Jose Biton

Congratulations to Pedro Siciliano, Fábio Baldissera, and the entire team at Teachy for raising a $7m Series A from some of the best in the business. When we first met Pedro in early 2023, he was a first-year student at the Stanford University Graduate School of Business with a full course load and a crystal clear vision for the company he had started to build. After a few interactions, it was clear that Pedro was the epitome of a mission-driven founder. He had a strong sense of purpose, a deep commitment to the problem he wanted to solve, and extreme focus. Being authentically mission-driven gives you superpowers that are key to building a large business. Here are a few: 👉 *Authentic leadership*: Having high conviction in your mission allows you to lead from the gut with persuasion and strength. 👉 *Boundless energy & resilience*: Understanding why you are building your business gives you the energy and grit to fight through the hard times. 👉 *Culture building*: Culture flows from the top, and nothing beats caring deeply and setting high standards for the work you, your employees, and your company produce daily. 👉 *Customer centricity*: Being mission-driven, by definition, means putting your customers and users first, the key to every successful business. Pedro and Fabio have these superpowers, and I can't wait to see how they continue to put them to work on their mission to improve education around the world. 

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I recently had the pleasure of speaking with and learning from several software execs from our portfolio companies and industry experts during Thoma Bravo's AI Summit in Miami. It was great to share our insights into trends and practices we see in our portfolio and how we manage opportunities and risks. At TB, we have a long history of guiding enterprise software companies through digital transformation, and we’re already navigating the transition driven by generative AI. Our focus is on managing this new innovation by absorbing the technology to bring meaningful benefits to our portfolio companies and indirectly to their customers. And it’s evolving fast! We see our portfolio companies today using gen AI in generally three ways: first, to create new products and provide customers with incremental use cases. Second, to defend against cyber attacks that have become much more sophisticated by bad actors. And third, as an enabler of talent to make business operations run more efficient and productive. In our view, AI presents a significant growth opportunity, but we also believe that to really maximize that potential, companies should carefully evaluate the risks and be thoughtful about governance, trust, security and data privacy. AI is poised to accelerate innovation and it’s hard to predict the full, transformative potential of AI, but we are confident that some of the advantages of incumbent knowledge and data will be key to unlocking its value.

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The Information broke news that Insight Partners has just secured $10B in funding for their latest flagship fund. This is perfectly timed given their multiple $1B+ companies sold over the past week. This is a clear sight that #limitedpartners still have in their #privateallocations even during the current slow markets for #IPOs and #M&A. This would also appear to be good news for #AIfinancing and #SaaSFinancing. What do you think? #Management #VentureCapital #PrivateEquity #CapitalMarkets https://lnkd.in/gXu_s8Qj

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With the proliferation of the GP Stakes market and with the overabundance of fund level management fees flowing through PE management companies, most private equity GPs have been perversely incentivized to raise, and applauded when they do, as large of successive fund as the market will bear by prioritizing distributable cash to the Partnership and NFRE over fund performance (because GP Stakes deals are a multiple of NFRE excluding carried interest). Further, there is a simple math equation where if one raises a large enough successor fund one can underperform the prior fund and still make more carried interest⁉️ Over the last decade, most GPs have been accelerating fundraising and drastically increasing fund sizes. In order to rationalize and substantiate larger fund sizes and come back to market sooner, minimum EBITDA to pass at IC has gone up dramatically and the velocity of capital deployment has quickened at a myriad of GPs. As successive funds sizes increase 77%(what I see as the mean average for the LMM and MM across Fund II - Fund IV) like clockwork with some GPs even doubling or tripling fund sizes, including one Fund III at ~$400M and their Fund V at over $2B (representing a 500% increase), they are almost always not increasing firm resources / staffing up in lockstep because again, NFRE is paramount and so is deliberately paying higher purchase price multiples for larger companies in order to deploy the much larger fund as quickly as possible. Additionally, with NFRE in mind, GPs are strongly incentivized to introduce additional strategies - small market, growth, debt, etc., which are arguably distracting and detract from the primary responsibility of maximizing the “flagship” fund’s performance. When LPs “ok” or encourage a PE fund’s drastic fund size increase by re upping or committing as a new LP, GPs can significantly underperform in comparison to their prior fund and still make more money. For example, in the past 8-9+ years, with usually only ~2 years between funds, the majority of PE firms have increased their successor fund size by 60-80%+ and are producing lower returns. GPs can significantly underperform their prior fund, yet make more money… Example: Fund I - $400M $8M / yr Fund Level Fee 2.75X MOIC = $140M carry pool Fund II - $680M (70% increase) $13.6M / yr Fund Level Fee (70% increase) 2.25X MOIC = $170M carry pool = a 21.4% increase in the carry pool even with a 18% decrease in performance. Yet, the GP is more valuable. 👉 It’s finally time for the market to prioritize discipline. Discipline when it comes to purchase price multiples paid, leverage utilized, strategy drift, and fund size increases. #privateequity #business #management #growth #fundraising #partnership #innovation

