David Hegarty

After the first deep dive discussion w/ founders I often hear a comment "I wish I had heard about this alternative [to all-in must-become-a-unicorn] way to build a startup earlier as I have wasted years in pursuing the wrong thing". Our mission is that no founder would ever need to say that again as it is such a waste. Us preaching the gospel 1:1 just doesn't scale, hence we use mass media to multiply our efforts - that's how Gorillacast came to be. The 1st episode is out, featuring yours truly. "How can you know what food you like unless you taste everything" said a chef. How can founders make informed choices about the best strategy for them to follow unless they know of all alternatives? This might not be of interest to you but pls spread the word so that the founders who should hear it can find it. I have a dream!

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I’m thrilled to be announcing that Notion Capital is leading the $15m Series A investment in Cogna today. In the industry, we like to think that software has been eating the world. But when you look at the data a better description would be more of a nibble. Depending on what source you look at the software industry represents between 5-8% of global GDP. Contrast that with the services industry that represents between 60-70% of GDP and worth around $25 trillion on a global basis. Most services have been out of reach for the software industry. They have either been too complex or too specialized for off the shelf software to access in any economically viable way. But that’s beginnning to change with GenAI leading to the emergence of ‘service as a software.’ Cogna is at the forefront of this opportunity - building precision software at scale and delivering huge productivity gains for traditional industries. We know Ben Peters & Lars Mennen well having backed their previous company Five AI that was acquired by Bosch in 2022. And we’re very excited to be backing them again together with Hoxton Ventures & Chalfen Ventures Read my full blog post on why we invested here. Radu Bozga Ben Peters Lars Mennen Bryan G. Mike Chalfen Hussein Kanji Kirsten Connell https://lnkd.in/eh8mhcJb

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And my second investment at defy is in 🐶 zeroETL puppies 🐶... I mean PuppyGraph, which is all the beauty of a graph database, none of the data migration or continuous upkeep of a graph database. Sounds like magic? So are puppies 🐶 . Puppygraph is NOT a graph or a database. It is graph analytics engine that answers graph questions on your existing data warehouses, whether that is a Databricks datalake, Google BigQuery or postgres. Compared to SQL, it's faster, handles way more complexity, scales and has almost no upkeep. How did I get to conviction? 1. Tailwinds - 🌊 Lakehouses 🌊 have helped enterprises put all their data in one place, enabling Puppygraph to unlock insights previously unavailable. - 📚 LLMs! 📚AI and RAG cannot easily traverse fragmented data. Puppygraph's Graph RAG unlocks insights with their Knowledge Graph and spoonfeeds to the LLMs. 2. 👯 Team 👯 We have graph experts from Google, LinkedIn, Databricks, Tigergraph, and Instacart who are uniquely able to build this solution. 3. 💸 Customers 💸 . My alma mater Coinbase is a proud user. The feedback from my former colleagues was off the charts! A blockchain is very much a graph database and Puppygraph tracks down fraudulent transactions that go through mixers and helps identify patterns. Huge congrats to Weimo Liu Danfeng Xu Lei Huang Zhenni Wu Gary Hagmueller, defy.vc is proud to be an investor!!

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We love seeing founders be able to keep their equity and take advantage of non-dilutive funding sources⚒️. We're excited to collaborate with Stacy Chin, PhD leader of KeepYourEquity.co, who has secured over $15M in SBIR/STTR grants for startups across various sectors. She's written a guest blog post sharing her insights on navigating the competitive landscape of grant funding 💰. Some highlights: ❇️ Understanding SBIR/STTR: A lifeline for startups, offering up to $2 million in non-dilutive funding! ⏺️ Learning how to overcome hurdles and capitalize on the golden opportunity. ❇️ Gaining essential tips on outlining your go-to-market strategy, choosing the right program, and preparing thoroughly. ⏺️ Benefiting from Stacy Chin's 10+ years of grant writing experience and her extensive track record in securing funding for startups. Read More in the blog post linked in the comment below 👇🏾 #SBIR #STTR #GrantFunding #StartupSuccess #SmallBusiness #KeepYourEquityCo #ShayCPA #cpafirm #techaccountants #startupaccountants #techstartup #techcompany #nondilutivefunding

