Kevin Callahan

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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20 hours in and Hoyo's formidable craftsmanship is on full display with ZZZ. ⭐1.0 release pool of 16 characters. Hoyo games have always prioritized quality over quantity, leaning instead on deep systems to enable diverse team comps / fun theorycrafting. Interestingly, Wuthering Waves also launched with the same # of characters in its 1.0 pool. I'm personally a big fan of this approach, and hope to see more games adopt it going forward. ⭐Female to male character ratio of 3:1. HSR currently stands at ~2:1 and Genshin at ~1.7:1. Every faction shown so far has only 1 male char. Surprising given Hoyo's recent titles have focused more on the "mainstream anime" audience instead of catering only to the core otaku audience. Very happy to see Hoyo honoring its roots here. They cooked and core fans are going to be very pleased with all of the fanservice (e.g. cinema artwork, main menu char selection, etc.). ⭐C6 / Cinema artwork is... IYKYK. They clearly tested it with HSR and are fully leaning into it with ZZZ. Congrats to all you Grace C6 havers. They knew exactly what they were doing. ⭐First Hoyo game with dedicated furries / anthropomorphic races. Ellen, Ben, and Von Lycaon are all very compelling characters. Wakayama Shion does such a fantastic job as Ellen's VA. Hoyo absolutely nailed the launch banner here. ⭐Just like other Hoyo games, ZZZ is more "casual" than it is "core." It doesn't demand much of your time as a single player live service title. For me it's the perfect side game that I can see myself spending 1-2 hours per week on. I don't expect everyone to like it (might be too "easy" for core gamers), but it's a winning formula that Hoyo has perfected for its target audience. ⭐One of Hoyo's underrated special talents is making "core" genres widely accessible from a gameplay standpoint across all platforms. ZZZ plays flawlessly on mobile, PC, and console without diluting the experience at all. Everything from the simplified switching system to the flat level design was intentional to make it incredibly accessible even for someone who has never played action games before. This is something really only Hoyo is capable of pulling off with such finesse. ⭐Really digging the comic / manga style storytelling. Glad to see Hoyo continue to innovate on how it delivers its stories and really looking forward to seeing more of this. ⭐Hoyo's investments into its music / animation departments are really paying off. The release trailer for ZZZ is Hoyo's best yet and their character drip marketing is perfected to the point where I'm basically forced to pull on every banner. In many ways, Hoyo is slowly becoming the Apple of the gaming industry, and their IPs are rapidly expanding the audience for gacha and anime on a global scale. I'm honestly humbled. Shut up and take my money... #zenlesszonezero

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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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An interesting article below, that demonstrates out how San Diego is punching above its weight.  And how Connect's strategy and execution over time, contintues to be central to that success. The article describes the current state of the market in Seattle.  (And i love Seattle.) It's a market that we tend to track with relative to venture fundings.  They used to kick our butts, we outraised them each of the last three years.  This despite the fact they have 3x as many funds there, and 9x the amount of resident capital there. (per pitchbook) Some key takeaways:  * They continue to compare themselves to SIlicon Valley. Instead, we leverage our proximity. *They whine there's not enough local investors (see note above - they have more than us). We bring over 200 VCs to SD annually! * They say founders are not connected with one another. We bring CEOs together regularly, in a variety of ways - private dinners and through our Springboard program. * They say they need to elevate their image on a national & international stage. Why we created and continue to build Five.Ten.Thirty (aka Inno Day).  * And the last paragraph - they need to concentrate on making their region a great place to live. Our mantra: "It's about Better, not Bigger." (See XEO, TL Fund). THANK YOU FOR ALL OF YOUR SUPPORT. WE ARE ON A MISSION TOGETHER!!!  (Comments, whining, suggestions on SD always welcome.) https://lnkd.in/g6Rq_f2Y

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Great learnings from our friends at GV (Google Ventures). Since 2010, their research and design team has helped over 300 incredible startups wrestle with critical questions about their products and customers. They partnered with these companies when they are building something new, expanding into new markets, and troubleshooting sales or other metrics. Check-out the new book, "Learn More Faster: How to Find Your Bullseye Customer and Their Perfect Product" and open-source our formula to accelerate learning and customer discovery. https://lnkd.in/ecP6QUTz

