Ellie Davis

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👇

97

4 Comments

👏 Nice lil deep dive into Ascension and Fund III with Bheven A. & Emma Steele. Read more to learn about our fund focus and thesis and what's on the cards for the next year of investing and fundraising.

40

2 Comments

At the CFA Society Indianapolis Venture Breakfast last week I mentioned how SaaS is losing its VC footing to AI. A couple of folks asked for more information, so I figured I'd share today's PitchBook newsletter on the topic. (https://lnkd.in/eJ285n-a) Amid shifting landscapes in the tech sector, corporate innovation funds and investment dollars are increasingly pivoting towards AI experimentation. As traditional SaaS startups experience a deceleration in revenue growth, the focus is shifting. 💡 As we witness this transition, it's crucial for professionals in tech and investment sectors to understand how AI can drive not only efficiency but also innovation. ❓ Let's discuss how your organizations are adapting to this shift. Are you experimenting with AI? What impacts do you foresee in your industry? #AI #CorporateInnovation #TechTrends #StrategicInvestment

19

Nice job as always to our friends at BIP Ventures today on their State of Startups in the Southeast report and debrief — only feedback is that we couldn’t see which new pair of Nikes that Mark donned today. First up — BIP summarizes the report in four key takeaways: a) Through the Trough (tldr; things are flat but improving) b) The Southeast Is Ahead (context: the Southeast has shorter time between rounds compared to US average for two years in a row) c) Rise of Private Credit (tldr; non/less-dilutive capital continues to find a way post-SVB especially with more “default alive” startups) d) AI is the Tool, Not the Toolbelt (translation: the impact of AI will be/is far beyond the headline-grabbing core AI platforms) Next up — back to the long term trend line…? Always tough to apply averages to an outlier industry, but stepping back is a healthy exercise. Q1 2024 and Q1 2019 had the same total deal count (~650 deals) and total capital deployed (~$2.5-3B) in the Southeast. Annually, both 2024 (so far) and 2019 had average post-money valuations that were ~20-22% periods below the national average. This is a rebound from being as low as 30% below the US average in 2022 (the data has indicated and our own experience suggests the Southeast had less medicine to take and generally took it early). Last thing — swinging lamps in Pisa. State league tables are murky, but they’re worth a look. In this data every state is projected DOWN on deal count when compared to 2023, except maybe South Carolina and Mississippi on relatively low volume. The Carolinas are projected UP in total capital deployed, but everyone else is FLAT or DOWN. So… what does that mean? We read a lot of this data and visualize a pendulum that is perpetually moving between demand (for capital) and supply (of capital). With this in mind, we don’t put UP/FLAT/DOWN into a GOOD/MEH/BAD category, because it really depends on which seat you’re in. The bid/ask spread went super wide (if not non-existent) in early 2022. Although it has narrowed since and continues to do so, normalizing takes time and 2025 may just get us back to equilibrium. cc: Front Porch Venture Partners

35

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

24

1 Comment

The practical application of AI to help manufacturers eliminate unplanned downtime is key to our current and future offering. We do not label ourselves as purely an AI company, as that is one component of our value delivery, but I can say we have a world class team of AI Engineers building incredible tech alongside a team of world class Condition Monitoring Engineers. I am bullish and excited to see how Central Ohio emerges as a global AI hub with Intel as an anchor. cc: Brian Graham, Seyed Mohammad Parvasi, Ph.D., Jaidev Krishnan, Matt Longhouse, Chris Berry

62

3 Comments

📢 Calling all pre-seed and seed founders in Chicago! I'll be at TechChicago next month, and I'm hoping to connect with founders! If you are currently building, or even just thinking of building a venture-backed company, I want to get to know you! ☕️ Building in Chicago? Leave a comment or shoot me a DM! I can offer coffee & office hours on fundraising, feedback on your current pitch deck, intros to other investors in my network, etc. etc. 👀 Know any pre-seed founders looking for investor office hours or just a connection to a founder community? Tag them below & I'll reach out 🙌 Not building yet, but it has always been a dream to be a founder? Send me a DM and we can chat about the decision & I can connect you with founders who have made the leap #venturecaptial #startups #chicago

