John Gannon

This is quite interesting advice and also quite a non-consensus view in the B2B software world. Cross-border founders who are considering the US vs International incorporation question should consider this as valuable input.

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Are we building too much supply side infrastructure for AI? Will revenue ever catch up? I discussed these questions and more with Laura Chau, partner at Canaan, in episode 452 of The Full Ratchet. Tune in today to catch our full discussion. Link to the full episode is in the comment section below.

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Last week, I had the pleasure of moderating a discussion on navigating FOAK in climate tech at the Greentown Labs Summit in Boston (which had >600 people!!). Here’s a quick rundown of what was shared by Katherine St. James of Spring Lane Capital, Paris Smalls, PhD of Eden GeoPower, and Hannah Friedman of Planeteer Capital: 🌱 What is the definition of FOAK? We discussed how the term can be controversial - it's almost too general because it doesn't identify what kind of "First" FOAK refers to - first team project? First geography? First of a technology in a sector? First time for the integration of a system? It's also too specific because it has the word "first" in it, which can be anathema to later stage / project finance investors. 💰 Partnerships for Funding FOAK Projects We discussed how important it is to build a blended capital stack & use off-balance sheet capital for a project so you're not using the most expensive equity dollars to fund an infrastructure project with low-ish IRR. We also talked through being creative about using corporate partners to provide in-kind services or ink some agreement (at least an LOI) to attract this funding. 🏛 Role of Government We talked about how government capital is seen by investors & how it can be catalytic for FOAK. Government capital can provide validation that a startup has passed a rigorous diligence process by a third party - and incentives like grants or credits can help improve returns for the first project- but it's important to be doing this in conjunction with getting customer validation and to be able to present line of sight to competitive economics without concessionary capital. 👥 Advice for FOAK startups The panelists offered some very specific pieces of advice for startups going through FOAK: how to get creative with things like revenue sharing agreements or convertible notes, getting smart with project development early on (like with DeveloperU), being careful about using FOAK too liberally with certain investor groups, getting the right commercialization / FOAK talent in and around you early Huge thanks to the panelists and the team at Greentown Labs (Jill Kirkpatrick, Julia Travaglini, Aisling Carlson, etc you rocked it!!) for hosting this discussion on bridging the FOAK gap. Also immensely enjoyed the rest of the agenda. Check out the full recap & videos here: https://lnkd.in/d9ApYe9Y #ClimateTech #FOAK #ClimateFinance #ProjectDevelopment #GreenTech #CleanEnergy

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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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👀 Looking at our recent investments at Draper Associates, here’s what standout founders nailed, making our decision to invest much easier (and faster): 💥 Visionary Tech with a Bold Vision – These founders are not here for incremental wins; they’re reimagining what’s possible in across tech - biotech, robotics, aerospace, and beyond. Their vision is big and audacious, tackling complex problems that demand breakthrough solutions, others have not been willing to try. 👊 Clear Passion & Purpose – The drive in these founders is undeniable. They’re committed to their mission with a depth of purpose that shapes every choice. One founder, for example, took two years completely off to learn and meet everyone in longevity biotech. This level of grit and dedication is rare but essential for the most impactful founders. 🌟 Assembling All-Star Teams – They bring together top-tier talent from diverse disciplines: experienced business leaders with successful exits or industry experience at top companies, technical co-founders with deep expertise, often PhDs or industry pioneers, and even published authors. It’s a complementary team, unified by a shared vision. They make the: "Why this team?" obvious - at a glance. 💻 Data-Driven to the Core – These founders present data insights that show why their approach is unique, especially against a competitive field of companies. This data is delivered with clarity and they make the complex simple. Many are published in top journals, adding depth and credibility to their approach, and reinforcing that they know their tech inside out. ⚡️ Memorable, Clear Vision – They don’t just pitch; they make the future feel tangible, with a vision that’s both compelling and concise. If I can relay their pitch in under 30 seconds to my team, they’ve killed it. 📣 Transparent & Proactive Communication – The best founders don’t wait for questions. They come prepared, often with a comprehensive FAQ doc, give timely updates to our questions, and are candid about challenges. This level of openness builds trust and strengthens our partnership. 💸 Milestone-Driven Funding Strategy – Each funding stage aligns clearly with already achieved or upcoming achievable milestones. They’ve mapped out a roadmap that minimizes risk at every step, giving us confidence in their journey. 💰 Revenue Milestones Along the Way – Even if it'll take a decade to hit revenue on their big vision, these founders find revenue generation stops along the way to profitability. They share a trajectory that connects early wins to revenue, showing how every step is a building block toward their bigger vision. Overall, the best founders are incredibly thoughtful, prepared, and fantastic verbal / written communicators. #founders #startups #fundraising #VC

