Kyle Murphy

The 2024 NVCA Yearbook is out, and there are a few tidbits about the VC landscape 💴 ▪️More Places to Pitch: There's been a slight increase in investments made outside of Silicon Valley and other traditional tech hubs. Cities across the Midwest and South are seeing more VC activity, which could drive regional innovation. Not Seattle, though. Do better, PNW. ▪️Sluggish Fundraising, More Dry Powder: Although fundraising did not pick up steam in 2023, the amount of dry powder held by the industry ticked up slightly to $311 billion. It's out there, waiting to be deployed. ▪️The Old Normal: Corporate investors are still active-ish. CVC and family office investments were down but remain a significant minority of the deals and dollars committed in VC. ▪️Sustainable is Sizzling: ESG factors increasingly matter for deal-makers. More venture firms are making sustainability an investment focus area/criteria. Not-So-New Money: AI, biotech, and clean energy investing have been hot for a while. This isn’t breaking news, but it’s increasingly true. ▪️Risky and Safe: The current economic climate poses numerous challenges but also plenty of opportunities. Market volatility has made exiting more difficult but has also created attractive entry points for strong founders that could bear fruit later. All 91 pages of the 2024 NVCA Yearbook is below👇

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WE DID IT! After 2 years of pushing through the biggest downturn in VC in decades, Matthew Stotts 🌐 and I made it to the finish line with Fund I! We couldn't have done this without One Small Planet (Will Peterffy and Jack Wielebinski 🙏), Regen Network and Regen Foundation (Austin Wade Smith Gregory Landua and Will Szal), and a dozen other family offices and angels who believed that we can build a nature-positive economy utilizing our eye for software and our history as founders from day 1 A shout out goes to all of our founders (only four announced today, but watch this space - there are multitudes!) who trusted us enough to give us a spot on their cap table for this 10-15 year journey. This is the best job in the world, and it's because we get to work with people like you who have weird ideas in the best possible way. Using Bitcoin as anchor base load to decarbonize residential housing in America's most expensive energy market? Make every complex supply chain legible to machines so we can find and eliminate deforestation in commodity supply chains? Build deeply liquid environmental asset markets to price ecosystem services, on a blockchain, that no one needs to know is a blockchain? I'm so excited to get to work on this stuff for the next 10-15 years minimum, and to see what we can accelerate with our tiny fund in the next 5-6 years as we approach 2030 Onward! https://lnkd.in/gy3B-DFe

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Don't call it a comeback - growth equity deals on the rise again per PitchBook. From the attached article: "According to PitchBook’s latest US PE Breakdown, PE growth investments were on the rise in the first half of 2024, accounting for about 23% of all PE deals and surpassing leveraged buyouts, which made up 19%. That reverses a long-time trend. Growth investments in the first half of 2024 are already exceeding those from the whole of 2023, when they accounted for 20% of all PE deals." The heightened cost of capital is obviously driving a lot of this dynamic. However... it is interesting to note that PE funds are seemingly more willing to take minority stakes - a dynamic that is historically more from the VC playbook. The hard truth is that, even in a challenging funding and valuation environment, growth stage companies - both PE-backed and VC-backed - still offer large institutional investors a compelling return profile. A growth-potential profile not often available in the public markets. This dynamic alone will push PE and VC private market investment through and beyond the current challenges... Endeavor Colorado Zeb King Tegan Stanbach Kathryn Dickson #privateequity #venturecapital #entrepreneurship #innovation #founders #startups #investing https://lnkd.in/gKZKwXct

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Well-written and sourced article describing what's going in seed-stage venture market. At 9point8 Collective we tend to orbit the seed-stage (both ideating and developing companies to reach seed and helping post-seed companies refactor and scale in anticipation of A) and for many companies it's a critical inflection point which determines their long term success or failure. The main takeaways I was able to gather: 1️⃣ Many startups that raised seed rounds in 2021-2022 are struggling to secure Series A funding due to tighter market conditions and increased investor expectations. 2️⃣ Seed investors are becoming more cautious, leading to longer diligence processes and a preference for startups with strong traction or experienced founders. As a result, valuations have stayed relatively high even as deal flow reduces. 3️⃣ Startups are adopting various strategies to navigate this challenging environment, including cutting costs, raising bridge rounds or convertible notes, and M&A/acqui-hires. 4️⃣ Despite the challenges, there are opportunities for both startups and investors in this new landscape, particularly for those who can adapt to the changing market conditions. Investors are accumulating dry powder -- and with rates on the decline -- will be looking to deploy into companies with stronger fundamentals than their 2021-2022 counterparts.