31

7 Comments

The Ohio VC community is growing! Added 5 more funds to the graphics for my fellow founders. As you can see, there's a massive opportunity in Ohio for more Pre-Seed and Seed Funds. Early investing is riskier, but you also get more equity stake for your investment. What other trends do you notice in the space? Check out the added funds - The O.H.I.O. Fund, Sidecut Ventures, 1809 Capital, Interstate Fusion Ventures, and Fireroad #venturecapital #fundraising #startup

47

12 Comments

I’m excited to publicly share something that has been in the works for a few months at the 9point8 Collective. We’ve launched our Virtual Studio! This is a program for early-stage companies that provides the coaching, development and venture-building tools they need to find traction and scale. The program is modeled off of the venture-building processes found inside #VentureStudios, which have delivered 2X IRR and exit 45% faster than traditional #VC-backed #startups over the last 10 years. Some of the secret sauce to this is that studios have found a way to validate strategies early on, de-risk execution, preserve and extend limited runway, and create efficient business models very fast. We at 9point8 are seasoned studio builders and are on a mission to bring this value to founding teams as they navigate their startup journeys. What we’ve done with the Virtual Studio is distill these key processes and techniques, add in our own expertise and best practices, and package them into a program which meets start-ups where they are. We are now opening up our Summer 2024 Cohort, slated to begin in July. Space is limited, so I’m sharing the opportunity with my network before we fill the cohort. Here are the details: -It’s a 3-month program which takes the founder through the key phases of venture-building and de-risking (refining target market, product-market fit, economics and financials, planning, and fundraising). -Founders can expect to achieve greater focus, improved operations and increased marketability to customers and investors. -The end results include collaboratively-drafted operational plans, commercial / investment pitch decks, and elevated management practices within the founding team. These draft off frameworks from 9point8's proprietary venture-building process: Targets Over Everything. -It’s built for founders facing (or approaching) a critical inflection point, where fresh perspectives and strategic management levers are critical. These might include fundraising preparation, new product launch, market expansion, and post-MVP scaling efforts. Why did we build this program? Because building a new company is really hard. 90(!) percent of startups fail, and even moderate risk reduction can create a huge lift to survival rate and eventual returns. The studio model is proven to drive greater venture success; our virtual program is extending that success to more and more teams. The program is highly collaborative and hands-on, so we only take on a few companies at a time. This is a great opportunity for founders who are looking to level-up their abilities when it comes to unlocking traction, growth, and an express lane to superior returns. If interested, please reach out immediately as we expect the program to be fully enrolled very soon! Blair Merlino Evan Allen Neal Ghosh

55

17 Comments

Fundraising decks are important but only within the context of a well-orchestrated fundraising process. A deck itself is unlikely to directly lead to a term sheet. Rather, it is important to understand how you want to use the deck (or any collateral for that matter) as part of your fundraise process. For example: - Is it to secure the first meeting with a VC? A teaser deck is important. But so is the email snippet and warm referral! - Is it part of a deeper-dive session about your business? Excellent. Is it a deeper dive on product or GTM? And, is the next step a track to a partnership meeting? - Is it a diligence deck? Excellent. Is it more about showcasing the financial plan and key levers? ... what is the ONE thing you want this deck to help you achieve? More tips on fundraising your early-stage round here: https://lnkd.in/gvWYaCwk #startups #venture #fundraising

6

Final highlight from last week's Kickstart Fund's CEO summit - Adam Edmunds gave our closing keynote and shared insights on what he's learned over the years...here's one insight: Be relentlessly metric-driven, but don't lose sight of what matters most. While having a metric-driven business discipline is crucial, don't let it come at the expense of your deeper motivations, personal relationships and core identity outside of work. Always be true to you and remember that the only thing you take with you are the relationships. 