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Founderville believes one of the most significant opportunities is emerging in legacy system applications. We look for manual tasks to leverage AI for efficient automation. Rather than chasing massive TAM, which will be addressed by larger VCs, we focus on smaller market domains that won't be chased as hard. Think of "boring" processes that require human intervention or manualized tasks. Those are opportunities. Keep your eyes open if you have deep domain expertise in a non-automated and fragmented industry. #entrepreneurs #venturecapital #startups #saas

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Here are the Top 10 SaaS funding rounds of the past week (Seed to A) Starting at number 1... 🥇 Emergence, $97.2mm Seed 🤯 Emergence is developing an AI "agent-based" system that automates tasks typically performed by knowledge workers. Founded by Satya Nitta. 💸 Investors: Learn 🔗 https://bit.ly/3XSitTA 🟠🟠🟠 🥈 Formic, $27.4mm Series A Formic enables manufacturers to scale faster by making it easy to deploy robotic automations, like packing and palletizing. Founded by Misa Ilkhechi and Saman Farid. 💸 Investors: Blackhorn Ventures, FJ Labs, and more 🔗 https://bit.ly/3XGzEYr 🟠🟠🟠 🥉 normai, $27mm Series A Norm Ai is automating compliance processes, making them more efficient, cost-effective, and accurate via (you guessed it) AI. Founded by John Nay. 💸 Investors: Coatue, Bain Capital Ventures, and more 🔗 https://bit.ly/4ckpNft 🟠🟠🟠 🎖️ 4. ORA, $20mm Series A Ora is a blockchain project incorporating AI into dapps. Founded by Kartin Wong. 💸 Investors: Polychain Labs, HF0, and more 🔗 https://bit.ly/3zpW7Ph 🟠🟠🟠 🎖️ 5. Payabli, $20mm Series A Payabli builds the infrastructure that allows companies, specifically software companies, to embed and facilitate payments through APIs. Founded by Joseph Elias Phillips and William Corbera. 💸 Investors: QED Investors, Bling Capital, and more 🔗 https://bit.ly/4bwkGHE 🟠🟠🟠 🎖️ 6. Sift, $17.5mm Series A Sift develops tools to accelerate the development and ensure the reliability of complex machines (think Spacecrafts). Founded by Austin Spiegel and Karthik Gollapudi. 💸 Investors: GV (Google Ventures) 🔗 https://bit.ly/3L7zlyk 🟠🟠🟠 🎖️ 7. Ario, $16mm Seed Ario is an AI-powered assistant for parents that helps with daily tasks, from meal planning to scheduling playdates. Founded by Sumit Agarwal. 💸 Investors: Wing Venture Capital, Floodgate, and more 🔗 https://bit.ly/4eEjeG9 🟠🟠🟠 🎖️ 8. MagicSchool AI, $15mm Series A MagicSchool provides lesson-planning solutions for teachers to fight burnout. Founded by Adeel Khan. 💸 Investors: Bain Capital Ventures, Adobe Ventures and more 🔗 https://bit.ly/3RQt5Pn 🟠🟠🟠 🎖️ 9. AuthZed, $12mm Series A Authzed makes it easier for developers to build permissions in their applications. Founded by Jacob Moshenko and Jimmy Zelinskie. 💸 Investors: General Catalyst, Work-Bench, and more 🔗 https://bit.ly/4bqkh9B 🟠🟠🟠 🎖️ 10. SLUSHY.com, $10.2mm Seed SLUSHY is a creator monetization platform. Founded by David Gross and Fred Sprivock. 💸 Investors: Mantis Venture Capital, Jon Oringer, and more 🔗 https://bit.ly/4eN9Boi ⚫⚫⚫ I'm Gyan, Head of Community at Venture House. I create tools, guides, and other free resources for Junior VCs and founders. If you found this helpful, check out the Venture House website for more 👇 https://venturehouse.xyz/ #startups #venturecapital #funding #saas

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What I appreciate most about how we designed the SMArtX Advisory Solutions platform is that we provide software to Turnkey Asset Management Programs as a FinTech, but we prove out every piece of our technology platform by using it to run a TAMP and servicing advisors ourselves. In tech this is called "Eating your own dogfood" or simply "dogfooding". Wikipedia says: "Eating your own dog food or "dogfooding" is the practice of using one's own products or services. Hence dogfooding can act as quality control, and eventually a kind of testimonial advertising. Once in the market, dogfooding can demonstrate developers' confidence in their own products." No matter how you cut it, whether we are servicing them directly or through our enterprise clients; the end consumer is the advisor. And servicing them through an "out-of-the-box" TAMP gives us the unique opportunity to hear the clients needs directly and hone our product and make it a better experience for everyone using it. So let's be both a TAMP and a FinTech while we sing along with Dierks Bentley and agree that SMArtX is "little bit of holy water, but still a little bit burning man"

