relentless forward progress with talented ICs. Less management, more action. "Founder mode" is all the rage these days, but Paul Graham's article spoke to something that was already in motion. ZIRP fueled a lot of unnecessary hiring, and across the board I'm seeing a tension now arise between founders and VCs. Their VCs want them to hire. Hiring helps derisk the business, after all! But the founders want to play a different game. No VP Sales - just a sales lead who's in the trenches, alonside some AEs. No VP Eng - just a few tech leads on key parts of the platform. No VP CS - maybe a CS manager, at best. A year ago, I reflected on the doldrums of the tech recession and thought that a reset might be healthier for the ecosystem. And what we're seeing now is exactly that. Founders are in building mode. Hires are expected to build next to them. And that dangerously toxic empire-building mindset that still pervades FAANG orgs but has always harmed startups? It's totally out at the early stage. Complete red flag from day one for people that just want to come in, hire teams, and do "strategy." And founders have developed a nose to sniff it out. We're now in the days of GSD mode. 💪

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Venture Capital Contact Compilation. Explore a detailed list of 1,250+ VC firms, 7,400+ professionals in the VC space (including partners and principals), and 6,400 email contacts. https://payhip.com/b/cs7UQ #startup #startups #vc #venturecapital #investmentbanking #privateequity #managementconsulting #b2b #founders #entrepreneurs

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Retention.com ended May up 1.1% at $21.7m ARR, but still below our Dec ‘23 high of $22.1m ARR. RB2B closed the month at $622k ARR (+300% m-o-m). Here’s the good, the bad, and the ugly of May 2024: If you’ve been following along from home... We had four down months in a row (Jan - Apr). April was the biggest down month: - 2.3%. The hardest LinkedIn post I ever wrote was that April monthly update: - We were down for the 4th month. - We were down more than prior months. - The market dynamics had changed completely. - We had competition coming from everywhere, big pricing pressure. - Our churn problem seemed to be getting worse, no matter what we did. The hardest part of that entire post was admitting that I had no idea when it would end. It was even harder listening to our execs tell me that the post read horribly from our employees perspective. But here’s what I knew when I posted that post... We were (arguably, still are) just stuck again. My entire journey has been getting stuck, then getting un-stuck again. I knew we would figure out how to move forward again. If we just kept going, we would figure out: - Exactly how to navigate the new competitive environment - How and what we could do that others couldn’t do  - How to improve efficiency and get in front of churn I don’t think we’re out of the woods yet, but we are on the right track. Retention(.)com team - I’m proud of you. Keep it up! We’re going to emerge on the other side much stronger. Retention(.)com Highlights: - We continued the roll-out of EOS - We are ahead of our Q2 sales target - We’re seeing an increase in our expansion revenue - Average deal size is up around 7% this Q - Canceled revenue is down 18% this Q - 375 people are signed up for our 2nd Retox event - We launched a new Reclaim flow - “active onsite”  - We made significant progress on our SFMC Reclaim integration We generated around $600k of free cash, which offsets some of the free cash miss last month (which was around $300k). RB2B Highlights: - $622k ARR 12 weeks post launch, team of 5 (welcome Jeff Hall) - Still only have a 1.3% conversion rate - We’re going to push out a credit system (lower prices) next week - We are experimenting with a two-touch sales motion next week - We have our first full-time salesperson starting July 1 - Human support down from 8.4% to 3.2% of total interactions - We’ve started to see an uptick in UGC - 3 last week, 7 this week All things considered, May was a pretty good month. There aren’t too many negative things to dwell on. Pretty soon we’re going to start including RB2B ARR in the top line ARR number. That, to me, is the life we have chosen. Get stuck. Figure something else out. Grow again. Doing what we do is not easy. But when you find a new growth lever, it’s sooooooooo satisfying. The good news is I’ll keep reporting everything so you can be a part of the journey. Keep building.