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Greed and Fear, AI (adoption) style. In investments we're used to talking about greed vs fear, now we're seeing this same pendulum applies when it comes to consumer sentiment towards AI adoption. Concern is fear, that's obvious, and if you think about it a bit excitement comes from a form of greed in this case: the excitement for AI is because people hope it will help them do more with less time and effort invested - a greed for precious resources (which can be translated to money as well). Consumers need to invest some time, effort, as well as money in order to come up the AI learning curve (learning the right tools and how to prompt them). Playing around with AI is one thing, seriously using it professionally or personally is a bigger step that will be affected by the greed vs fear. It's too bad Pew Research Center didn't separate out professionals' opinions in a professional capacity (link to findings in the first comment), but still they find that for the first time the majority of Americans are concerned. The increase in concern (fear) happens just as research is starting to demonstrate that AI is making people more productive, which should have fueled excitement (greed). According to Ipsos, two thirds of people think AI will profoundly change their daily life in 3-5 years. Almost half say it already has (link in second comment). Interesting... And now this entire post rewritten by LI's AI: Greed and fear are familiar concepts in the world of investments, but did you know that they also apply to AI adoption? Consumer sentiment towards AI is swinging back and forth between concern and excitement. Concern is fear, and excitement is a form of greed. People hope that AI will help them do more with less time and effort invested, a greed for precious resources. However, investing in AI requires time, effort, and money to learn the right tools and how to use them. Playing around with AI is one thing, but seriously using it professionally or personally is a bigger step that will be affected by the greed vs fear pendulum. According to Pew Research Center, for the first time, the majority of Americans are concerned about AI. This increase in concern happens just as research is starting to demonstrate that AI is making people more productive, which should have fueled excitement. Ipsos reports that two-thirds of people think AI will profoundly change their daily life in 3-5 years, and almost half say it already has. What are your thoughts on the fear vs greed of AI adoption? Share your opinions in the comments. #AI #fear_greed #investment #genAI

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Great time on the Embracing Erosion podcast w/Devon O'Rourke! We talked about: 🚀 How to scale a company from concept to 9-figure exit 🔄 How to break away from the traditional consulting model and apply product approaches ⏩ Why it’s important to iterate quickly and often with messaging 💸📈What signals are important to pay attention to when investing in startups and much more!

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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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Proud to have supported Wander in securing their recent $1M extension seed round! 🚀 This achievement underscores a crucial lesson in startup growth: success in follow-on funding rounds demands strategic thinking and unwavering dedication to hitting key milestones. Wander's team, led by the visionary AJ Brau, has exemplified this perfectly. Their journey from concept to a global, AI-enhanced interactive mapping platform is a testament to the power of customer-centric innovation and persistent execution. It's been a privilege to guide them through our Value Creation program, helping translate potential into a robust, actionable strategy. To aspiring entrepreneurs: remember, each funding round presents unique challenges. While initial rounds often focus on your idea, vision, and promises, follow-on rounds require solid achievements and compelling arguments supporting your actual execution. Key points to consider: 1. Expect your initial plan to evolve; investors understand that perfect 1:1 execution is rare. 2. Be prepared to showcase your decision-making process and how you've adapted to challenges. 3. Governance and operational mechanics will be scrutinized more closely in later rounds. 4. Focus on creating tangible value, hitting your targets, and effectively communicating your progress and learnings. Remember, each round is an opportunity to prove your ability to execute and adapt. The capital will follow well-executed strategies and demonstrated results. Congratulations to AJ and the entire Wander team! Your hard work is paying off, and I'm excited to see where this new funding takes you. Read more about Wander's journey and innovative approach here: https://lnkd.in/dE-9n8_2 #StartupSuccess #VentureCapital #TravelTech #Innovation #ValueCreation #Utah #Advisor

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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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Interesting concept to rename rounds by milestones. But "Series Client Expansion Extension" just doesn't have the same ring to it 😋 . Maybe we can start incorporating it into a descriptor to add context, "Series Seed Extension: client expansion." #startups #venturecapital

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Wonder will happen to human creativity & media industries with the rise of web3 & AI? 👇🏼 Tonight at 530p we have another Emerging LA happy hour in Santa Monica. There are 99 guests are signed up, and only 11 slots left! SIGN UP HERE: https://lnkd.in/gcR8dKHY This happy hour will be part of our 'Future Frontiers' series, with a panel discussion on the latest developments in emerging technologies and how it will impact the creative industries. These trends matter as it relates to content generation, creators, IP, royalties & rights, and ownership. Emerging tech such as crypto & generative AI is already bringing disruptive innovation to media, and that is why everyone in Hollywood is keeping a close eye on it! The speakers for our panel discussion are leaders at top firms, funds & startups in this field and come from Xsolla , Hashed , Spaceport.xyz , and Republic Crypto. Come listen to them speak and bring your questions for our AMA with the audience! Thanks in advance to our panelists:​​​ • Michael Dershewitz ​(COO/Head of Corp Dev at Xsolla) • Jun Park (Sr. Investor at Hashed) • Le Zhang (Founder/CEO at Spaceport) • Maria Chak (Head of BD at Republic Crypto) These are areas that we pay close attention to at Sunset Ventures, and it can be tough to keep up with the latest developments. So I am excited to learn from this group discussion! A big shout-out to my co-host for the evening Timothy K. as we represent Wharton Digital Assets Club in SoCal and the support from the Lightspeed Faction VC + Orange DAO + AI LA teams!! 🙏🏼 The mission of these events always remains the same, we want you to 1. Deepen connections with good people in LA tech community 2. Learn actionable insights as a builder or investor 3. Leave more inspired than you arrived as you continue your journey -- Hurry and sign up now if you would like to come. If you know someone in your network would find this community & discussion useful... Then please repost & tag! ♻️