14

Happy Thanksgiving! Love this perspective on fund diversity and deployment strategy. "For early stage investing, large portfolios (~100 investments) outperform small portfolios (~30 investments). The goal for pre-seed or seed GPs is to invest in a large enough number of companies to maximise the chance of finding outliers (about 2% for ~50x, 5% for ~15x according to data from Dave McClure). From that point, once you have built a sufficiently diversified portfolio, you can consider a strategy to deploy remaining funds into follow-on rounds for best looking companies as "call options". This only makes sense if you think these follow-ons are the best opportunity available for that capital. Evaluate them as you would any other investment. A lot of VCs (and LPs, for that matter) understand the logic of concentrating into winners, but not the first step of building an appropriately sized portfolio. Why? Probably because the former amplifies risk, while the latter reduces it — playing into the principal-agent problem in VC and the "power law" smokescreen. It also happens to be a lot easier to manage a small portfolio. I've spoken to LPs that say they prefer small portfolio strategies because concentrating into winners is more likely to produce >10x returns. In a world where only the top 5% return >3x, it makes ZERO sense to optimise for that level of risk. Especially when you are allocating other people's capital (pension funds, MFOs, sovereigns, etc). "Few investors demand diversified funds, so GPs don’t offer them. A slow and steady 'venture is a numbers game' pitch is much less emotionally compelling than 'I am a rock star who can consistently beat the odds.' And GPs need an emotionally appealing pitch to get funded." - The Pervasive, Head-Scratching, Risk-Exploding Problem With Venture Capital" This is how we built our fund's strategy -- to invest early in a diverse portfolio. Our current partially deployed fund already has 42 bets, averaging a deal every 1.8 weeks. Dave McClure taught us that investing in 50 companies on a 10x lower cost basis leads to close to the same ownership in each one as investing the same capital in just 5 companies. This approach seems advantageous for startups too as it allows us to give an easier yes to diverse and early companies. We are still finding our sweet spot around valuations and portfolio construction, and we are passionate about these core principles. Jamie Rhode, CFA has done many podcasts on this for those who want to hear more about the data. I look forward to fund 2 when we will have enough capital to both make diverse bets (60+) as well as have follow-on capacity for winners when they are, as Dan says, the best available opportunity for that capital. For investors and startups, what do you think about this strategy? https://lnkd.in/gizefUYC Benjamin Rolnik Julia C. Manu Satyavolu Aman Verjee, CFA Sophia Platt

42

21 Comments

For most startups, their growth strategy depends upon their ability to raise money. SKU's mentor community includes mentors who can help founders with their fundraising strategy. Spring '24 mentor Karen Howland has been a wonderful addition to SKU. She joined Rose Park Advisors as a Managing Director in 2023 through an acquisition of CircleUp Growth Partners. At CircleUp, and now at Rose Park Consumer, she led the investment team focused on investing in early-stage consumer product brands. She works closely with her portfolio companies, advising on a variety of things including, capital structure, business trends, and key growth drivers. Before joining CircleUp, she spent over 15 years at top-tier international investment firms, including Citadel, Barclays Capital PLC, and UBS where she held positions in the Investment Banking and Equity Research divisions, focusing on the consumer and retail sectors in New York, London and San Francisco. Karen was also the founding member of hedge fund TWO OCEAN CAPITAL LP, which later merged into Citadel. SKU is currently interviewing potential mentors for the Fall '24 Track. If you are interested in learning more, please fill out the SKU Mentor Interest Form: https://lnkd.in/grvpPD8e If you are a founder who is interested in being mentored by a team of CPG superstars, we are accepting applications for Fall '24 Track until May 31. Apply here: https://lnkd.in/gizfPVVd Meghan Shookman Katie DeVito Elise Jacobs Blanck Bruce Hinson Abby June Richards, CPA-TX Scott Sanders Matthew LoLordo MS / SSGB Kristi Bridges Cassandra Hume Kelsi Petersen #foodservice #foodservicechannel #salesstrategy #channelstrategy #accelerator #cpgaccelerator #cpg #consumerpackagedgoods #micheladas #micheladamix #startup #cpgstartup #startups #mentoring #mentors #mentorshipmatters

