Sam Shank

If anyone is in North County San Diego, on Thursday May 2nd, we will be hosting a tech entrepreneur and investor meet up at 5:30pm. We’ll have a couple speakers, one of which is a fin-tech start-up raising a round, followed up by a presentation on the state of the stock & crypto market. We host these events quarterly and usually get a lot of founders and investors to attend. If anyone is interested, please message me and I can send you the details. LaunchPad San Diego #startups #startupincubator #entrepreneur #investing #crypto #meetup

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Alex Dichter provided a great overview at the Thayer Ventures Annual Meeting recently about how the industry has evolved over the past 24 years. See below. In 1999, $1B- was made by Delta Air Lines 4% - was the net profit margin in the airline industry 14 - was the average yield per mile for a paid ticket $20M - was the amount one client paid Digitas North America for a CRM 20% - of travelers were willing to spend extra for add-ons 59% - of Americans worried about Y2K $80 - was the average lodging daily rate 184 - was the number of Hyatt hotels in the world In 2023, $5B - was made by Delta Air Lines 3% - was the net profit margin in the airline industry 20 - was the average yield per passenger $0 - is the amount Delta Air Lines paid for personalization directly 53% - of travelers willing to splurge for better experiences 54% - concerned about climate change $155 - is the average daily rate 1376 - was the number of Hyatt hotels in the world Highlighting that: The #airline business is tough and always will be, and the #hotel business is better. Travelers are voting with their feet - they want to transact online and serve themselves and the companies need to get out of their own way to make it easier to do so. Most of the technology to solve the problems in these industries already exist and have been here for years. It's always about people in this industry. #LegendsTravel #ZeroPartyData #TravelDNA #LegendsTravelDNA Legends

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Interesting read from The New York Times to think about with your morning coffee. Jim Breyer from Breyer Capital stated over a year ago that valuations of AI startups were getting "frothy" during a CNBC interview at Davos. Call it the end of the beginning of the A.I. boom. Since mid-March, the financial pressure on several signature artificial intelligence start-ups has taken a toll. Inflection AI, which raised $1.5 billion but made almost no money, has folded its original business. Stability AI has laid off employees and parted ways with its chief executive. And Anthropic has raced to close the roughly $1.8 billion gap between its modest sales and enormous expenses. The A.I. revolution, it is becoming clear in Silicon Valley, is going to come with a very big price tag. And the tech companies that have bet their futures on it are scrambling to figure out how to close the gap between those expenses and the profits they hope to make somewhere down the line. This problem is particularly acute for a group of high-profile start-ups that have raised tens of billions of dollars for the development of generative A.I., the technology behind chatbots such as ChatGPT. Some of them are already figuring out that competing head-on with giants like Google, Microsoft and Meta is going to take billions of dollars — and even that may not be enough. “You can already see the writing on the wall,” said Ali Ghodsi, chief executive of Databricks, a data warehouse and analysis company that works with A.I. start-ups. “It doesn’t matter how cool it is what you do — does it have business viability?” #ai #startups #venturecapital #coffeethoughts

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Boostrapping vs VC Funding A great breakdown from Data-Driven VC on the bootstrapping vs. VC funding decision. ✨ Key Takeaways: Bootstrapping means leveraging personal savings and revenue for growth, offering full control but possibly slower progress due to limited resources. VC funding provides rapid capital and strategic support, enabling faster scaling but often comes with equity dilution and external pressure. 👉 Your choice depends on your goals. Looking for independence and sustainability? Bootstrapping could be for you. Want to scale quickly? Consider VC funding. #cofounder #startups #innovation #inovexus #startupcommunity #entrepreneurship #vc

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Hiring alert! One of our newest MKT1 portfolio companies is hiring a founding marketer. nodaFi is vertical SaaS that understands a wedge-in strategy. The team is scrappy and values marketing--and really understands their ICP - facilities managers. If you're based in the Bay Area and interested in helping bring a tech-first approach to an industry that operates with pen & paper, take a look. The founders are awesome (cc Jacob Pandl & Michael Loyda) JD link in the comments.

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Having a Cars and Capital event tomorrow in Southern California with Oren Klaff. If you want to join message me. https://lnkd.in/gDQ4D39u Oren Klaff Bridger Pennington #InvestorEvent #FamilyOffice #InvestmentOpportunity #CarlsbadEvent #PrivateEquity #WealthManagement #InvestmentConference #CapitalRaising #NetworkingEvent #IndustryLeaders #FinancialGrowth #InvestorsMeetup #WealthBuilding #BusinessGrowth #InvestmentForum

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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

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Insightful breakdown from my great Partner Omri Amirav-Drory on the simple factors that really separate the top 1% of investors from the rest, and how more operators should become investors! https://lnkd.in/gEiZdT2h

