Nick Ornitz

For early-stage founders one of THE most important parts of your GTM motion needs to be understanding the HIGH-PRIORITY PROBLEM(S) you solve for your prospect. However, even that is too much of a simplification... Because when you've mapped out your key stakeholders, you need to understand the problem you're solving, the answer to the question 'What's in it for me?' for EVERY SINGLE ONE OF THEM. In your deal you will have an Economic Buyer, a Champion, User Buyers and Technical Buyers, and you need every one of the to say YES (or at the very least from your User and Technical Buyers, not a 'no') to get your deal done. And for them to say YES, you need to be solving a high-priority problem for each them. This problem might be a different by stakeholder, or might be the same problem, just seen through a different lens. Obviously, for different solutions those problems will be different, but there are some commonalities on the types of things they will usually care about. ➡️ User Buyers - for your User Buyers, the problem is usually around features and functionality. What does your product do that makes their lives much easier, better, more efficient, more effective? ➡️ Technical Buyers - usually for Technical Buyers, they want to know you don't break anything or that you're in line with whatever compliance infrastructure they have. Essentially, you want your Technical Buyers not to say 'No!' ➡️ Champion - you're going to ask your Champion to advocate for your solution. They're going to be putting their reputation on the line for you, and may even be putting their jobs on the line, so you really need to be solving a HIGH-PRIORITY problem for them. For it to be a high-priority it usually needs to be related to their targets / KPIs /OKRs - so you need to understand what these are and show how your solution helps them hit these targets in a way they cannot do without you. ➡️ Economic Buyer - as your EB is likely more senior, they usually care more about strategic projects as well as the cold hard cash of the commercial benefit of your solution. So you need to understand what these strategic projects are, and how your solution gets them to where they need to be, in a way they cannot do with their incumbent solutions. That last part is key, EBs are usually change adverse, so you need to show how hard - or ideally impossible - it will be for them to hit their targets without you. And commercial benefits for EBs come down to reducing costs, maximising revenue and reducing risk. So how does your solution move these needles? Even if they don't have a target for these, EBs will always be thinking how they will justify the use of their budget in buying your solution. And there's no better justification than a rock solid ROI. Much more on this in our booklet Value Creation Explained where we go through the Value Pyramid of understanding the PROBLEM you solve and the VALUE you create for every one of your stakeholders. Link in the comments below ⬇️

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Think PMF is the Holy Grail for scaling your startup? Think again. Finding Product-Market Fit (PMF) is just the tip of the iceberg. While it’s crucial, it’s not sufficient for scaling to a whopping $100M in Annual Recurring Revenue (ARR). Inspired by Brian Balfour's insightful framework, here’s what you really need to steer your startup towards colossal success: the Four Fits. Here's the breakdown: 1. Market/Product Fit: Like PMF, but deeper. Solve a significant problem in today's market with your product. If your product nails a current need, you're starting right. 2. Product/Channel Fit: Develop channels that showcase your product to its audience effectively. Fancy tech means nothing if no one knows about it. A fantastic product without robust distribution channels will linger in the shadows. 3. Channel/Model Fit: Balance acquisition costs with revenue. Are your channels bringing in users profitably, or are you hemorrhaging cash to capture a dollar? Misaligned strategies or monetization models might be the culprits. Reassess. Pivot. Profit. 4. Model/Market Fit : Align your pricing and revenue structure with market expectations. You could have a stellar product, but if no one wants to pay for it, adjustments are needed. Scrutinize the pricing, structure, and buying behavior. If you have Stalled Growth? Analyze these Fits! Your be-all-and-end-all PMF might be shining, but something else might not be clicking. Dive into these other fits, find the conflict, and you’re on your way. Each fit reinforces the next. Achieve synergy, and the route to massive scale unveils itself. Let's build stronger, more resilient companies that don't just aim for PMF, but master the Four Fits to truly thrive. Embrace these insights from Brian Balfour’s framework today and unlock your startup's full potential! Original post by : Majd Alaily Repost by : Salem Bagami Chief Executive Officer Digital Transformation Company & Managing Director 2080 Ventures Email: [email protected] Website: www.2080.ventures #StartupGrowth #BrianBalfour