20

5 Comments

⏰ Startup founders work night and day...even weekends. (I know because I used to be one) So here's a great way to spend an hour or two today: Apply to Entrepreneurs Roundtable Accelerator's Summer cohort! 🗓 The deadline is this Tuesday, April 23 at midnight. The application is thorough but should only take about an hour. And even those who don't get in say it's a great exercise in concisely explaining your business. ❗ I can't think of a more efficient way to throw your hat in the ring for a $150,000 initial investment and a transformative 16-week program with 1,000+ mentors and alumni. So give it a shot. I'd love to hear about what you're building! https://lnkd.in/eQBE4tKx

50

7 Comments

Summary: The article discusses the current challenges faced by VC firms in attracting new capital, but highlights how established firms like Kleiner Perkins are still able to raise large funds. It also touches on the potential impact of AI on investment strategies. Key takeaways: Many VC firms are struggling to secure new capital in a tepid IPO environment. Established, brand-name firms like Kleiner Perkins are still able to raise significant funds. AI is emerging as a potential game-changer in the investment landscape. Counter arguments: It may be premature to attribute Kleiner Perkins' fundraising success solely to AI; other factors could also be at play. The article may overlook smaller VC firms that are also finding success in fundraising. #venturecapital #vc #venture #startups #artificialintelligence

5

Excited to join Blackout Tuesday # 18 at LocalGlobe this coming Tuesday centered around the theme: 'Increasing Venture-backed Black Founders: Journey from Seed to Series A and Beyond'. This event will focus on the challenges Black founders face when scaling startups and provide insights on navigating growth stages from Pre-seed to Series A. After a panel of founders sharing their experiences, the breakout session will dive into practical strategies for scaling. ✏ Register here: https://lnkd.in/eHZpMDN2 Launched in 2020, Blackout Tuesday aims to: 1. Increase Black representation in VCs 2. Boost venture funding for Black founders 3. Elevate Black employees in venture-backed companies 4. Support Black GPs 5. Increase Black or Black-aligned LP representation Balderton Capital Phoenix Court Blackout Tuesday

190

1 Comment

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

571

118 Comments

Summary: Harlem Capital, a venture capital firm focused on backing diverse founders, is raising its largest fund to date of $150 million. This would be its third fund and is a testament to the industry's continued support for diverse communities. Key takeaways: Harlem Capital was founded in 2015 with the goal of supporting diverse founders. The firm has $174 million in assets under management and has made investments in over 80 companies. The successful raising of the $150 million fund would be a show of success for both Harlem Capital and the industry's continued focus on diversity and inclusion. #venturecapital #vc #venture #diversity #dei

12

1 Comment

Southeast VC Update: Q2 2024 PitchBook Venture Monitor Highlights The Southeast continues to hold its position in the VC regional landscape #5 in dollars raised for Q2 2024 🥉 #3 in deal count (just behind the West Coast and the Mid-Atlantic) H1 2024 Southeast Breakdown:  📊 10% more deals than Northeast  📈 30% more deals than Mountain region, 20% more than South  💰 5% more dollars raised than Mountain region  💸 23.5% more dollars raised than South YoY Funding Trends:  📈 Southeast: Up 29% 📈 Mid-Atlantic: Up 136%  📉 Midwest: Down 67%  📉 New England: Down 11%  📈 West Coast: Up 59% Key Trend: While closing in on Mid-Atlantic numbers, we are seeing more deals but smaller rounds. This could indicate strong activity occurring in the seed & early-stage funding, despite the macro challenges. (Pitchbook classifies the Southeast as AL, FL, GA, KY, MS, NC, SC, TN, Puerto Rico, & Virgin Islands) #BuildInSE

20