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Founders, what would you want to hear from a VC who loves your idea but is at capacity? It's a good problem to have, but right now at Developer Capital we have a full pipeline to diligence of incredible Founders and innovative ideas. Deal memos take him, talking to customers takes him, helping existing Portco's takes time. Time is our gating factor. But we keep meeting with Founders who's ideas we think are worth doing the work on. My current approach is to meet with these founders, but be transparent about our backlog. If they dont hear back from us for a couple weeks they shouldnt freak out. Is this the right approach? What would you want to hear from the VC in that spot? #VentureCapital #Founders #Startups #VCAdvice #Entrepreneurship #InvestorInsights #StartupJourney #Funding #Transparency #DeveloperCapital

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Wei D. (Founder and CEO of unicorn Clipboard Health) dropped some major 💎 gems of wisdom during her fireside chat with PearX founders at Pear VC SF Studio yesterday. These really resonated: 💎 PMF isn't something you achieve once - staying relevant to your market is an ongoing pursuit 💯 (Wei shared that to date she still LOVES talking with customers and - even at 1000+ employees and with all the success already achieved - she continues to chase unlocks for the business and recently obtained her nursing assistant certification in order to stay close to users and unlock new insights with them 🥇) 💎 If you're scared of sales, don't think of it as sales -- you're just talking to someone who you're trying to help. Approach your customers with care and listen to them as you would a friend. The moment it's an actual conversation with a friend, that's probably where you're going to get your first sale. If it feels "salesy" you're probably not doing it the right way. 🤝 💎 Do whatever it takes to get in front of your customers! (For Wei this meant driving around at 8 months pregnant and walking up to DMs at nursing homes!) 🚗 💎 The users you speak with in your market will give you the key jargon you need to use to speak back to your market. Listen intently and adopt their language! 🗣 💎 There is little you decide that can't be undone. Be smart, make calculated decisions, but don't overthink things --- err on the side of action and quick decision making. 🏃‍♀️ 💎 Iterate until your users feel passionately about what you're doing (ie. they get angry when the product is down or doesn't work). You want your users to care A LOT about the problem you're solving. 😡 Wei's resilience, grit and work ethic are off the charts. What an inspiration! 👏 #femalefounders #inspiration #techfounder #unicornfounder #hero

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The best things Founders can receive from investors (apart from term sheets) is feedback! At Funden, about 50% of pass notes come with some sort of feedback thats actionable and helpful to the Founder. Here’s an example of a pass note from earlier this month: “We focus on having live, paying enterprise customers with a repeatable, scalable sales process and line-of-sight to series-A financial metrics" Boom! That kind of transparency is unprecedented in the venture world. This type of feedback says, "Hey we're excited about the industry and product, but we need to just see a little more proof of concept on the business before we can dive deeper". Now, this founder has someone they can reach back out to, who is going to be familiar with them, and the Founder will now be right in their investable sweet spot! Another one we got recently was a few investors are telling the same founder, independently of one another, that their round size was far too big for their level of traction. Hearing the same type of feedback as to why they're passing in such a short period of time has a real and meaningful impact on how founders are structuring their raise. And we're happy to help them. https://lnkd.in/gZ_tVkTB ---------------------- Funden is the #1 fundraising platform connecting founders to capital. Founders use our tools and strategic guidance for quicker, more effective fundraises. Investors use us to receive curated, quality deal flow and broadcast co-investment opportunities to our audience of 1000+ global VCs, family funds, angel networks, syndicates, and more.

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Reminder that the Unusual Ventures Fall 2024 Academy application is OPEN! Deadline for submissions is 9/9. Are you a Founder who wants to: 1. Learn from world class leaders the best practices of building from insight to product-market fit? 2. Receive up to $2M in a SAFE to accelerate company building? 3. Join an unmatched community of founders who are eager to support and learn with you? 4. Dive deeply into the latest pricing, go to market, and infrastructure choices founders are making for their AI-native startups? Unusual Academy is for you and your team. Each cohort consists of a small group of hand-picked Founders who are in the early stages of building Enterprise Software businesses. Over eight weeks Founders will participate in a highly personalized set of workshops that drive the building of the foundation of a successful startup. Founders will work very closely with our team on how best to execute Customer Discovery and validate the insight for your startup. We then explore the nitty gritty details of doing customer outreach and working through the Design Partner phase. We take you through proven tactics on how to navigate early customer engagements through to contract conversations. Throughout Unusual Academy we work closely with each team to align product strategy with the optimal go to market approach for their market segment and product. With the advent of AI, Founders are faced with new challenges with regard to pricing, ROI, data security, and managing infrastructure costs; we share best practices and the latest adaptations from the leading startups. Unusual Academy is a program for Founders who want to learn from exceptional teachers and get hands-on with specialized examples and tools. For those who want to maximize their probability of building a successful startup, this program is for you. https://academy.unusual.vc