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The story of Eon starts years before our investment. We identified Ofir Ehrlich as a special operator, and he helped us across multiple deal processes; in the meantime becoming a great and loyal friend to Vine and to me personally. Fast forward to the end of 2023, Israel has just been caught blindsided by a devastating Hamas attack on October 7th, the country was in disarray, but that didn’t stop Ofir from bringing the gang back together to ideate on their next big idea. And, surprise, it wasn't in AI. On November 29th, as we sensed this would become one of the most competitive deal processes in Israel, we were fortunate to have the opportunity to introduce Shaun Maguire to Ofir over lunch in our office via Dean Meyer. Shaun was in Israel on a righteous mission to show Elon Musk the atrocities of October 7th and resilience of the Jewish nation. We as a firm know when we can go alone, and when we need / want to partner with the multi-stage firms, in this case Sequoia. Ofir would easily raise a large seed, and it would be an obvious seed investment for most firms out there, given the incredible founder-market fit of Ofir plus his stud co-founders, Ron Kimchi and Gonen Stein. Once the market caught wind of the fact that this prospective founder was quickly moving from “ideating” to potentially being pre-empted, the conversation in a week shifted from “get to know you” to Sequoia Capital / Vine Ventures, L.P. need to earn the right to partner with these founders, together. We quickly went into diligence mode, speaking with experts in the backup space, incumbents, and potential customers. Within a week, the insights that Ofir had described to us were validated, and it became clear that this was an n of 1 team to go and build a solution in this category, which could become among the largest in enterprise software. We are extraordinarily grateful that Ofir chose to work with us and that Sequoia remained loyal to Vine as we navigated the deal process together. Since then, Ofir, Gonen, and Ron have built one of the highest caliber teams we have ever seen, and have worked with some of the largest corporations in the world, allowing them to have a holistic view of their cloud assets and ensuring that they are available, even in the case of a ransomware attack or human error. Following this progress, in just 8 months the company has rapidly completed both their Series A (Tal Morgenstern, Lightspeed + Omri Casspi) and Series B financing led by the wonderful folks at Greenoaks. With that, we are grateful and excited to be a part of the Eon journey, and look forward to working closely with the team as they build the next great enterprise software company out of this small but mighty country. Am Yisrael Chai. Let's go Eon! Daniel Povitsky Demren Sinik Barak Kaufman Alex Moskowitz Racheli Adler John McIlree https://lnkd.in/e8fvVCji

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I had an absolute blast with Michel Gagnon and the Stun and Awe crew - THANKS again for having me... Sneak peek of the substance below: > Micro SaaS companies can be just as safe and stable as larger businesses, offering lower valuations and less competition from institutional players. > Founder-product fit is crucial, as founders solving their own problems often create useful products with great retention. > Founder burnout can be a buying signal, indicating a solid business with a founder ready to move on. > The first 90 days post-acquisition should focus on visibility, documentation, transition, and validating diligence assumptions before pursuing growth. > Building transparently and maintaining open communication with users post-acquisition helps preserve the human element and avoid the pitfall of going silent. > Simplicity equals mastery - if it takes a complex explanation to justify an acquisition, you probably don't fully understand the business. > Establishing reasonable incremental growth goals based on baseline performance (systems over goals) is more effective than setting arbitrary targets. > Fostering a culture of care and respect enables honest feedback and allows teams to move faster through a shared commitment to truth-seeking.

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Big announcement below! 👇 Let's talk about the current state of GP-LP affairs: 🤯Emerging VC managers have absolutely exploded over the past 5 years. 📈 At the same time, more and more data has surfaced that shows that emerging VC firms tend to outperform larger, established firms. 🤔 All of this has made it intriguing but tough for LPs to know where to direct their attention. 🛍 GPs frequently meet LPs at conferences who are window shopping but not committed to the asset class or emerging managers. 🧾 And both crews get overwhelmed by transactional convos. So Sydney Paige Thomas and I created Abundance. Abundance is a private, nomination-based retreat for active LPs and top emerging GPs to form new experiences together and build lasting relationships. Why Abundance? Abundance is knowing that there is more than enough for more than one to succeed. And a single win within a community is a win for the community itself. The journey of an emerging VC manager from 1st close to final close or Fund 1 to Fund 2 is (1) communal and (2) requires an abundant mindset. LPs look for structure and confidence to feel comfortable investing in early VC firms. Yet many of the feeds we scroll and conferences we attend reinforce inherent power dynamics and transactional thinking, which allows scarcity mindset to creep in for emerging GPs. Some of the best events I’ve attended have been intentionally non-transactional, e.g. Camp Hustle, Recast Summit, and other GPs’ AGMs. The fundraising success stories we see usually involve a community (usually of other GPs & LPs) coming together to support and open doors for the emerging GP. We designed Abundance to be an immersive gathering that fosters these connections. Starting tonight, ~100 GPs and LPs are descending upon Seattle for the inaugural Abundance retreat. This has been under wraps for months and I can’t wait to see it come to life! Thanks in advance to our awesome sponsors who were the earliest believers in this vision: Sydecar, Amazon Web Services (AWS), Gunderson Dettmer, & Zelda Ventures. And shoutout to my dad Ed Illig for logo design & Halle Kaplan-Allen being the first sponsor to say yes 🤩 Presented by The Council Capital & Symphonic Capital.