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In the rapidly evolving landscape of private equity and consulting, one thing remains constant: the imperative for value creation. As a Managing Director at Catalyft LLC, I've witnessed firsthand the transformative power of effective value creation strategies. It's not just about improving operations or making strategic acquisitions; it's about reimagining what's possible for underperforming assets and unlocking their true potential. In my experience, the key to successful value creation lies in a combination of creativity and rigorous execution. It's about seeing beyond the numbers and understanding the human element that drives business success. Whether it's through leveraging AI to gain deeper insights or tapping into emerging markets, the opportunities for growth are endless. But it's not just about the bottom line. As someone who's created over $1 billion in value, I can attest that the real reward comes from the positive impact on the companies we work with, their employees, and the broader community. That's why I'm passionate about sharing my expertise in value creation, not just within the private equity space, but also in advising boards of directors and family offices. I'm always looking to connect with fellow professionals who share my commitment to driving growth and creating lasting value. If you're interested in discussing the future of value creation or exploring potential collaborations, I'd love to hear from you. Let's continue to push the boundaries of what's possible and create a brighter future for businesses and investors alike. Share your thoughts on value creation in the comments below, and if you found this post insightful, please feel free to repost. #ValueCreation #PrivateEquity #Consulting

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In a new op-ed I penned for Institutional Investor, I discuss the changing strategic buyer landscape for enterprise software companies. With software continuing to grow well in excess of GDP, and digital transformation at the top of C-suites’ agendas, the trend of multi-billion dollar software companies being acquired by non-traditional buyers should continue to accelerate. As always, all comments are welcome!

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In a new essay today, Omar El-Ayat and I shared the Euclid Ventures vSaaS Index to unpack why the public markets love vertical software. Check out the full analysis and join us at the Euclid Ventures Substack for more. "The Euclid Index we’re sharing today includes 36 leading industry-specific public software companies, alongside 60 horizontal SaaS players for comparison. We’ll update it from time to time and unpack a vertical SaaS insight top-of-mind to our investment team. Today, we will use the Index to answer a question at heart of the business model. Public Vertical SaaS companies trade at nearly double the EV / GP multiples of their horizontal peers—11x vs. 5x, on the median. Amongst profitable companies, vertical EBITDA multiples also lead by >30%. Why does the market pay more for a dollar of vertical software profit?"

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We are excited to announce the launch of Bluespine, our newest fintech venture creation company! Bluespine, today emerges from Stealth with their $7.2 million seed round led by Team8, with participation from other strategic partners. At Team8, we’re focused on tackling industry-wide challenges, and Bluespine’s mission is no exception. Targeting the broad U.S. healthcare industry, their AI-powered, evidence-based approach to medical overbilling is a game changer for self-insured employers who struggle with bloated healthcare costs. Their solution tailors claims reviews to each employer’s unique health plan design and coverage terms to discover, recover, and prevent unwarranted medical charges. Congratulations David Talinovsky (Co-Founder & CEO), Gal Frishman (Co-Founder & CTO), and Yossi Mansano (Co-Founder and VP R&D) on this achievement. We’re proud to be your backers! Read more about Bluespine, their early traction with large employers and Fortune 500 companies including Mattel and David Shield, and the funding round in CTech by Calcalist: https://lnkd.in/djXYNYFk 

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VC Market Update: Riding Out the Post-Boom Bumps. 2021's high-flying valuations and growth have given way to a more complex reality. With longer private timelines, tough exit markets, and capital tightness, startups face unique challenges—but also fresh opportunities. For those navigating today’s VC landscape, strategic planning is key. Whether it's balancing growth with capital efficiency or exploring secondaries smartly, there’s a path forward. And with boosts from AI and future rate cuts, brighter days could be ahead!

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After 3.5 days navigating the exhibition floors, dozens of happy hours, and fighting for meeting space at hotel lobbies, cafes, etc, I wanted to share some of my learnings from the 2024 RSA Conference. Complexity = Vulnerability: The industry is congealing around the notion that complexity is leading to vulnerability, meaning that the nature of managing dozens, if not hundreds, of solutions in a security tech stack is in itself making organizations vulnerable. The buzz continued about Palo Alto Networks' “platformization” as a response to this, and other major cyber vendors are following. Threats Growing, Budgets Tight: Despite the billions in venture capital dumped into cybersecurity, the threats and breaches continue to grow. The exponential increase in connected devices and cloud services are major components of the problem. In spite of this, there remains pressure to get a handle on corporate security spending. AI and more AI: AI — not surprising at all — was everywhere, at least in terms of marketing. The hype is still feels very much ahead of actual innovation, but areas showing the most promise are SOC manpower reduction and GenAI Pen testing. Deepfake Defense: Dedicate platforms are emerging for fighting deepfakes. The winner of the Innovation Sandbox, the competition for the most innovative early-stage startup, was Reality Defender, a deepfake detection platform. More solutions are emerging from automated detection to security awareness training. Big government presence: There was a strong emphasis on the geopolitical dimension of cyber - see, Blinken Keynote - and cyber as a national security issue. Funding slowdown alongside interest surge in AI: A sentiment of caution remains among investors. While optimism exists around new opportunities emerging in AI, investors are struggling to find differentiators, especially among the dozen or so AI SOC companies that have emerged in the past year or so. What’s more, security professional seem skeptical about adopting such tools, making investors nervous about investing at this stage in the AI hypecycle. But, early-stage AI security deals are happening and with large sized rounds and valuations. Early-stage vs Growth Investors: Early-stage investors seem to be more optimistic about investment opportunities, especially around AI security or security for AI companies. For growth-stage investors, new and attractive opportunities are still frustrating low and very competitive. The growth deals that are getting done are extremely competitive, often pre-empted, and valued-high. A lot of cyber unicorns in queue: Of the 77 security unicorns crowned since 2019, just 6 have exited above $1B via IPO or sale. Lastly, the top enterprise segments remain cloud security and identity, with growing interest in any tech related to AI (security for AI, data security, etc), but these segments are crowded and competitive. (For fun, I asked ChatGPT to create an image of the conference. Not bad...)