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At Forum we look at thousands of deals each year across our Accelerator and Pre-Seed funds but only end up investing in a little over 1% of those startups.  As an early stage VC, I am in the business of saying no to nearly every startup I meet, and while there is nuanced rationale for many of the startups I pass on, a vast majority of businesses that don’t meet the qualification to get funded typically fall into one of two buckets. ▪ First time founders have a tendency to go out to market too early to raise pre-seed capital ▪   I’m sure most founders have heard some iteration of this from VCs that ultimately pass on their business.  In some cases it's a blanket excuse covering up for other pass reasons- perhaps a VC doesn’t believe in a team or isn’t bullish on the market opportunity - but in many cases founders simply haven't proven enough to the market to warrant an investment. I meet many teams with an articulate vision for the product that they want to build, but they either haven't performed enough customer discovery to prove demand for their initial wedge product, or need to raise pre-seed capital to build out an MVP.  In those cases, pre-seed investors are unwilling to underwrite those risks.  To be default fundable, teams need to be able to keep costs low, perform extensive customer discovery, and ship some version of an early product - pilots and early paid customers are key. A huge piece of this is having founding engineering talent on the team. ▪Not every startup is a venture opportunity ▪ By definition, a venture backed business is solving a problem within a market opportunity so massive and so desperately needed, that its growth rate is off the charts.   It spreads like a weed, absorbing almost unlimited amounts of capital to fulfill demand within its customer base.   Each year there are maybe 20 companies launched that ultimately have venture scale outcomes. The bar to reach this rarified air is unfathomably high and the reality is the vast majority of founders simply aren’t building for opportunities that have the potential to be one of these generational companies. Many startup founders view VC as the only viable option for capitalizing their business, but not every great business is a venture business, and most successful founders never take VC dollars.  In order to reach an IPO/acquisition large enough to generate venture returns, a startup needs a credible path to $100s of millions in revenue. This is the standard by which early stage opportunities are evaluated. The flip side to this, and I share this feedback often with founders I meet that are building interesting business in non venture markets, if you are able to scale to $10- $20M in revenue that can be a massively successful outcome for a founder.  There are investors who focus on these type outcomes, namely lower middle market PE shops, and the typical path to those deals is a bootstrapped business or a friends/family capital raise.

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Just shipped this week's Diaspora.nz podcast with Paul Copplestone, founder & CEO at Supabase. We talk about: ⚡️why open source is an unfair advantage — as a product development strategy, supercharging recruiting, and helping build customer community. ⚡️how they are building the end-to-end tech stack for AI startups — seeing many customers grow into the millions of users in just weeks, growing to be one of the most tagged products by makers on Product Hunt + most redeemed Y Combinator “perks.” ⚡️raising $116M, and scaling to ~80 people in 30+ countries over the past 4.5 years, operating as a distributed + asynchronous team. ⚡️building three startups over nearly a decade living in South East Asia. Subscribe + listen links in comments below👇 Subscribe at diaspora.nz for weekly episodes 🎧👈

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Chat with Miles Clements about building Linear For me companies are like design problems: you have context, constraints & goals unique to you. Then you look for a solution that has a good fit to your unique problems. The company problem also evolve over times the solution Directly applying what others have done doesn’t work that well, yet there is lot emphasis on playbooks, pattern matching and playing copying what other companies are doing in industry. https://lnkd.in/ghxjJwYU

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Insightful breakdown from my great Partner Omri Amirav-Drory on the simple factors that really separate the top 1% of investors from the rest, and how more operators should become investors! https://lnkd.in/gEiZdT2h

