Dean Shu

As a B2B SaaS VC 👩‍💻 and a huge data nerd 🤓, fewer things bring me more joy than a truly statistically significant analysis (600+ companies surveyed) of B2B SaaS metrics across early stage companies. Great work by our team at Emergence Capital! See comments for full report, and please let us know how we can make this better in the future!

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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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Did you know that 68% of small businesses report having cash flow problems, and many small businesses rely on the owner's personal funds to stay afloat? Relay exists to solve this and the best part is it's actually working! Which makes this announcement even sweeter: We raised a USD $32.2 million Series B round. What does this mean? - More spend management tools to improve financial visibility - More products to give small business owners flexibility - More integrations to streamline operations - And ultimately more businesses making better and smarter financial decisions Exciting times ahead! PS We're hiring: https://lnkd.in/gMT2mN25

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Venture-backed teams need an operating system built for venture-backed companies. That's why I created Peak OS. You can read about how to get started today in my bestselling book, Peak Teams--or just come on down to the Collective Genius site and let's talk. #venturebacked #vcbacked #venturecapital #leadership #ceo #founder #operatingsystem #peakOS

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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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VC funding in healthcare has been more resilient than in other industries. Here are some key takeaways from recent Carta data: 👉 At the priced seed, Series A, and Series B stages, dilution for health startups has noticeably decreased, while dilution for SaaS startups has stayed flat or increased slightly. 👉 In priced seed rounds, median dilution for healthcare companies dipped to 14.2%, compared to 20% for SaaS.  👉 The frequency of bridge rounds surged in the health sector in Q1, jumping to 44.3% from 36.9% in Q4 2023. This is the first significant increase in bridge rounds in healthcare over SaaS since early 2022. 👉 More founder-friendly terms for health startups may result from enduring VC interest since COVID. Healthcare has remained strong through economic turmoil, enabling higher valuations with smaller round sizes. What are the implications? The healthcare sector might see a rise in new ventures due to favorable investment conditions and lower dilution rates. The surge in bridge rounds suggests that certain sectors within healthcare face unique challenges that require interim financing solutions. Founders and investors in the healthcare space- what are your thoughts on this? I’d love to hear from you. If you know a founder innovating in healthcare, tag them in the comments! The Artemis Fund is especially interested in groundbreaking care tech companies. You can check out Carta’s full blog linked in the comments. If you haven’t read our latest blog on care tech, you’ll find that there too. #healthcare #caretech #fundraising

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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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On my way to London to work with a portfolio company at their QBR and annual planning process. Another example where having investors on your cap table that understand how to build companies vs just show up and pontificate at your board meetings will help you to build world class outcomes. Remember why we do this - build world class organizations that drive meaningful economic outcomes for employees, customers, shareholders, and investors. Lead from the Front!!! #vc #growth #venturecapital

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🚀 Join the Rebellion – Support Omniverse City! 🌍 While other UGC platforms profit from their users and provide limited scalability, we’re building a platform for the users, by the users. At Omniverse City, we’re not backed by venture capitalists or driven by investors—we’re a community-led, self-funded platform where creators come first. By signing up for a Residential License or Commercial License, you’re supporting: A platform built by its community, not investors. Policies that benefit you, the user, because we’re users too. A revolution in virtual worlds that puts creators in control. Omniverse City isn’t just another platform—it’s a rebellion against the corporate-driven models that dominate the industry. Join us today and help build a world where the builders comes first. 💪 Visit us at https://theomniverse.city and join the revolution. #OmniverseCity #Metaverse #UGC #CommunityDriven #VirtualWorlds #Innovation #VCFree

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🤖 Growth marketing agents 🤖 - they're getting smarter and more capable thanks to next gen tooling and infrastructure Just chatted with Isabelle Hughes and Vishal Khanna from Exa - they're building some awesome embeddings-based search tools. Here's a few of the top use cases I walked away with that are relevant for above-the-API growth marketers and cold emailers 1️⃣ Finding lookalike companies based on embeddings Exa claims to have the smartest lookalike search and deepest indexes of any company doing lookalike modeling I've talked to recently. What they've done differently is build a smarter 'looker-upper' (using more than just raw cosine-similarity), and not just a bigger database of things to look up 2️⃣ Finding recent company news Run API calls through Exa API to find nuanced articles related to your target prospects companies Pricing is a bit expensive if you're a volume maxie cannon loader, but for lower volume enterprise-y type stuff in Clay this might be a great substitute for other data providers 3️⃣ Automated newsletter generation Everyone wants a newsletter but nobody wants to actually read the news. Might actually build a product around this one, but pull in recent news using Exa about any topic, summarize with an LLM, feed it a template, and off you go with your shiny newsletter 4️⃣ Automated technical white paper creation This type of content can be tricky for marketers in technical industries Here's what I'd do: Scope the outline of a 60 page white paper using a best-in-class AI model, and instead of using the out of the box outputs for each step in the outline, loop in an Exa search for the top 10 technical content pieces (using Exa's nuanced embedding-based search) to provide RAG context for each section's prompt. The result should be a technically-informed, super relevant full length white-paper. (Might build that one myself too) Looks cool Exa keep it up