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This resonates and is a terrific introspective piece by Andre Menezes. Love that he ends on an ambitious note: 🌱🍽️ "By focusing on addressing genuine consumer needs, fortifying health claims, and cultivating sustainable demand, the plant-based food industry can chart a course toward resilience and resurgence." 👉🏽As an early investor in both wins and losses in this space, I believe there is much more to come for alt proteins, and a resurgence is around the corner. #AlternativeProteins #Sustainability #FoodInnovation #FutureOfFood #ClimateAction #GlobalFoodSecurity https://lnkd.in/g8FwTivt

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I recently saw this metric from Carta’s 1Q24 VC Fund Report, which is very concerning. DPI... is nowhere to be found in earlier vintages that probably should start showing DPI. Funding early-stage projects is great, but ultimately, these venture dollars need to exit their investments and pay back their limited partners. That’s where the metric Distributed to Paid-In Capital (DPI) comes in. While managing a fund, we get interim measures during the life of the fund (e.g. IRR, MOIC), but ultimately, “you can’t eat IRR.” If you want to build a lasting venture capital organization, you need to start showing DPI for your fund. Keep in mind that this is traditional VC data from Carta, and is not strictly crypto venture. Crypto venture tends to get liquidity earlier (tokens) and things tend to go parabolic sooner (faster, more unicorns) - but I’d wager that the data here is somewhat similar for Crypto VCs… Not as much DPI as there should be from these earlier vintages. Read the full article, as well as a recap of all the crypto fundraising rounds for August, here: https://lnkd.in/g3eVJ-iF

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Amongst the most successful VCs in consumer in the past decade has been Kirsten Green at Forerunner So I asked her all about how startups can navigate the 70% reduction in consumer investing & why now might be the best time for VCs to look harder at the category. I loved this discussion. I always learn something from Kirsten. Click below to watch / listen https://lnkd.in/g3kiMPD5

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🛍️ Retailers: you can say goodbye to excess inventory headaches! Ganas Ventures is proud to invest in LiquiDonate, the tech that makes it happen, in community. Disney Petit, MBA, and the LiquiDonate team are transforming how retailers manage returns and inventory sustainably. Get in touch with Disney to learn more. #circulareconomy

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Advice for consumer brands raising later stage rounds: Valuation may be more about your investor’s target return and view of exit value than revenue / ebitda multiples Remember that in CPG there are few exits over $500m Knowing this, most private investors want to underwrite $200-500m exits and don’t want to earn less than 2x That means raising at $150m pre-money in most categories will be very hard Set your expectations right before you go out to raise, you don’t want a busted process Often the solution is insiders who want to increase ownership / exposure if even if means <2x on last money in

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Everyone's talking about PE and VC. But do you really know the difference? Here's the truth: They're both about investing in companies. But that's where the similarities end. Let's break it down: 1. What they actually do: PE: Buys established companies VC: Funds early-stage startups 2. Risk appetite: PE: "Let's make this good company great." VC: "This could be the next unicorn... or total bust." 3. Ownership mindset: PE: "We're taking the wheel." VC: "We're along for the ride." 4. Investment size: PE: Dropping $100M+ like it's nothing VC: Starting small, maybe $1M-$10M 5. Return timeline: PE: "See you in 3-7 years." VC: "Talk to you in a decade... maybe." 6. Exit strategy: PE: IPO, sell, or reshuffle the deck VC: IPO or get bought out 7. Day-to-day involvement: PE: "We're basically running this place." VC: "Call us if you need advice." 8. Industry focus: PE: "We'll buy anything that makes money." VC: "Tech, innovation, disruption. That's our jam." Here's the kicker: PE is like buying a fixer-upper house. VC is like betting on a racehorse. Both can make you rich. Both can lose it all. But remember: PE plays it (slightly) safer. VC swings for the fences. Which would you choose? P.S. Next time someone confuses PE and VC, send them this. You're welcome. 😉 P.P.S Check out my Newsletter for Founders to Raise Capital and Grow Revenues Here: https://lnkd.in/ejecDs9Z #BrainDumps | BrainDump #97