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🌟Innovative VC Firm Overcomes Exits Drought with Secondary Sales🌟 ⛵Navigating a challenging landscape where exits are scarce, Santa Barbara Venture Partners (SBVP) has pioneered a novel approach to sustain its growth and attract investors for its second fund: secondary sales. Instead of waiting for traditional exits like IPOs or acquisitions, SBVP opted to sell shares of its portfolio companies, demonstrating its ability to generate returns for investors and stand out in a competitive market. 🎤According to Dan Engel, founder and managing partner of SBVP, these secondary transactions have been a game-changer, sparking investor interest and bolstering the firm's credibility. By leveraging its recent successes, including a lucrative stake in sports-betting company DraftKings Inc.' acquisition of digital lottery app Jackpocket, SBVP seized the opportunity to return profits to its limited partners (LPs) and pave the way for its second fund. 💡Engel highlighted the challenges faced by young VC firms in raising subsequent funds, particularly amid a downturn in exit activity and heightened investor scrutiny. With traditional exit routes becoming increasingly elusive, the pressure is on for firms to demonstrate tangible returns and establish a track record of success. ✨"For us, secondary sales have been a game-changer. They've helped us return profits to our LPs and attract investors for our second fund," said Dan Engel. 💰For SBVP, the decision to pursue secondary sales was driven by the need to provide liquidity to LPs and validate its investment thesis in the eyes of prospective investors. By strategically offloading portions of its holdings in high-performing portfolio companies like Bark Technologies and Rad AI, SBVP not only generated substantial returns but also bolstered investor confidence in its ability to deliver results. ⚠Despite the complexities and potential stigma associated with early share sales, Engel emphasized the importance of prioritizing investor returns and seizing opportunities to unlock value for stakeholders. With a focus on profitability and transparency, SBVP remains committed to its mission of delivering sustainable growth and maximizing returns for its LPs. 🔍 "Returning profits to our investors is our top priority. By strategically selling shares, we're proving our commitment to delivering results and driving value for our stakeholders," added Engel. As SBVP continues to explore secondary transactions and expand its investor base, the firm stands as a testament to innovation and resilience in the face of market challenges. 🚀 ✅ Looking to raise capital for your #fund and increase the international pool of your LP #investors?   🤝 Need warm #LP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments?   ▶ G+QUANT's link for inquiries and fund decks: https://lnkd.in/gjC_EuTE #VCInnovation #SecondarySalesSuccess #InvestorReturns #ValueCreation 

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Let the wave begin! Pioneer Fund company Recall.ai *grew their revenue 10x* in the past year, has 300 enterprise customers, and just raised a $10M Series A led by Ridge Ventures. David Gu and Amanda Zhu dropped out of college at age 19 to start the company. They've grown it exponentially with a tiny team. They make it easy to build meeting bots that are cross-platform. They're aggregating all these different APIs into one unified API, the way Twilio did with cell phones. At first it "sounds" easy to build a meeting bot -- just integrate with the Zoom API. But in fact there's a huge long tail of things you need to build, security and privacy pitfalls, automations, transcription complexities, integrations, the calendar invites where someone is using Google Meet or Teams, staying up-to-date with the libraries, etc etc. Recall takes care of all of that. It's WAY easier to build on top of Recall.ai and focus on the features that make you unique. Congratulations to the Recall team!

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At Forum we look at thousands of deals each year across our Accelerator and Pre-Seed funds but only end up investing in a little over 1% of those startups.  As an early stage VC, I am in the business of saying no to nearly every startup I meet, and while there is nuanced rationale for many of the startups I pass on, a vast majority of businesses that don’t meet the qualification to get funded typically fall into one of two buckets. ▪ First time founders have a tendency to go out to market too early to raise pre-seed capital ▪   I’m sure most founders have heard some iteration of this from VCs that ultimately pass on their business.  In some cases it's a blanket excuse covering up for other pass reasons- perhaps a VC doesn’t believe in a team or isn’t bullish on the market opportunity - but in many cases founders simply haven't proven enough to the market to warrant an investment. I meet many teams with an articulate vision for the product that they want to build, but they either haven't performed enough customer discovery to prove demand for their initial wedge product, or need to raise pre-seed capital to build out an MVP.  In those cases, pre-seed investors are unwilling to underwrite those risks.  To be default fundable, teams need to be able to keep costs low, perform extensive customer discovery, and ship some version of an early product - pilots and early paid customers are key. A huge piece of this is having founding engineering talent on the team. ▪Not every startup is a venture opportunity ▪ By definition, a venture backed business is solving a problem within a market opportunity so massive and so desperately needed, that its growth rate is off the charts.   It spreads like a weed, absorbing almost unlimited amounts of capital to fulfill demand within its customer base.   Each year there are maybe 20 companies launched that ultimately have venture scale outcomes. The bar to reach this rarified air is unfathomably high and the reality is the vast majority of founders simply aren’t building for opportunities that have the potential to be one of these generational companies. Many startup founders view VC as the only viable option for capitalizing their business, but not every great business is a venture business, and most successful founders never take VC dollars.  In order to reach an IPO/acquisition large enough to generate venture returns, a startup needs a credible path to $100s of millions in revenue. This is the standard by which early stage opportunities are evaluated. The flip side to this, and I share this feedback often with founders I meet that are building interesting business in non venture markets, if you are able to scale to $10- $20M in revenue that can be a massively successful outcome for a founder.  There are investors who focus on these type outcomes, namely lower middle market PE shops, and the typical path to those deals is a bootstrapped business or a friends/family capital raise.