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Want a front-row seat to the frontier of tech? We’ve got the role (or two) for you! We’re expanding our frontier-tech team at Blackbird by hiring a Frontier Tech Investments Associate and Foundry Fellows! Got questions? We've got answers... 1️⃣ What are the roles? 🧪 Associate = a full-time VC investment gig in our Blackbird Investments team, working directly with me. We’re looking for someone with a science and/or engineering background and more curiosity than they can handle. You’ll grow your own investment brand and practice, support our portfolio founders, and will help build Foundry, our early-stage frontier-tech accelerator. ✨ Foundry Fellow = a casual/contract gig in our Blackbird Investments team, ~15h per week for 3 months. The Fellowship is ideal for PhD students and ECRs who want to learn more about startups and VC. You’ll go deep on emerging areas relevant to your expertise (or curiosity!), get a front-row seat to groundbreaking companies in those areas, build out your non-academic network, and develop a solid writing practice. 2️⃣ Why are you hiring? We love frontier tech, and we’re ready to grow our team. 3️⃣ Wow, it’s so great that you’re starting to look at deep tech! Look, we get it: we don’t make a lot of noise about our frontier tech investing. Buuuut we’ve been deep-tech investors since we backed Tim Kentley-Klay to found Zoox back in 2014—we’ve been on incredible journeys with PsiQuantum (building the world's first utility-scale quantum computer right here in Australia!), Inventia Life Science (transforming drug discovery with high-fidelity cell models), Remedy Robotics (surgical robots for remote endovascular procedures), Opto Biosystems (minimally-invasive neural implants to treat cancer), and more. We believe that frontier technologies, and great frontier-tech investing, will be part of the solutions to the greatest problems humanity faces today. 4️⃣ When do applications close? May 31st at 11:59pm AEST. 5️⃣ I have more questions! I’m sure you do! Clare Birch and I are hosting an AMA to answer any and all questions about these roles. Want to know what a week in the life of our team looks like? What’s keeping us up at night? What our ideal candidate looks like? Come along and find out - registration link in the comments 👇 Apply for these roles: Associate - https://lnkd.in/gCfj4EUJ Foundry Fellowships - https://lnkd.in/gj6ATZVZ If you know anyone that we should meet, send me their details! Cameron Elise Ben Andrew Robin Joseph Adelaide James Olivia Lucinda Raghav Jesse Christie Mohamed Tom Amee Pablo Haya Loong Hon Joshua Benjamin Megan Harry Denzil Matthew Diana Daniel Tom Deanna Justin Amar Lilly Stone Thomas

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ICYMI I did what I think is a pretty useful super deep-dive on "Getting VC Funded in 2024" here: What it really takes to raise venture capital today, in 2024 - Stress in System - Why Everyone Seems to be Chasing AI - Where the Decacorns Are - Databricks and Canva - What a "Fund Returner" is in Venture Capital - How a $2B and a $100m VC Fund Make Money - What a Top Decile Startup Looks Like and Much More!! https://lnkd.in/gQWEGrGD

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💡 Sunday read. Was catching up on some reading today and enjoyed this TechCrunch article with Marc Lore. His comments about startups and taking risk - specifically seeking out risk specifically - is insightful. From the article 👇 "But startups are very different than big companies. When you’re at a big company like Walmart [whose U.S. e-commerce business Lore ran after selling it one of his companies], it’s all about incremental improvement. There’s no incentive to take risk. As a startup founder, chances are you’re going to die. Chances are you are going to die every day that you’re living and doing this startup. The probability is 80%, with only a 20% chance of this actually working. So you have to take that into account when you’re making decisions. You have to seek opportunities to take risk, to reduce your risk of dying. The status quo is the worst thing you can do. Doing nothing is the most risk you can possibly take." Full article here https://lnkd.in/gQhuyeiu

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I am beyond excited to unveil Rerail I, which is a labor of love and a vehicle for making my life’s passion a reality. Rerail I, is an angel fund, backed and supported by founders and operators. I invest $200-500k checks at pre-seed/seed into founders looking to utilize fintech as a strategic advantage, with a skew to Europe, but globally! Focused on people & networks I have always been people first. I have cultivated one of the deeper networks of founders and operators in Fintech (& beyond), which become an extension of my team to the founders I back. The power of being collaborative I only realised the power of being collaborative, when I started angel investing back in 2020. I was captured by the transparent, trusted conversations I could have with founders, and the collaboration with the rest of the investors, many of which I have grown up with. I formalized that with the first fund I co-founded, Cocoa, and look forward to amplify that further with Rerail Everything is Fintech  I believe that fintech is a horizontal, not a vertical; the support function of any market. From climate to healthcare and logistics, fintech supports every market. Fintech can also be a revenue model (e.g. vertical SaaS, marketplaces), a target customer, or just a business component. Rerail seeks to invest in founders that can utilize fintech not in fintech companies only With quality talent density at its highest, technological waves like AI, there’s never been a better time to start Rerail. To any entrepreneur out there starting something new where you think Rerail could be a fit, do not hesitate to reach out to [email protected] Can’t wait for the journey ahead 💥 🚀 -> https://rerail.vc -> https://lnkd.in/dn2uSfg7 P.S. A big thank you to Romain Dillet for the awesome TechCrunch coverage!

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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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