Andy Preikschat

Valuations are starting to (only slightly) be in check. Investors looking for revenue, quality of revenue, margins, and repeatable GTM. This has the best founders focused on what matters, and reaching out to their Boards and advisors for real advice and guidance. Good stuff.

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🌟Innovative VC Firm Overcomes Exits Drought with Secondary Sales🌟 ⛵Navigating a challenging landscape where exits are scarce, Santa Barbara Venture Partners (SBVP) has pioneered a novel approach to sustain its growth and attract investors for its second fund: secondary sales. Instead of waiting for traditional exits like IPOs or acquisitions, SBVP opted to sell shares of its portfolio companies, demonstrating its ability to generate returns for investors and stand out in a competitive market. 🎤According to Dan Engel, founder and managing partner of SBVP, these secondary transactions have been a game-changer, sparking investor interest and bolstering the firm's credibility. By leveraging its recent successes, including a lucrative stake in sports-betting company DraftKings Inc.' acquisition of digital lottery app Jackpocket, SBVP seized the opportunity to return profits to its limited partners (LPs) and pave the way for its second fund. 💡Engel highlighted the challenges faced by young VC firms in raising subsequent funds, particularly amid a downturn in exit activity and heightened investor scrutiny. With traditional exit routes becoming increasingly elusive, the pressure is on for firms to demonstrate tangible returns and establish a track record of success. ✨"For us, secondary sales have been a game-changer. They've helped us return profits to our LPs and attract investors for our second fund," said Dan Engel. 💰For SBVP, the decision to pursue secondary sales was driven by the need to provide liquidity to LPs and validate its investment thesis in the eyes of prospective investors. By strategically offloading portions of its holdings in high-performing portfolio companies like Bark Technologies and Rad AI, SBVP not only generated substantial returns but also bolstered investor confidence in its ability to deliver results. ⚠Despite the complexities and potential stigma associated with early share sales, Engel emphasized the importance of prioritizing investor returns and seizing opportunities to unlock value for stakeholders. With a focus on profitability and transparency, SBVP remains committed to its mission of delivering sustainable growth and maximizing returns for its LPs. 🔍 "Returning profits to our investors is our top priority. By strategically selling shares, we're proving our commitment to delivering results and driving value for our stakeholders," added Engel. As SBVP continues to explore secondary transactions and expand its investor base, the firm stands as a testament to innovation and resilience in the face of market challenges. 🚀 ✅ Looking to raise capital for your #fund and increase the international pool of your LP #investors?   🤝 Need warm #LP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments?   ▶ G+QUANT's link for inquiries and fund decks: https://lnkd.in/gjC_EuTE #VCInnovation #SecondarySalesSuccess #InvestorReturns #ValueCreation 

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Having a Cars and Capital event tomorrow in Southern California with Oren Klaff. If you want to join message me. https://lnkd.in/gDQ4D39u Oren Klaff Bridger Pennington #InvestorEvent #FamilyOffice #InvestmentOpportunity #CarlsbadEvent #PrivateEquity #WealthManagement #InvestmentConference #CapitalRaising #NetworkingEvent #IndustryLeaders #FinancialGrowth #InvestorsMeetup #WealthBuilding #BusinessGrowth #InvestmentForum

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Exciting news for startups! California accounts for about 50% of all venture investments. The not-so-secret reason is that non-competes are illegal in California, so engineers at FAANGs can build competitors without fear. Today, the US Federal Trade Commission declared non-compete agreements illegal nationwide. This means that engineers at big tech companies can now leave and build their own companies without fear of violating a non-competes (legacy agreements for executives are still enforceable - talk to your lawyer), this is a step in the right direction for fostering innovation and competition across the country. A variety of big-business groups have vowed to sue to bring non-competes back, but at least for now, they're gone! #startups #innovation #competition #noncompete Official Announcement: https://lnkd.in/gRXUpgDy Impending lawsuit: https://lnkd.in/gqSiVuTd

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Why Buying Your First Business is the hardest & Financing The Fear is Being seen as too risky by lenders and investors. The Solution: Prepare a solid business plan with detailed financial projections. Work with a financial advisor to enhance your credibility. Consider alternative financing options like SBA loans or seller financing.