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This spring Antler US had 8,000 Founders apply to come and work with us. 300 Founders were selected to join our residency and we invested in 32 of those teams. Last week, I shared an inside look of this recent batch of investments with our inner circle of pre-seed & seed investors. If you’re interested in joining this group of investors - please comment below. Examples: 1) AI-driven drug discovery software: Created by Ph.D. holders in genetics, chemistry, and computer science, with the CEO previously raising $50M for AI models in genomics. 2) AI-powered oncology decision support: Founded by a serial entrepreneur with two exits, including a significant sale to United Healthcare. 3) Fleet electrification through data access: Led by an engineer-turned-product manager with experience at Amazon, Waymo, and SpaceX’s Starlink. 4) Unlocking wastewater data: Founded by a serial biotech entrepreneur and Ph.D. biochemist who launched the first commercial COVID-19 wastewater lab, raising over $50M in grant funding. 5) Building mobile games with AI companions: Developed by a 2X founder with a decade in gaming at companies like Ubisoft and a co-founder with 23 years of experience at Amazon, Unity, and Lucasfilm. 6) AI-driven peer review for scientific documents: Led by an AI research engineer with experience at Fermilab and the Smithsonian, alongside a software expert skilled in aerospace and robotics. 7) Turnkey AI agent platform: Built by a software engineer with 20+ years of experience, who co-founded a pioneering no-code AI platform and led engineering at a healthcare startup. 8) IP scoring and licensing for AI content: Developed by a team with diverse backgrounds, including work in AdTech, fintech, and legal roles. 9) AI-powered talent optimization: Developed by a former growth equity investor managing $180M in HR and marketing software investments. 10) Automated application security: Founded by engineers who built and sold a company, with backgrounds in fintech, model risk, and AI automation solutions. #founders #venturecapital #vc #startups

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Did you know that YC founders get a secret weapon… and it’s not what you think. “Bookface” is YC’s internal social network. It was needed because YC had funded larger batches and the hardest part of a community is knowing who is in it and who you can trust and ask for help. On the platform, founders share real methods and advice that would break if it were shared widely It’s secret knowledge shared with a trust-first community - answering 80% of the questions a founder can have about building and selling a product, be it to clients, candidates or investors. Before the platform, if you had a B2B startup, you had to reach out cold to potential customers. Now there are over 1000 YC companies you can sell your service to and all of their contact information is in Bookface. As a result, YC alumni companies are often over 50% of your new sales during YC. It’s superpowers like this that make YC deals so attractive compared to the norm. You are investing in a founder with a 10x network already!

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Part of the sports asset class is knowing from front to back the entire sports asset value chain, and the interconnected nature of the market. Most folks… don’t even know. At all. In fact this week alone there’s a been a handful of family offices trying to understand more about the industry from our deal flow… Everyone thinks teams, the big 4 professional leagues… and honestly those just don’t have the outsized returns (normally). Think of it this way- you go into a stadium and you buy a pretzel, a drink and go sit down at your seat. What you didn’t consider is the value chain and the companies that know the propensity of the market to get you there… a sports company focused on- digital advertising for the food and drink, maximizing your purchasing power, the POS system itself, you bought those seats on a ticket exchange platform, even the subiminal fan experiences around you that maximize your ability to enjoy… and spend both there and recurring at home. All in the sports value chain. Now imagine being in a fund that has placements in all of these from front to back bringing NAV growth, outsized returns by positioning and interconnected value of other portcos, and cash distributions. 🤔