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🚀 Excited to share my latest blog post on how to turn startup challenges into triumphs! At WestWave Capital, we’ve seen firsthand how strategic interventions can help revitalized startups and set them on a path to success. Dive into our article to learn about the key strategies and insights that have helped us and our portfolio companies navigate and overcome obstacles. Read the full story here: https://lnkd.in/g4YsfXm6 #venturecapital #startup #startupfunding #investment #leadership #womenintech

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Unlock the potential of the Lower Middle Market! 📈 Discover how executives can tap into the LMM to drive value creation, increase cash flow, and secure lucrative roles in private equity. Our latest guide, "Unlocking Value in the Lower Middle Market: A Numbers-Based Playbook for Executives," offers actionable insights and strategies to excel in this dynamic space. Don’t miss the opportunity to monetize your expertise and create new streams of income! 💼 Discover more about Blackmore Partners: https://buff.ly/42iNmB3 📅 Have questions? Schedule a meeting with our Director Chris Melton: https://buff.ly/46DZD46 #PrivateEquity #ValueCreation #LowerMiddleMarket #ExecutiveRoles #BlackmorePartners

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The SomosVC 2023 Annual Report is out! Key findings of the report include: 👉 79% of venture funds over $100 in AUM have no Latino/a investment professionals at all. 👉 Latino/a's represent only 1.6% of all investment professionals at funds over $100M in AUM 💪 Latino/a led firms are more likely to invest in diverse founders - 48% of portfolio company founders identify as underrepresented people of color. 💪 Latino/a-led firms in the SomosVC community have played a pivotal role in job creation, with investments leading to an estimated 51,612 new jobs. Learn more about the report in this Axios piece! https://lnkd.in/e4d58sNd

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Join us tomorrow for a panel discussion on the complex relationship many FirstGens have to money and how that affects founders, investors, operators and others. See you tomorrow! https://lu.ma/9rixyzgs

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Divestment requirements have a very real cost. This reduces the ability of endowments and foundations to support their mission driven enterprises. As the list of divestment demands grow, at what point do the consequences outweigh the perceived benefits? Hiding at the end of this article is the below quote: Golden admitted the divestment had undermined Princo’s returns, saying the endowment “would have been better off” otherwise. But he pointed to a bigger concern: the pressure to “keep adding things to divest from”. “Fossil fuels are necessarily part of getting to where the overall economy needs to be [and] it would be impossible for the world to not use fossil fuels tomorrow,” he said. “Divestment is a pretty weak tool to change the economy.” https://lnkd.in/g3SeC8rg #energy #investing #vc

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Miami F1 did not disappoint, with all sorts of legendary entertainers, investors, and even scientists descending on Miami to see who could throw the best party of the week. I was fortunate to receive an invite to a party on the legendary 180-foot Gene Chaser, the support vessel for the floating laboratory, Gene Machine, which carries all the toys. The owner, best known for his contributions to next-generation DNA sequencing, was a fascinating person to meet and get to know. This yacht was the fastest in the marina, equipped with four Caterpillar engines reaching a top speed of 22 knots. It was also the most traveled last year, visiting places like Antarctica and Singapore. Fun Fact: This boat isn’t allowed in St. Barts because the intense heat from its exhaust could melt other yachts. My favorite part was trying out all the hardware, especially the first-ever portable brain MRI that will soon be going into space. This was probably my favorite event of the entire weekend. https://lnkd.in/eRF6Z7RN For specs on the boat, click on the link here: https://lnkd.in/eP7bnYtr #MiamiF1Experience #GeneChaserYacht  #NextGenSequencing #PrivateInvestmentLuxury #FamilyOfficeEvents #SuperyachtScience  #InnovativeInvestors  #LuxuryAtSea  #TechOnDeck #AdventureYachting

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Too many small and mid-sized businesses struggle with capital constraints out of fear and misunderstanding. Sourcing the capital required to remove those constraints is key to unlocking the value creation potential of these companies. https://lnkd.in/gRYTKEmN #smallbusiness #businesstransformation

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