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Demystifying the C-Suite… 🚀 Secret to successfully scaling your business I am always surprised at how confused management teams are about the role of each c-suite member. Ok, so the CFO may be more obvious - tracking the $$$ But what about the CEO vs COO??? Regardless of the size of a business, we like having both a CEO and COO. It’s the secret to successfully growing your business. 🚀 ❌ We have found that if the CEO is handling all operational issues, the business stagnates… As I like to say, the CEO should be working ON the business, while the COO is working IN the business. The CEO can't do both. So… ✅ CEO needs to focus on strategy, growth and clients ✅ COO makes sure the company is executing seamlessly - operations ✅ CFO makes sure we are making money! What does your management team look like? BTW, don’t forget about your CHRO, without the right people, you are sure to fail!

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Pitch decks should be updated monthly during an active raise. Most importantly, numbers and traction should be current. Plus, investor questions and feedback can give insight to continually improve the story + how you present it.

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Interesting post by Howard (Lee) Mosbacker IV, PhD on changing VC thinking in non Silicon Valley ecosystems. And yes, things have got to change. Howard argues that we need an active secondary market for VC positions at Series A rather than wait for those companies to become Decacorns. I completely agree... to an extent. Those secondary markets already exist, however. They are called stock markets. Hear me out. The VC world is so obsessed with Decacorn NASDAQ listings, that they've forgotten what built our industry. CISCO, Nvidia, AMD, Adobe, Amazon, Intel, all IPOd at sub $500m valuations. Companies are now being advised to wait until they have $500 Million in ARR before listing. This is madness. To be fair, U.S. Securities and Exchange Commission rules and our litigious culture make a US IPO at a sub $1B valuation extremely difficult. Costs in the US are too high. Other global stock markets don't have that problem. For instance, on the LSEG (London Stock Exchange Group) AIM market companies regularly IPO doing $10-20m in ARR growing 30% a year. IPO costs are 30% vs US costs, the US has more class action shareholder lawsuits in a year than the LSEG (London Stock Exchange Group) has had in a decade. IN 2021, the LSEG (London Stock Exchange Group) had ~160 IPOs with an _average_ valuation of $100million. There's similar great small cap programs at the ASX, TSX Group and Euronext. The problem isn't the lack of a secondary market. The problem is that US VC's and board members don't look beyond the US to IPO. Maybe we should think outside of the box on this a little. BTW, I buy post Series B secondaries at Practical Venture Capital, and project manage small cap IPOs as a side hustle. You know... BYOL ( Bring Your Own Liquidity ) What would your fund's returns look like if you could get liquid at Series B?

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I'm excited to announce our newest product💥 💥 𝐓𝐡𝐞 𝐍𝐞𝐯𝐚𝐝𝐚 𝐃𝐲𝐧𝐚𝐬𝐭𝐲 𝐭𝐫𝐮𝐬𝐭 **You do not need to live in Nevada to use this trust. You just need a licensed Nevada trustee. This product works best for: ▶ Startup founders and execs ▶ VC and PE investors The benefits of this trust include: ---> ZERO state capital gains tax (Nevada is a 0 tax state) ---> Bulletproof asset protection (better than a prenup) ---> Unlimited QSBS potential (you can stack trusts to eliminate federal taxes) My cofounders and I started Dynasty 2 years ago specifically to bring this product to market 🤠 We were 1st employees at Carta and were fortunate enough to take some money off the table. But we paid enormous taxes (over 50%)! On the flip side we met a serial founder who leveraged Dynasty trusts and paid ZERO taxes on over $50m in capital gains 😮 The second we heard about this, we knew we needed to start Dynasty so this product could be available to everyone... So if you are a founder, investor, or anyone with high growth assets - check us out!