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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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One of AI's most exciting use cases is empowering creative humans to execute their vision, faster. Cartwheel is making that happen with their powerful natural language-to-animation platform. AI only works and becomes ubiquitous if the interfaces are useful and easy to use. Read more below and check out the beta — especially if you know anything about animation and understand how much time this could save and creativity it will unlock. Well done Jonathan Jarvis, Andrew Carr 🤸 and team. https://lnkd.in/epX-GdAB

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I enjoyed going on Nick Telson-Sillett’s podcast, Pitch Deck by Forward Pursuit. Nick is a serial founder and investor (founded and exited DesignMyNight) so knows both sides of the table which always makes for an enriching chat. Some things we discussed: - The perceived power dynamic between VCs and founders can hinder productive conversations. - A compelling product demo can significantly influence investor interest. - Founders must focus on solving real customer problems to succeed. - Hiring standards are crucial for building a successful startup team. - Behavioural roadblocks can prevent the adoption of new solutions. - Validation from potential customers is key for pre-revenue startups. - The early-stage funding landscape has become more efficient and selective. - Pace of execution is a critical factor in attracting investment.

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I'm officially launching my new business today: Early Stage Labs. We help Seed and Series A startups level up with fractional execs in finance + growth. If you need the horsepower and execution of an experienced operator but don't want to add heavy FTE burn to your runway, I'd love to see if we can support you. We have been quietly building in 2024 and are up to 11 CFOs and 5 growth folks on the team. We can't wait to roll up our sleeves and get into it. Learn more about what we're doing here: https://lnkd.in/eddDSWCn -- I was out on a walk with my wife back in 2018. I had been running a bootstrapped startup for a few years and was talking to her about a pivot we were making. She asked me what it was that I loved about the business I was building. Simple question, but I paused and had to spend a few days thinking about it. I remember coming back to her and telling her how much I love the art and the act of creating something from nothing. How it’s difficult and nuanced and sometimes even feels impossible. But how - when you get it right - man, it can feel like magic. I’ve built and sold a few businesses since then. We sold our last one to Healthline in 2021. I then jumped to the other side of the table and I’ve been the General Partner of a seed-stage venture fund since 2022. I love deals. I love getting into the hard and dirty parts of a business that can really move the needle. And I love delighting customers. I’m a scrappy, gritty founder who loves finding high impact + low burn ways to move businesses forward, and I think I’ve found that here. I think we’re really doing that for our customers. Early Stage Labs is a love letter, of sorts, to this beautiful, treacherous, wondrous world of startups that I’ve - for some strange f’ing reason - made my home over the last two decades. Here’s to the ride.

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Can poop save the planet? 🤔 Well, in Silicon Valley, it's not just a punchline—it's a multimillion-dollar climate solution. Big players are teaming up with startup Vaulted Deep, paying $58.3 million, to pump organic waste underground. The deal was brokered by Frontier Climate, a coalition launched in 2022 by Stripe, Alphabet, Meta, Shopify, and McKinsey Sustainability. But why are tech giants getting their hands dirty with sewage and manure? Vaulted Deep's technology, rooted in decades-old methods used for oil and gas fracking cleanup, gives them an edge. But instead of sludge, they're tackling carbon-rich waste, aiming to sequester CO2 underground. They plan to sequester 152,480 tons of carbon dioxide by 2027 as part of the deal (That equates to 36,000 gas cars off the road for a year). Is this greenwashing, or a silver bullet? Critics warn of cost, the need for rigorous carbon accounting, and potential environmental trade-offs - i.e. emission prevention versus carbon removal. #decarbonization

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Ross Haleliuk posted the fantastic article below. This is the world where I live day-to-day. At TechOperators, we invest mostly in early-stage cyber, but we do things a little differently, and we believe there are ways to invest successfully outside of pure Power Law math. The article argues that many security problems are too small for VC. I agree. I often try to convince bootstrapped founders not to raise venture because doing so can turn a successful, slow-growing bootstrapped company into a failed venture-backed company because, despite a large infusion of capital, it couldn't double every year. VC is not monolithic--not by stage, strategy, or style. Venture is often equated with "Tier 1 Venture". Ross argues that VC is not always great for early-stage cyber--and he is right. Bootstrapping AND VC work when incentives are aligned. Does it work for an early-stage VC with a <$200M fund to invest in several early companies at reasonable valuations, setting up the conditions for reasonable exits that pay off for both investors and founders? Yes. Does it work for $800M funds investing in seed stage at $100M+ valuations? Well, that depends! Power law says it does (for VC), but the unfortunate externality is that these rounds destroy companies and founder equity more often than not. There is a role for patient capital in this ecosystem to fuel successful companies that retain exit optionality as they scale--driving exit value for both founders and investors.

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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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