Lee Arthur

Start-up rules - Just say no - If you get an acquisition offer don't be afraid to say no. If you think about your greatest investments in life, investing and believing in yourself is usually a great return on investment. A few years into building Tripadvisor with my partners Steve Kaufer, Nicholas Shanny and Thomas Palka, we received a very attractive offer to buy the company. For all us it would have been life changing economics and a reward for years of hard work. After consulting with our board and doing a serious gut check, we decided to say no..... I would be lying if I did not say that saying no was very hard. All of us were young, with young kids and not much in savings and the payout from this acquisition would have been significant for all the founders and employees. However, we believed that what we were building was a unique service that had a great future and that farther down the road there would be a greater financial outcome. As time went along we received a few additional offers that we also turned down. Eventually we did sell the company to IAC/Expedia at a price far above the initial offer we turned down. Obviously not all start-ups get acquired and if your company does receive an acquisition inquiry you should consider if very carefully. Talk with your board and think carefully not only about yourself but your other shareholders and employees. It is a serious decision affecting many stakeholders. However, If you are fortunate to receive an offer to buy your company, don't be afraid to say no. Your best return on investment in life is usually an investment in yourself.

39

2 Comments

I'm crowdsourcing a better investor database for Boston area capital because founders and VCs shouldn't have to pay Pitchbook and Crunchbase for a basic directory. A few months ago, I assembled a list of emerging managers in the New England region and was surprised that this hadn't been done before. I've also had founders repeatedly ask me, "Who invests in ____?" and I don't exactly know. I put together an initial list of about 90 firms, angel groups, family offices, and accelerators. While the list isn't perfect, it's a start. If you're a founder, investor, or community member, take a moment to help make this data just 1% better. I'll keep the editing permissions open as long as everyone stays friendly and civil. https://lnkd.in/gFt6bZPp 186 Ventures .406 Ventures 3CC | Third Culture Capital AlleyCorp DeepTech Argon Ventures Athenian VC Baukunst Blindspot Ventures Branch Venture Group Broom Ventures C10 Labs Companyon Ventures Cybernetix Ventures Encoded Ventures Equal Opportunity Ventures First Star Ventures One Way Ventures NextView Ventures Raiz Capital Hyperplane Glasswing Ventures Techstars Boston Accelerator MassChallenge Innospark Ventures New North Ventures Underscore VC York IE

460

105 Comments

What do you do when you don’t want to raise venture funding, or don’t have the option? Jive got started in 2001—my first day with the founders was September 11. We had no other choice but to bootstrap, which we did for five years. Eventually, we reached a crucible moment: We could stay independent and bootstrapped, or we could ride the social software trend to something much larger—but we’d have to raise money. I spoke with Lighter Capital CEO Melissa Widner about what it took to take Jive from a small open-source project to an IPO-ready SaaS business, and how it shaped my ideas on when and how to fund startups to optimize success. It’s not about funding versus bootstrapping, but about when and how much. Check it out here: https://lnkd.in/gDQSmuFy #Entrepreneurship #Startups #VC #IPO #Reignition

37

4 Comments

✨🚨 Another Make Cents post is live! 🚨✨ In this post, "AI & its Impact on Vertical SaaS: The Gates of Distribution have Flung Open", I explore how AI is impacting vertical SaaS workflows and its implication for distribution and defensibility. We defy.vc are more excited than ever to invest in vertical SaaS because we believe there's tremendous value leveraging AI to enhance human productivity across tasks like 1) structuring data, 2) analysis, 3) recommendations, and 4) taking action. I also walk through why customer acquisition costs are at an all-time low, attributed to more than just AI-driven product functionality. Read more ⬇ and share your thoughts and feedback in the comments! https://lnkd.in/gRVcJASH

46

3 Comments

Shazeer, the co-author of a seminal research paper that ignited the Al boom, left Google in 2021 after the company refused to launch his chatbot. Google has now signed a $2.7 billion deal with Noam's startup, Character, and Shazeer has agreed to return to work for Google. #Google #Al #WhatsBuzzing #suggestions #recentupdates #connections #LinkedIn #Jobsearch

6

Trigger warning. UK founders to VCs: "you (generally) suck". I was taken aback by the intensity of comments made during an exit fireside chat organised by our friends at ARGO, Jeff and Aneesh. Room full of founders, we're talking about the importance of starting exit planning very early (say 3 years+ prior to exit) and the message is: "I would never feel comfortable bringing this topic up to my board, I just would not trust them to handle any of it well". Ensued a discussion about Tier II board vs. Tier III boards, how much VC boards suck, how VC's just do not know how to interact with founders and how a number of key topics are best actively avoided. Nods across the room. The Tier I Board, the kind of place where you could actually bring up strategic topics like, you know, "who might actually want to buy us some day and how do we start building the right kind of relationships today" seemed to be a sort of faraway land, as if sitting with the Knights of the Round Table or the Jedi High Council would actually be easier to achieve. Damn. So we can say all we want about founder-friendly blah blah but if this is still the prevalent reality for UK and European founders, what the heck are we doing and when do we start the topic of "being a great board member" seriously? We need to collectively get out shit together and start training investors to be better board members.