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Curious about how an internal messaging tool skyrocketed to unicorn status in under a year? 🤔 And how Stewart Butterfield and the Slack team tackled a “Cold Start Problem”? Catch the final installment of my startup success series on Slack in Part 3! If you missed Parts 1 & 2, be sure to check those out as well. Special mentions: GV (Google Ventures) and Kleiner Perkins #Slack #StartupSuccess #ColdStartProblem #gaming #entrepreneur #venturecapital #investing

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SOOOO many PE acquisitions happening right now (Good companies that got bad VC terms) Problem??👇 Once you acquire them, you realize their ops suck. ↳ (unsophisticated) very few internal systems or processes 🤦‍♂️ ↳ everything is “growth hacked” 🥴 ↳ they’re not positioned for maximum valuation 🙄 ↳ teams are under utilized (but often EXTRAORDINARILY talented) ↳ no concept of capital origination… seeing a lot of this on Captal.co So how does Captal help?? Companies can quickly restructure to maximize VALUATION Hint: on average each company that joins, results in the formation of 4.3 new orgs (🤫 family offices love us for this) Cheers 🥂 to #raisingvaluations

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Paul Graham’s article on ‘Founder Mode’ versus ‘Manager Mode’ for managing a company is spot on! It aligns closely with what Peerdom facilitates. "In effect there are two different ways to run a company: founder mode and manager mode. Till now most people even in Silicon Valley have implicitly assumed that scaling a startup meant switching to manager mode. But we can infer the existence of another mode from the dismay of founders who've tried it, and the success of their attempts to escape from it. There are as far as I know no books specifically about founder mode. Business schools don't know it exists. All we have so far are the experiments of individual founders who've been figuring it out for themselves. But now that we know what we're looking for, we can search for it. I hope in a few years founder mode will be as well understood as manager mode. We can already guess at some of the ways it will differ. The way managers are taught to run companies seems to be like modular design in the sense that you treat subtrees of the org chart as black boxes. You tell your direct reports what to do, and it's up to them to figure out how. But you don't get involved in the details of what they do. That would be micromanaging them, which is bad." Source: https://lnkd.in/e3dPKa9e

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I loved Hannah Clark and Daniel Danker 's recent podcast episode. The best piece of advice was on scaling product organizations. Daniel mentioned that when scaling, he avoids the trap of more of the same and instead figures out what they should be doing as he scales. To paraphrase, what are the 10X ideas that they should incorporate? Check it out here: https://lnkd.in/guYMfMm3

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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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Dismissing my comments (presented in context or not) on a TCA panel yesterday “clumsy” would ignore a much larger issue in the tech and startup ecosystem.  I feel obliged to tackle this head-on. When I meant by founders being “deeply flawed” was that they typically have an obsession with the problem they’re solving in a way that not everyone understands. This often comes from complex lived experiences and over indexing on a few key super powers. “Problem children” was not the best way of putting it either. I mean those who break the mould in their own inimitable way to pull off the improbable and build a company from scratch. That doesn’t mean we accept or tolerate brilliant jerks. Harassment, bullying, sexism and toxic behaviours aren’t acceptable in the workplace or elsewhere for that matter. No one is protected or exempt from this. As an investor and board member, I have a legal and moral responsibility to root out these behaviours. For me personally, if the founders we back are arseholes who behave badly, we’ve failed miserably at building a fund with a positive impact that would outlast us all. This is core to our mission and values at Airtree.  Trust, safety and respect at work aren’t nice-to-have. They are fundamental. This is a belief shared by Airtree’s partners, our team and many others in our community, including founders, who are building generational companies and positive workplace cultures. If this isn't a given for a founder, they should be called out and held to account. And rightly so. Craig

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A post from Rob at Balderton Capital pointed me at this piece from TechCrunch, and it perfectly aligns with what I've seen in the market: When things (aka: building businesses) are getting harder, founders seem to be more aware of how to structure ownership within their team. I've recently seen a few transactions where mostly experienced founders insist on longer vesting schedules for them and their team (👋🏻 Mario from Enpal revealing this week the whole company runs on 7y vesting schedules). Avoiding dead capital on the cap table is one of the key priorities we try to make founders aware of when raising rounds - be cautious with part-time, non-operative 'co-initiators', professors, accelerators or angels that don't add much value beyond the very initial stages, or co-founders that decide to move on. Enforcing strong (read: long) vesting mechanisms including cliffs (no need to stick to the 1y cliff market standard either) can be a simple mechanism to align interests for the long-term.

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Have you ever looked for theory that can answer - how to approach investors - what kind of product to build first - how you’ll defend the company against competitors This new article from CDA partner, Kevin Maney extends Steven Johnson's writing from the book Emergence to #CategoryDesign. All #Startups and #VentureCapital teams should dig in. (link to article in comments)

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