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This doesn’t mean coding is dead (sorry, Jensen Huang). Instead, what we are seeing is how deeply polarized the tech market has become in 2024 and how wide the gap is growing. Fewer tech jobs = fewer tech companies hiring. And traditional SaaS companies are at the center of this shift. Because: 1) VC money isn’t flowing like it used to. Historically, most of the VC capital raised by tech startups went to hiring and customer acquisition. Now, with funding rounds slowing, there’s less cash to fuel headcount growth. 2) Growth has stalled. Many SaaS companies are paying the price for their “growth at all costs” phase, especially now that the ZIRP era is over. There's a ton of zombie companies out there—still walking, but essentially dead. Some are going for “life raft” options: selling at lower multiples, turning to private equity, acqui-hires, or raising funds at steeply diluted valuations. And of course, this means no expansion, hiring freezes, or worse—mass layoffs after the 2022 bubble burst. Now, on the other side of the gap is AI, grabbing all the money, headlines, and triple-digit growth. But even within AI, there are two distinct markets. 1) Core AI infrastructure – AI-focused hardware, software, and services. 2) AI-embedded companies – Businesses that natively integrate AI (like LLMs) into their applications. In 2024, every company is calling itself an “AI company,” slapping AI into their apps or pitch decks to ride the hype wave. This approach works for now—they’re raising capital, iterating, and searching for product-market fit. But in 5–10 years? Many of these companies might not be sustainable. Their AI offerings are often easy to replicate, and their competitive edge fades quickly. Moat-less. The good news is, we are starting to see more enterprise spending in the application layer and I think more value is being created. Agentic applications are really moving the needle now. Which is critical - the entire AI movement rests on the future of application builders. AI infrastructure, on the other hand, has more staying power IMO. These companies—especially those working on hardware—are playing the long game. Yes, they’re capital-intensive, but the opportunity is massive. The proverbial diamond mine of AI is far from fully explored. And as history shows, the ones selling the tools to dig the mine will often be the biggest winners. What do you think? Let me know your thoughts. P.S. Great data from Bigdata.com and Linas Beliūnas

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What do you do when you don’t want to raise venture funding, or don’t have the option? Jive got started in 2001—my first day with the founders was September 11. We had no other choice but to bootstrap, which we did for five years. Eventually, we reached a crucible moment: We could stay independent and bootstrapped, or we could ride the social software trend to something much larger—but we’d have to raise money. I spoke with Lighter Capital CEO Melissa Widner about what it took to take Jive from a small open-source project to an IPO-ready SaaS business, and how it shaped my ideas on when and how to fund startups to optimize success. It’s not about funding versus bootstrapping, but about when and how much. Check it out here: https://lnkd.in/gDQSmuFy #Entrepreneurship #Startups #VC #IPO #Reignition

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“Build it, and they will come." Many technical founders I talk to think this way. Understandably so. For many, creating cutting-edge technology is what drew them to entrepreneurship in the first place. But seasoned founders like Mohit Aron know that things don’t work this way. GTM innovation is just as, if not more, important than product innovation. You can have the best product in the world, but your business won’t succeed unless you can get it in front of the right customers and convince them to buy it. Here's our full conversation: https://lnkd.in/gkxKit5s

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Most people don’t know that when a practical SaaS company raises money from a growth equity investor or private equity investor, those dollars mostly go to the founders. It’s not risky rocket fuel for the business like the VC funding game. It’s mostly money off the table—a partial exit prize—for the savvy founders who created fuel-efficient businesses with steady growth. This practical world of growing and funding unsexy B2B SaaS companies is where most of the action is in the software business right now. It’s also where founders are winning more overall. These founders created valuable companies, and they kept their option to sell all or part of the business when it made sense to them. Growth equity investors play a huge role in helping successful SaaS founders take money off the table and keep growing their practical software businesses. In this week’s podcast, I discussed the world of growth equity investment with Philip Dur, a 20-year investor veteran and managing partner of PeakSpan Capital. PeakSpan Capital is a growth equity investment firm that works with bootstrapped SaaS founders who are scaling up to become sizable market leaders. Phil has been funding capital-efficient software founders for over 20 years and has served on 40 boards with those companies. Phil explains that the growth equity approach is almost the opposite of the VC investment game. For starters, Phil works with founders who want to keep growing their business but still retain the option to sell all or part of it at practical points along the way. Founders can’t do that when they take on big VC funding. In the venture world, it’s go big or go home, but it’s the opposite with growth equity partners. As Phil describes it: “I recommend every founder do some honest reflection and ask yourself, what is really the first exit value where I might want to transact and sell all or a part of my business? “If you raised or want to raise outside capital, make sure that your investment partners are making interesting returns at that outcome so you can make it happen if there's a great place for you to pursue liquidity. “Alignment and optionality are two unsung heroes that are hugely beneficial to bootstrapped and capital-efficient founders. Growth equity aligns with that. "You have the option to raise outside capital or not and the ability to sell all or part of your business at the right time. Alignment with your founders and any practical investment partners is required to be able to do that. "I think every time you raise, you should take secondary and take a little bit off the table." VCs and VC-funded founders don’t try to keep their optionality. That’s just one way that growth equity is different than venture funding. Phil describes more ways that growth equity can be practical and useful on the Practical Founders Podcast this week. Listen to this podcast here. https://lnkd.in/giawRYuS #practicalfounders

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