624

124 Comments

💪💡Wisdom is learning from past mistakes from others but also oneself. Retrospection with action is powerful. An insightful weekend read from the WSJ… Christopher Mims shares his list, from 10 years of covering consumer tech for the The Wall Street Journal: ( link here: https://lnkd.in/eKj2wX_t ) 1. Disruption is overrated. 2. Human factors are everything in tech adoption. 3. People lie to themselves… and to you. 4. Tech bubbles are productive, even if wasteful. 5. We’ve got more power to shape how tech impacts us. Some of my list, from 25 years of early stage consumer internet investing and operating: 1. Tech disruption is overestimated in the short run, underestimated in the long run. (Amara’s Law) 2. Social proof is powerful in tech adoption. 3. Hope kills. Execution is everything. 4. Run towards tech bubbles. 5. Tech optimism empowers positive change.

2

Keys to Catching an EdTech Unicorn 🦄 • Too much investment going into incremental vs. transformational change - only 7% categorized as "transformative" EdTech in 2020 • EdTech struggles to attract VC funding due to challenges selling to risk-averse districts favoring incumbents • More capital needed for diverse founders closest to problems, innovative use of student data, and inclusive product design The EdTech industry is ripe for disruption, but realizing billion-dollar "unicorn" potential will require redirecting investment toward truly transformative solutions led by diverse innovators. #Education #EarlyYears #Earlychildhoodeducation #Childcare #Nurseries #Preschools #Edtech #K12Education #PrivateEquity #VentureCapital #ImpactInvesting https://lnkd.in/d9ipZxUH

5

“The funding landscape has changed during the time we have been involved in it, and continues to evolve,” “And we’re evolving with it, to ensure that there is even more flexibility for companies to access the specific capital they need for a given scenario. We’ve funded well over 180 technology companies across multiple industries and verticals, and we’re not slowing down any time soon.” Regarding the total addressable market for Tractor to operate in, Imam explains that the one-funding-product-fits-all approach has required tweaking, simply due to the totally different needs expressed by the financial decision-makers, related to time, total access to the capital itself, and looming milestones that require a more strategic approach to accessing capital. “If you’re a SaaS company, or an ecommerce company, or a hardware company, or operating in a particular niche or vertical like marketing tech for example, you will have a different set of needs for funding based on your revenue,” explains Imam. “We’ve moved to a scenario-based funding model, based on the most common queries we receive at this point in time. B2B Enterprise SaaS we will always be able to fund in an instant. Other scenarios arise when the financials require a bit more flexible and bespoke assessment.” “In particular, our Inventory product points to our capability to fund in some very very specific and founder-focussed ways, and that flexibility really excites us, now and for the future.” Thank you for this write up SmartCompany!

37

4 Comments

Had an opportunity to talk with Dan Currell at DCA about the future of card-linked offers. The idea of providing meaningful and relevant offers to consumers based on their purchase history is awesome, but not if high friction prevents the offers from ever being used. Financial institutions deliver billions of merchant-funded offers a year, but the vast majority go unseen and unused. That's why we built our SmartOffers Platform, to make it easy for consumers to engage with offers. They save, the merchants find their best customers and the financial institutions get transaction fees and ad revenue. It's a win-win-win. Since the US Digital Advertising spending forecast for 2024 is projected to be $300B according to Statista, there's a lot of potential for merchant-funded card-linked offers, if they just get a little smarter.

2

1 Comment

Looking forward to discussing how changing demographics and culture norms are affecting investment opportunities in longevity, health and well-being at The Care Summit today Alongside Cake Ventures' Monique Woodard, Ziegler's Dan Hermann, Oak HC/FT's Billy Deitch and JPMorgan Chase & Co.'s Jennifer Edwards, we’ll dive into the trends shaping how we are investing in the space: - Last year marked one of the most significant social and economic moments in modern times: The number of older adults—those aged 50 and over- surpassed the number of children under the age of 15 for the first time. - In 2020 the 50 plus population contributed $45 trillion to global GDP, or 34% of the total. That equates to about 3x the revenue of the world’s 100 highest- earning companies in 2020. - The U.S. population grew by 24.5 million from 2010 to 2022, and Hispanics accounted for 53% of this increase – a greater share than any other racial or ethnic group. - Women around the world and across all ages drive 64% of consumer spending

42

2 Comments

There has been a lot of doom and gloom about trends in Net Revenue Retention. But there are still some companies driving extraordinary performance. We look at one example from the open PeakSpan Capital Ibbaka Survey on Net Revenue Retention in 2024. What is surprising here is that this company has both high churn and high NRR. Can you guess which SaaS vertical it is in? https://lnkd.in/gZ9hauYS #NRR #NDR #SaaS #pricing #GenAI #generativeAI #churn

1

While David C. Baker focuses on the agency space, this article outlines a very useful decision-making framework for leaders across industries. A lot of startup CEO's and founders are grappling with the same questions/opportunities. VC's trying to coach CEO's should also read this and lookout for the signs of paralysis.