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Non-Engineering Roles at Early-Stage Startups Offering $120K+ Base Salary with Meaningful Bonus and Equity: Chief of Staff @ Milo (Consumer), Remote Biz Ops Lead @ Fractal Agriculture (FinTech), Remote; Backed by Virta Ventures Chief of Staff @ CakeAI (AI SaaS), NY; Backed by Primary Venture Partners Demand Generation Specialist @ Rootly (Consumer), Remote; Backed by YC, 8VC, Gradient Ventures Account Executive @ CommandBar (Enterprise SaaS), Remote; Backed by Soma Capital, YC, Insight Partners Product Marketing @ Slope (Enterprise), Remote; Backed by YC, Union Square Ventures, Liquid 2 Ventures Supply Planning Manager @ PROVEN Skincare (Consumer), Remote; Backed by YC, FJ Labs, Soma Capital, Social Capital Account Executive @ Accrue Savings (Consumer), NY; Backed by Ground Up Ventures, Tiger Global Chief of Staff @ UNIGRID Battery (Climate), CA; Backed by Union Square Ventures, LiquidMetal Ventures Job details and the full list (40+ opportunities) are in the comments below. If you're interested in non-tech jobs focused on specific industries like HardTech, HealthTech, Climate, etc., then DM me or let me know in the comments.

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Pure B2B SaaS dealflow for VCs will reduce for sure. As a founder, if you can become profitable and make millions while growing healthily, begs the question why give away equity for extra cash? Thanks to AI, making software has become significantly cheaper than ever before.

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A top 5 worst VC behavior.... VC wakes up and sees an article on X about a new competitor to a portfolio company. VC just copies the Techcrunch article and sends a text to founder simply saying "Have you seen this company yet? $5M seed round backed by A16Z" Please, don't be this type of VC. Instead, if you're sending a link about a competitor, provide a relevant insight to the founder For example, "seems like they're targeting SMBs and not enterprise," "different GTM than us, starting w/ a PLG motion" Founders are under enough stress. Don't add to it.

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The VC market is finding its footing after the unprecedented surge during the ZIRP era ⚖️ To put things into perspective, a staggering $305 billion was invested in Q4 2021 alone 🤯 Fast forward to Q3 2024, and we’re back to pre-ZIRP levels, with $91 billion invested across an average of 11 deals per quarter. But here’s the kicker: it’s not a single, unified market anymore. It’s two markets—AI…and everyone else. A jaw-dropping 95% of all venture capital in Q3 went into AI startups, leaving just 5% for all other sectors. And even within the AI ecosystem, the money is flowing disproportionately to infrastructure companies - those building the foundational layers like OpenAI, Anthropic, xAI, Scale, and others. So, what does this mean for founders and investors? It’s a stark reminder of how quickly markets shift. AI isn’t just the flavor of the month - it’s reshaping the venture landscape entirely. For startups outside the AI bubble, it’s a tougher road to funding, but for those solving real, non-AI problems, there’s still opportunity (perhaps even less competition). These were my key takeaways from a fantastic event organised by the good folks at Frontline Ventures I attend last week. Shout out to Ruth Sheridan for the great "State Of The Markets" presentation 🙌 What does everyone else think? Would love to hear your thoughts: 🔺 Are we over-indexing on AI, or is this the natural evolution of tech investment? 🔺 What does this mean for innovation outside the AI space? #startups #AI #venturecapital #vc #capitalmarkets

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Cap Table guidance from Cake Equity and my former colleague Chris Hoffmann, ECA 🚀🧢 VALUATION & EQUITY MANAGEMENT: Companies should aim for balanced equity plans that are fair yet practical, involving vesting schedules to ensure employees earn their shares. Giving employees sufficient time to exercise options post-vesting can also prevent punitive exercise costs. This approach encourages loyalty and values employee contributions without overwhelming the cap table. HIGH ADMIN DEMAND IN LATER STAGES: In growth phases, especially Series C and D, managing cap tables becomes complex, with frequent hires, exits, and equity grants. Software platforms (e.g., Cake) are essential to keep cap tables organized, as manual systems like Excel can't handle the volume and complexity efficiently. IMPORTANCE OF DAILY & MONTHLY AUDITS: Regular audits are crucial to keep track of terminations, new grants, and board consents. Errors in terminations and grants can lead to costly issues during audits, financial reporting, or funding rounds. SECONDARY TRANSACTIONS & LIQUIDITY OPTIONS: Allowing limited liquidity for employees and early investors, such as through tender offers or company-facilitated secondary transactions, is valuable. These mechanisms offer flexibility without requiring a full exit or IPO, which has become less common due to the IPO market slowdown. CAP TABLE ERRORS CAN BE COSTLY: Historical errors in cap tables can create major headaches. Two examples highlight this:    - In one case, a series D company had to spend $100,000 to $150,000 on cap table corrections, which delayed planned transactions by six months.   - Another company had converted multiple financing rounds incorrectly, requiring a year and a half of back-and-forth with attorneys and investors to correct the errors. These situations emphasize the need to organize and verify cap table data from the outset to avoid costly fixes later. RECOMMENDATIONS FOR FOUNDERS: Early-stage companies should seek expert help in setting up and maintaining cap tables, even if through fractional CFOs or specialized attorneys. Organizing all equity-related documents digitally, using reliable software, and conducting regular audits can save time, money, and stress in the long run.