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If you're going to Co-GP with someone you have a few options on how you set that up. 1. One entity with solid docs. 2. Two separate GP entities for each person and they own their percentage of the deal. 3. Holding company and two GP entities being the owners of said Hold Co. The amount of time and legal fees spent setting up and then amending and or shutting down and starting over as a single entity GP isn't always worth it unless you're the majority owner, which is why I recommend the other two options, but to each their own of course!

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Launched in 1983 and discontinued in 1985, the Coleco Adam computer was heavily criticized upon launch for numerous defects in early units. About 60 percent of Adam owners returned their units because of the defects leading to Coleco filing for bankruptcy. It’s important not to scale go-to-market until you’ve had repeatable success with your product. I explain more about lessons from product flops in my blog: https://lnkd.in/gBAuMS8m My hobby of collecting artifacts from failed companies and products can be seen at www.failure.museum. I feature over 1000 items and their story of failure. Please check out the website and let me know if I'm missing any failed companies or products. Failure Museum

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A highlight from the Small Business Expo in SF yesterday: use the "present, past, future" framework when networking to guide your conversation. Present: What are you responsible for in X role today? Past: What inspired you to launch Y company? Future: What are you hoping to accomplish this quarter? I've never seen a conference host a panel on networking for introverts. Given how full the room was, I thought it was a great way to break the ice for many of the small business owners in the room.

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The state of venture capital is wild right now. We are witnessing a surge of innovation across the spectrum: - Funds merging - VC doing PE - PE doing VC - Secondary funds - Buyout funds - Spin-out funds - Debt funds - Continuation funds - Infrastructure funds - GP turnover - Hard Tech surging - Family Office uptick

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Great question by Jason Long on a previous thread ( link in comments below): """ I'd be curious to understand the SECs rationale for making sub-$1B valuation IPOs so difficult. The US public market might be losing its agility by effectively barring small-caps from having a fighting chance. As you mentioned, plenty of great companies IPO'd below the $1B range. """ Here's the 3 U.S. Securities and Exchange Commission mandates with roughly # of employees devoted to each. 1. Investor protection -- Think securities police -- 2,500 2. Maintaining efficient markets -- think regulators -- 2,500 3. Capital formation -- think helping businesses raise capital -- 2 Why? The SEC has an impossible task of policing a $100 Trillion stock and bond market with 2,500 cops. So, they focus on the big banner cases that are most likely to get the rest of the market to pay attention and change behavior. Congress isn't going to ask the SEC commissioners to testify as to why small businesses struggle to IPO. But they do ask them to testify when stock markets collapse or we have derivatives crisis like 2008-09. And, so they work very hard to make sure investors don't get screwed, and that we have efficient public markets. But as a result, compliance to be a public company costs between $2-5 million a year. This is why there's half as many public companies as there were 20 years ago. Crowd-funding is a thing, but only a couple hundred companies take advantage of that every year, because if a crowd-funding investor buys stock in a small business, where can they resell the stock and take a profit? There's no stock exchange available to do that. So, small business capital formation is left to the venture capital community. VC's funds are structured so they and their investors can only make money on their fund when they invest in future unicorns.

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Funds are getting funded! Dry powder is growing...when do we expect VC investment to pick up?! 👀 Last week alone saw significant activity in announcements: SVC invested $30M into General Atlantic’s PE fund, Golden Gate Ventures launched a $100M MENA-focused fund, Investcorp closed a $570M fund, and Wadi Jeddah introduced a new VC fund. Just a few examples from the numerous announcements flooding in. This surge in fund announcements prompted us to look back at last year's data. Thanks to MAGNiTT’s directory, we identified a 74% year-on-year increase in MEA-based funds being funded in 2024! (as of 20th May 2024) Yup, 74%! Since Q4'23, we've observed a growing trend of regional funds raising financing along with international investors establishing regional funds. Though the trend indicates that we’re bound to see more such funds later in the year, it’ll be interesting to observe when and how they get deployed.  At MAGNiTT, we predicted that this won't translate into investments until Q4, after the historical summer lull. But I am curious to know your thoughts on this? Get insights on investment and LP activity in emerging markets through a subscription: https://lnkd.in/dJrCd3fm #InvestmentFunds #VentureCapital #PrivateEquity #MENAInvestments #EmergingMarkets #InvestorTrends