8

2 Comments

🎙️ Exciting insights from SaaS Academy's CEO Johnny Page on the Expertise Economy podcast! Johnny breaks down their two-step approach to helping SaaS founders: 1️⃣ The Discovery Call: Uncovering the founder's "why" and long-term vision 2️⃣ The Strategic Game Plan Session: Creating a 90-day action plan to achieve 12-month goals 🔑 Key focus: Identifying and solving business constraints Want to dive deeper on the secrets of building a successful SaaS business? Check out the full episode here: https://lnkd.in/dju-Be2u #SaaS #BusinessStrategy #SaasAcademy #ExpertiseEconomy #Podcast

6

"Real transformative change goes beyond episodic efficiency efforts or organizational restructurings. It instead aims to reprogram an organization’s very DNA and embed a new operating model, guided by a bold strategy, to reach a company’s full potential". I couldn't agree more with this statement, true for any type of organization, at any maturity stage and regardless of their mission and objectives. Through my experience threading complex transformation projects, I can never emphasize enough the utmost importance of: - A crystal clear mission, to which the strategy will unlock enablers and leverage key differentiating factors, - A path with clear objectives and well-defined target indicators to ensure not only a data-driven approach to road mapping, but also to ensure a focus on where value is created, and - An organization-wide engagement program, from the board to executives and associates, from conception to implementation and on-going improvement. Engagement is key! #StrategicTranformation #DigitalTransformation #TransformativeChange #OrganizationalDNA #OperatingModel #Strategy #Mission #Objectives #DataDriven #ValueCreation #EngagementProgram #Leadership #TrueNorth #Roadmapping #CostOptimization #Growth #OrganizationalEffectiveness #DigitalEnablement #ChiefTransformationOfficer #Alignment #PhasedTransformation #ContinuousImprovement Defining your 'True North' - This McKinsey article outlines how companies can successfully transform by defining a clear "true north" strategy. It emphasizes focusing on four work streams: cost optimization, growth, organizational effectiveness, and digital enablement. Transformations should move through phases, starting with quick wins and then scaling initiatives. Making transformation part of everyday operations, with strong leadership and integration, ensures lasting impact. The role of the chief transformation officer is vital in aligning strategic goals with daily business activities. https://lnkd.in/gyyS6eJy

11

🗞️ Breaking News: Red Ventures Selling CNET at a huge Loss❗️ Context: Red Ventures, the privately held digital media and marketing juggernaut based in Fort Mill, South Carolina, is selling CNET, one of the largest tech publishers on the web, to Ziff Davis for just $100 million. For context: Red Ventures bought CNET for approximately $500 million. Reason for the Sale: Total traffic to CNET has dropped by a staggering 50% over the last three years. The main driver behind this decline is a 68% drop in organic traffic (loss off Google rankings and traffic). Tables turned: This sale is a stunning turn of events for CNET, which once bought Ziff Davis (then a tech magazine firm) in a deal worth roughly $1.6 billion - more than two decades ago. Catch Up: - Ziff Davis trades publicly with a market value of $1.94 billion. The company lost about half of its marketcap over the course of the last 48 months. Strategic rationale: If Ziff Davis is able to ink a content licencing deal with Google, Bing/Microsoft or ChatGPT (or else e.g. X.AI) - like Reddit did - it might turn out to be a very smart deal …

5

1 Comment

Orb (#uncorrelated) raised $25M to continue building their pricing and billing platform that lets companies automate a range of different billing modes e.g., usage-based, subscriptions, or a mix, marry analytics and billing, collect and meter product usage data, invoice customers, generate revenue reports, draw on product usage insights to find revenue opportunities, model out alternative pricing plans (thus enabling experimentation), orchestrate changes in real time, schedule future price changes for certain customer cohorts or contract renewals, directly embed draft invoices into product billing portals, surface past-due invoices, and recover failed payments automatically. "Orb gives companies a single source of truth that can connect every unit of product usage to revenue. We’ve found a particularly strong fit in AI, cloud infrastructure, fintech, and dev tools, and have seen most of our growth come from those verticals.” Orb’s revenue grew 5x in the past year, and the customer base tripled to include brands such as Vercel, Replit, Pinecone, and Perplexity. https://lnkd.in/gYh4y2tg

66

4 Comments

Wonderful article about Emily Knight and the whole The Engine Accelerator team on the amazing work their doing changing the world with #ToughTech!

28