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KNOW YOUR REAL BUSINESS ECONOMICS • GAAP Revenue • Cash Flow • Cash • Contribution Margin • CAC • CAC Payback FUNDRAISING: PRESENT & SUBSTANTIATE FINANCIALS • Investor needs to know what your forecasts are • They need to believe them David Weiden, Khosla Ventures

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If you're valuing SaaS companies like traditional ones, think again. You're probably missing key metrics. Here are the essentials you should focus on: - ARR (Annual Recurring Revenue): The lifeblood of SaaS, showing predictable income. - Churn Rate: High churn can sink future revenues. - Customer Acquisition Cost (CAC): Knowing this helps balance spending and growth. - Lifetime Value (LTV): This tells you how much revenue a customer will bring over time. Traditional businesses don't operate on these dynamics. SaaS companies scale fast and pivot quickly. By ignoring these metrics, you risk undervaluing potential gems. So, update your valuation toolkit. Agree or disagree? #BrainDumps | BrainDump #107

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Rob's goals: Hours worked: 30hours Goals last week: continue interviewing shortlisting candidates for athena (ongoing) continue studying a16z, sequoia, founders fund investments (ongoing) continue studying deep tech: biotech, nuclear and engineering (ongoing) what did I do monday - meetings, payroll, linkedin stuff tuesday - admin, finance, review goal submissions wednesday - update website copy, stock funds, interview 6x founders thursday - read startup genome report, pg essays, rewrite curriculum friday - longevity course, mit bio course. saturday - visit mumbai, brainstorm india specific ideas that help with poverty what did I learn: Two ideas for addressing poverty and slums in mumbai: Mortgage penetration in India is only 10% vs 50%+ for USA western countries. This is a trillion dollar market and can help people build wealth by owning a home and functions as compulsory saving as they have to pay mortgage and house appreciates. Help locals sell craft goods like jewelry, accessories to western markets on TikTok / Instagram etc. Focus on telling their story, so every item has a story of how it's made and the family that it's helping as differentiation. e.g people don't buy what you do they buy why you do it. thoughts here: evernote-com/shard/s514/sh/ac484897-8fee-601f-cce0-30b1638190fa/R03uGhyAwMuYNH9CjVDdXanbhuAmLh-n0XRqpfVSGyIZ_gfBWHm6ym92Tw also singapore's public housing approach is a good case study. they started with 70% poverty and 30% people living in slums, now 80% population housed in public housing: youtube-be/3dBaEo4QplQ?si=fgMqiWYxWlG1skyR slowly going through longevitycourse-org lot's of good stuff here Goals next week: continue studying VC investments focus on Asian decacorns and industries that have potential to address poverty, create jobs and also be 100bn+ business, e.g mortgages, accelerating exports, manufacturing etc. continue interviewing shortlisting candidates for athena continue studying deep tech

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As a B2B SaaS VC 👩‍💻 and a huge data nerd 🤓, fewer things bring me more joy than a truly statistically significant analysis (600+ companies surveyed) of B2B SaaS metrics across early stage companies. Great work by our team at Emergence Capital! See comments for full report, and please let us know how we can make this better in the future!

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IS FREE USAGE TRULY MARKET VALIDATION? I recently spoke with a founder who developed a fantastic investment analytics app -- one that is even being used by a major investment bank! He also has a handful of loyal users who have stuck with him for years. But here is the catch: when I asked about his Annual Recurring Revenue (ARR), the answer stunned me... $0! Why? Because he was afraid to charge for it, thinking the product was not "ready" yet. Despite having users, he claimed he had "market validation." No wonder he iss struggling with fundraising. Here is my take: Founders need to start charging from Day 0 -- even before a single line of code is written. Here is how: - Get Letters of Intent (LOIs). - Ask for paid Proof of Concept (POC) development. - Put a price tag on your solution during the FIRST conversation with potential pilot users or clients. Don’t fear the price tag -- it is your first true validation.