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It's a big day for Michael Gulmann and Otto as they announce $6m in funding from Madrona and a dream team of travel leaders, many of whom Steve Singh, Matt McIlwain, Erik Blachford, Barney Harford, and Hugh Crean have been personal mentors and inspirations. Otto's bold ambitions to revolutionize how we plan and book travel require such a team. The travel industry is ripe for disruption. We all know it and experience it every day: the tired booking engines and transactional flows that haven't changed since the early 2000s. Enter Otto. Leveraging advancements in natural language capabilities and modern travel APIs, Otto is like having the most competent and knowledgeable business travel agent at your fingertips. Get on the waitlist here: https://lnkd.in/dWJ5gEjn  Many of us at Madrona Venture Labs have a lifelong passion for the travel industry, and at the top of the list is Jay Bartot, who led Otto's multi-agent AI architecture and product development over the past year. It's been a team effort thanks to Jason Flateboe (design), Flora K. (operations), Sam Dore (talent), and Simon Tam (former CTO of Egencia). Learn more about Otto roles by emailing [email protected] Thanks for the coverage today: Taylor Soper at GeekWire https://lnkd.in/dU46Pi7V Ivan Mehta at TechCrunch https://lnkd.in/dPmfd2CT Justin Dawes at Skift https://lnkd.in/d3HSvU-e #ottotheagent #travelstartups #aiagents #venturestudio #funding

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Rolling into another day of the Primary Summit. Hit me up if we should connect onsite. Kudos to the Primary Ventures team so far, as yesterday’s Pre-Seed Summit was on point. Mar Hershenson, Benjamin Sun, Chris Douvos, Zach Weinberg, and Graham Pingree all dropping helpful nuggets for fund managers. Some paraphrased highlights: - Chris Douvos (AHOY Capital) - Most fund decks are terrible. Start with your people (not your strategy) and know you have about 6 slides of his attention. - Zach Weinberg (Curie.Bio ) - beleives SF’s AI talent is a significant advantage over NY, wouldn’t build AI in NY. Also questions if VC exits can keep up with VC expansion (generally hilarious and smart Twitter follow) - Mar Hershenson (Pear VC) - VC is so much more competitive now. It’s not enough to be an ex-founder with a great network and domain expertise. Have a better “why you are different” or do something else! - Benjamin Sun (Primary Venture Partners)- still sees arbitrage in going long NY venture (vs. SF). Do the work to keep various influential networking nodes aware of what you’re doing and how you think.

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❓ Did you know? Washington, DC has the highest density of Michelin-starred restaurants per capita in the country!❓ Last week, we had the privilege of hosting some phenomenal restaurant operators in the dynamic DC market. The energy and insights shared were truly inspiring! 🔑 Key Highlights from Our Discussions: 1. Reservation Management Platforms: OpenTable stood out as the most popular choice among the event attendees. 2. Growth Strategies: We explored a range of innovative strategies including leveraging TikTok influencers, enhancing SEO, and collaborating with hotel concierges to boost demand. 3. Membership Programs: One of our attendees recently launched a yearly membership that offers special reservation guarantees and has been seeing great success. 4. AI: All attendees were thinking about how AI can help their businesses, and several were using ChatGPT in some way, daily. #RestaurantGrowth #Innovation #HospitalityIndustry #restauranttechnology #AI #DCRestaurants

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The state of venture capital is wild right now. We are witnessing a surge of innovation across the spectrum: - Funds merging - VC doing PE - PE doing VC - Secondary funds - Buyout funds - Spin-out funds - Debt funds - Continuation funds - Infrastructure funds - GP turnover - Hard Tech surging - Family Office uptick

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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 Gartner Mike Chalfen Hussein Kanji Kirsten Connell https://lnkd.in/eh8mhcJb

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The secret—if it ever was one—is out on private equity fondness for vertical software. While PE-backed acquisitions were down 50%+ from a peak in 2021, vertical buyouts have continued to grow, and the fervor seems to be gaining steam. In today’s essay, we will pose an answer to one question: is PE a viable path to exit for a venture-backed startup?

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As the critical backer of two of the success stories here, Rocket Lab and Planet, DCVC is delighted to see the heroics of these teams highlighted — and their positive impact on humanity’s security and prosperity. It is also an interesting story of the difficulty markets — private and public — have in filtering out charlatans and hypesters in deeply technical arenas that promise gold rush outcomes, whether it is in space systems (as is the case here), AI (we can all watch it happen), energy and climate tech, biotech, or robotics.

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