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Founders and investors: This is the easiest way to pay less taxes 🤠 Put your shares / carried interest into a 𝐍𝐞𝐯𝐚𝐝𝐚 𝐧𝐨𝐧-𝐠𝐫𝐚𝐧𝐭𝐨𝐫 𝐃𝐲𝐧𝐚𝐬𝐭𝐲 𝐭𝐫𝐮𝐬𝐭. *you don’t need to live in Nevada to do this. You just need a Nevada trustee. With this setup you can eliminate millions in potential taxes: ➡️ ZERO estate tax for up to 365 years (40%) ➡️ ZERO state taxes ➡️ ZERO federal taxes (when qsbs is applicable) Plus you get bulletproof asset protection (Nevada is ranked #1 for asset protection). If you are interested, shoot me a message. or check us out at Dynasty!

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Takedown of 21st Century Portfolio Management with John Sharp Founding Partner of Hatcher+ 1. The Investor Reporting Mess: Here’s the deal – investor reporting is a dumpster fire. Founders are filling out reports no one reads, investors can’t find the data, and it's all inefficient. Hatcher saw this chaos and built a solution to make sure reports actually get read, processed, and used. 2. A System with Teeth: Hatcher’s responsiveness score keeps everyone on their toes. If founders miss reporting deadlines, they get docked points. It's about creating a real accountability loop that actually adds value instead of pointless paperwork. 3. The Hatcher Score: Hatcher created a scoring system for startups, grading them on essentials like team quality, traction, and mission. A Hatcher score of 700+ is a good bet – it tends to mean higher valuations down the road. Founders can finally defend their valuation with data, not dreams. 4. Cap Tables Matter: Messy cap tables are a turnoff. Investors don’t want to wade through a soup of names to find out who they’re in bed with. Hatcher’s platform helps keep cap tables neat, which makes founders look professional and makes deals a lot smoother. 5. ESG Metrics – Not Just Lip Service: The platform pulls carbon footprint and SDG data straight from portfolio companies. And for GPs in Europe, who are soon legally required to report ESG metrics, this is essential. It's about aligning with investors who actually want to make a positive impact. 6. Global Portfolio Wisdom: Hatcher’s AI backs a big idea: diverse, large-scale portfolios (100+ companies) deliver more consistent returns. Think less about hitting unicorns and more about assembling a deep roster. And if you want alpha, keep an eye on Africa – it’s looking like a solid up-and-comer. 7. Regional Playbooks: The US and China are still the big dogs in venture because of scale and market homogeneity. But non-US returns are creeping up, and emerging markets offer unique value. Just be ready to work harder for it. 8. The Power of AI for Valuations: Hatcher’s AI models can now predict valuation growth with actual math. This isn't the hand-waving you see at pitch competitions – they’re using a decade of data on our hundreds of thousands of startups to tell investors which startups are most likely to grow. Sharp’s bottom line? The game is changing – get better data, build better systems, and make smarter bets. TRIUM Global Executive MBA #digitaltransformation #indexVC #humancentric #performance #transparency #datadriven #alpha

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118 VCs (one hundred eighteen!) are gathering in San Diego next week - to meet with 30 SD startups. But it's so MUCH bigger than just those 30 co's. It brings VCs back - when they see quality companies. It helps those who are next-in-line and adjacent. It enables us to send deal flow all year 'round. It attracts talent and other companies. It inspires entrepreneurship. Connect is working for SD. Together, we're building the best damn innovation ecosystem on the planet. Year over year. Five.Ten.Thirty.

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A big part of making AI usable is enabling testing to provide the necessary assurance that outputs make sense. Distributional is leading this capability.

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