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Have you ever looked for theory that can answer - how to approach investors - what kind of product to build first - how you’ll defend the company against competitors This new article from CDA partner, Kevin Maney extends Steven Johnson's writing from the book Emergence to #CategoryDesign. All #Startups and #VentureCapital teams should dig in. (link to article in comments)

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Every one of my startups that grew to $20M ARR at break-even or better Followed the RVNU 5-step process as their launchpad Step 1: Re-educate Step 2: Review Step 3: Audit Step 4: Rehabilitate Step 5: Grow It's all about taking that first step So rather than take an MBA, or get lectured by your VCs We created a framework and assessment to get the ball rolling. Takes 20 minutes, and it's totally FREE. We got you 👊🏼 #sales #saas #startups #venturecapital #GTMdebt

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The Series A Dilemma in SaaS: Recent data from Peter Walker at Carta shows that the Series A in SaaS tends to be >$10M, with a pre-money valuation of ~$45 million. This means your company could be valued at >$55M after the financing round. Ideally, you should have an ARR of at least $2M when raising a Series A, corresponding to an ARR multiple of 20x and more. With the Seed round included, you might face around $15M in liquidation preferences (assuming a 1x liqpref) and have already given away 40% of your equity to investors. If you lack complete confidence in your company's potential as a VC success story and a clear plan for scaling the business further, it might be wise to reconsider raising this round. This year, I've already had numerous M&A discussions where founders made the mistake of proceeding without such confidence and are now likely to walk home with $0 on exit. If you have any doubts about achieving venture scale with your startup, I think the last good opportunity to exit the VC game is after the Seed round. _______ 📬 More in-depth content on SaaS, KPIs, Valuations, and more in my saas.wtf newsletter! #saas #startups #vc #venturecapital #funding #investment

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I spoke with a VC who’s deployed over $5B in capital. Here are a few insights from that conversation that any SaaS founder would benefit from: 1. Foundations > Growth Tactics Too many companies get distracted by tactics, hoping the next 'big move' will drive growth. But the companies that scale well have one thing in common: they’ve nailed the fundamentals. They focus on nailing it before they scale it, establishing clear communication channels, and creating a defensible strategy that makes them hard to copy. 2. Hire with Precision, Not for Headcount Scaling effectively means hiring to solve specific problems, not just filling roles. It’s about knowing exactly where your bottlenecks are and bringing in talent that can remove them. One example that came up was the impact of hiring a skilled Growth Product Manager. This person not only brings a playbook for experimentation and data insights but also ensures that product features align with user needs—resulting in faster feedback loops and a stronger competitive position. Every hire should have a defined impact metric. 3. Transparency is a strategic moat The companies that lean into transparency, even when it feels risky, benefit from stronger feedback loops and a more loyal customer base. Jason Fried and Adam Robinson are perfect examples if you think about it. If your product has quirks or limitations, own them. Honesty might feel risky, but in the long run, it can become one of your greatest assets. TLDR; The best growth strategies aren’t the flashiest. It's often the boring first principles that guide you to solutions that last.

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The Anatomy of a $10M SaaS Exit: How different Deal Structures determine how much you'll get and when 💸 Understanding the most common components of M&A transactions is crucial for maximizing your exit outcome and get a deal that matches your preferences. Let's break down 4 common ways to structure a $10M exit: 1. Cash Upfront: The simplest option. You get the full amount immediately, allowing for a clean break. 2. Cash + Earnout: A portion paid upfront, with the rest tied to future performance. This can potentially increase your total payout but comes with some risk. 3. Cash + Earnout + Seller Note: Adds a debt component where you become a creditor to your own company. This can offer tax benefits and flexibility in deal structuring. 4. Cash + Earnout + Seller Note + Equity Swap: The most complex structure. You retain some ownership in the acquiring company, potentially benefiting from future growth. Each structure has its pros and cons, affecting both the timing and total amount you'll receive. The right choice depends on your goals, risk tolerance, and belief in the company's future performance. A well-structured deal can make a significant difference in your exit outcome. Even if the deal size looks the same at first glance. #saas #startup #founders #investor #exit #mergersandacquisitions

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