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A PATH FOR SMALLER IPOs From Carl Chiou (quoted verbatim), an example of a smaller IPO and what it takes. Thanks Carl! ---- I’ve been busy working on a complex transaction we announced yesterday morning. Powerfleet (AIOT), a ~$500mm market cap vertical software company announced a $200mm acquisition of a privately owned competitor concurrently with a $70mm equity issuance via a PIPE as part of a larger financing package. Why is this relevant to you? Because it demonstrates the art of the possible for smaller companies that aspire to become public companies. First, investor demand absolutely exists for smaller market cap issuers as the company raised nearly 20% of its market cap to finance a transformative acquisition. While it may feel like the path to IPO for private companies requires $500mm+ of revenue, that’s simply not the reality. But… Second, success doesn’t happen overnight as many investors had already met with the company multiple times at conferences and their familiarity with the business and management team allowed them to move quickly. For private companies, that means being active and targeted in investor outreach in the 12-18 months leading up to an IPO. Third, giving up some of the pie to grow the pie can be a win-win for everyone. The equity offering priced at $3.50 versus a prior day close of $4.66, but two days post-announcement, shares are trading comfortable above $5. As much as I’ve written about optimizing IPO pricing, I’m also realistic that for smaller cap issuers, investors are going to underwrite more conservative valuations to accept the risk of less liquid, potentially higher volatility stocks. Fourth, the consolidation thesis resonates with investors as it simplifies the competitive landscape, adds revenue scale and drives improved operational and financial efficiency that improves the bottom line. I continue to believe that as much as the large strategics and private equity will play a role in clearing out the private tech pipeline, small – midsize companies will also be key participants going forward. End of day, Databricks, Stripe and other large scale, high-fliers are going to garner instant investor attention and a high multiple out of the gate when they eventually go public. But for everyone else, it’s important to know that with the right expectations, there is a clear path to an IPO. 1:10 PM · Sep 19, 

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If you are curious about learning more about startup investing, check out this online event on May 13th. #WomenInBusiness #InvestmentStrategies #FinancialFreedom #HowWomenInvest #VentureCapital #FinancialEmpowerment #InvestInYourself

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💡Benchmarks in the investment industry serve as a standard for measuring the performance of securities, mutual funds, or investment managers. They provide a reference point for analyzing allocation, risk, and return of a portfolio, enabling investors to make informed decisions. Thanks Peter Walker for keeping us all informed!! Can’t wait for this!! Follow and get on the waitlist for this one! #benchmarks #fundraising #Capitalraise #founders #womenshealth #femhealth #medtech #wellness

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I wrote a thing on benchmarking, which has my industry mesmerized. The desire for benchmarking is often misguided. I had to address it head on. Or as I say in the article: "If you're just taking the test to make the grade, what have you truly proven? The real benchmark should be your own performance over time. If you're consistently improving, learning from your experiences, and delivering strong results for your LPs, the only benchmark you need is yourself." Give it a read and let me know what you think.

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Today, GTMfund’s is excited to announce to launch of Operator, its first incubated company. Max Altschuler (founder of GTMfund) teamed up with co-founder Adam M. (design engineer and 0-1 builder) and co-founder Mark Kosoglow (Outreach employee #1 and former SVP of Global Sales) to create Operator.ai alongside an insanely talented team Pleasant Middelhof, Jeremy Jonas, Carl Gunderson. We've entered a period called “The Great Ignore”. Spam and irrelevant, poorly-automated outbound campaigns are running rampant.   Operator gives you an easy-to-use Growth Engineer that allows you to build and enrich lists with accurate data, and run experiments and queries using AI to generate highly targeted outreach.    Check out their website to get updates, early access, and see how they are taking the world back to 2 touches meant to attract buyers into conversations that convert, instead of 20 touches meant to make sure you hit your activity number: https://www.operator.ai/

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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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We’re excited to partner with Tidemark on the first-of-its kind Vertical & SMB SaaS Benchmark Report! Congrats to Michael Tan, David Yuan, Andrew Walsh and Courtney Mullin for putting this together. If you are a Vertical SaaS CEO or executive looking for benchmarking data to help make product/strategy decisions, then this report is a must read for you. Just leave a comment "Vertical SaaS" in this post, and I'll share the link to the full report in your DM.

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