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Recently, I joined Daniel Scharff on the Startup CPG Podcast to break down these core financial pillars to help founders build a resilient and scalable brand. Here’s a quick rundown: 1. Cost of Goods Sold (COGS) → Understand the full cost to develop, produce and receive each product (it’s way more than materials.) 2. Customer Acquisition Cost (CAC) → You need to use your CAC as your constant in the spend equation. 3. Cash Flow → Scaling without a handle on cash flow is a recipe for disaster. Too fast of growth can kill a company as quickly as too slow of growth. 4. Margins → Razor-thin margins (stand alone or via discounting) means playing on hard mode. 5. Retention Rate → Repeat customers are the foundation of long-term success in e-commerce. I break down each one in more detail on the podcast. Listen to the full episode here: https://lnkd.in/eJzypw6x

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Could a retail model like Foxtrot work at scale? What's the future of plant-based meat? How should CPG brands think about channel strategy? On the latest The Consumer VC, I chatted with Ashley Hartman & Andrew Bluestein from Bluestein Ventures. Bluestein Ventures invests in the future of food. Some of their early investments includes New Culture, meati™, Vive Organic, Bizzy® Cold Brew, Foxtrot. They are fresh off raising a $45 million fund 3. We discuss: • Going from family office to VC • Differences & similarities investing in inventory and technology businesses • Could the Foxtrot model work at scale and be venture backed? • Retail Reinvention and the Future of Convenience Stores • Future of plant based meat and food tech • Trends in food industry digitization & much more To listen and be the first to know when a new episode drops, subscribe in the comments 👇👇👇 #food #podcast #venturecapital #fundraising #futureoffood #CPG #retail

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2H24 VC: Slow and Furious Race… We are racing to the election and then will likely crawl to a decision. The nasty rhetoric likely contributed to the slight down tick in consumer sentiment last month, the first time since the beginning of the summer. Headline inflation came in a touch hotter than expected at 2.4% in September. The paradox is that the Conference Board just increased its 3Q24 real GDP growth to 1.8%, up from 0.8% in its prior forecast. Conditions are quite good, but the world feels very chaotic. Obviously, the macro-economic conditions directly affect the venture capital industry as liquidity informs returns and the pace of new investments. The velocity of capital is critical and now the system feels stuck. According to a recent report from Pitchbook, both the number of investments and amount of capital invested significantly declined in 3Q24.  For the quarter, $37.5 billion was invested in 2,794 deals as compared to $55.5 billion in 3,661 deals and $35.0 billion in 3,365 deals in 2Q24 and 3Q23, respectively. Notwithstanding the obvious demand for innovative solutions, the healthcare technology sector also saw continued softness in investment activity. According to Rock Health, 3Q24 investment was $2.4 billion across 110 deals suggesting an annual pace between $10 - $11 billion, consistent with 2023. The data do not lie. Thoughts for the rest of year below…https://lnkd.in/ewBQceMk Flare Capital Partners #digitalhealth #venturecapital

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The new quarterly review is live! Each quarter, I dive into the latest trends and shifts in the venture capital market, covering both the broader macro perspective and the unique insights we’re seeing at Florida Funders. Check out my latest article to stay informed on what’s shaping the VC landscape and how we're navigating it at FF. Always eager to hear your thoughts – let’s keep the conversation going! #VentureCapital #FloridaFunders #MarketInsights

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Great points !! The dynamics of selling a SaaS business, especially to Private Equity (PE), can be complex and emotionally challenging. When considering this path, founders need to evaluate their role, ownership, and influence in the company post-sale. Here’s my take: 1️⃣ If you’re the **majority holder** and believe in the business’s future, continue as CEO to maintain influence and control over the direction. Retain enough "skin in the game" to drive results and keep a hand on the wheel. 2️⃣ If you’re a **minority holder**, with a new PE-appointed CEO, it may be wiser to take a substantial payout and invest in a new venture. In this situation, you often lose decision-making power, risking becoming a spectator in a company you helped build. 🔑 **What’s crucial?** If you still have meaningful equity, you should have a say in the direction. When you’re not in the driver’s seat, it’s often better to start fresh, investing your energy and passion into something new where you’re not just "cheering from the sidelines." Selling is a monumental decision; make sure it aligns with your values and vision for your future. #SaaSFounders #ExitStrategy #PrivateEquity #BusinessOwnership #EntrepreneurJourney #Leadership

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