Sam Wong

Precise execution is a function of alignment, though we settle for vague definitions of common terms like 'Niche Vertical SaaS' To give us the best chance of executing on an investment thesis focused on 'Niche Vertical SaaS,' we wanted to ensure raw clarity on a definition. Here's where we're at: 1. Vertical Focus: Refers to SaaS solutions designed exclusively for specific industries or sectors, characterized by tailored functionalities that address unique challenges or requirements of those industries. This specialization and customization of SaaS offerings are not just niche in terms of market size or business type but are intrinsically linked to the specific operational and strategic needs of particular sectors, potentially leading to higher adoption rates and a greater impact on operational efficiencies. 2. Less than 250,000 U.S. Business Entities: Setting a threshold of fewer than 250,000 businesses helps focus on smaller, more specialized markets that are less likely to be saturated with competition. This size indicates a targeted yet sufficiently large market to sustain a new entrant or allow for growth within niche offerings. 3\. **Less than 3% of Total U.S. Businesses**: This parameter aligns with the need to find markets that are not overly crowded. By keeping the focus on industries comprising less than 3% of all U.S. businesses, you're likely looking at industries that are specialized enough to have specific needs, which can be highly advantageous for Micro SaaS solutions designed to meet very particular business requirements. 4. Growth Rate of Less than 20%: A cap on the growth rate at less than 20% helps avoid industries that might be experiencing a bubble or are overly volatile, which could represent higher risks. It targets industries that are growing but not so rapidly that they might become too competitive too quickly or might not sustain long-term growth. 5. High Proportion of SMB and Mid-Market Entities: This criterion focuses on industries predominantly made up of small to mid-sized businesses. It ensures the targeted niche naturally aligns with the intended customer base for Micro SaaS products, emphasizing sectors where decision-making processes are quicker and organizational agility is higher. 6. Moderate to High Fragmentation: Prefer industries that exhibit moderate to high fragmentation, indicating less dominance by a few large players and more room for smaller players to defend market share. This characteristic often leads to faster adoption of innovative solutions, as businesses in fragmented industries are looking for competitive advantages. Thoughts? We miss anything? Still too vague? #microsaas #privateequity #acquisitionentrepreneur

1

1 Comment

Want to know what metrics venture capitalists really care about? Aumni's latest analysis dives into 10,000+ data points from portfolio companies at all stages. Here's what we uncovered: 1️⃣ Revenue, net burn rate, FT headcount, and gross margin are the hottest metrics. 2️⃣ Most VCs request 6-9 specific metrics per quarter from each portfolio company. 3️⃣ Cash is king in the early stages but loses its throne as companies grow. 4️⃣ Operational metrics dominate at Series D+, taking up half of the top ten. Key insights: - Cash-on-hand and cash runway plummet in importance from a combined ranking of 3.5 in the seed stage to barely making the top ten by Series D+. - Metrics spotlighting operational efficiency, like gross margin, total OpEx, EBIT, bookings, and debt balance, become crucial as startups scale. PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/ejp-Bhnu

14

2 Comments

The AI Demo isn’t easy. Many of the major AI companies have demoed their AI systems, first starting with pre-recorded, & now pushing into live demos. They don’t always work. Multiply Murphy’s Law by a non-deterministic system & it’s not unreasonable to expect AI demos to nearly always hiccup. Demo disruptions aren’t disaster. These systems are early & changing rapidly. They might suggest the system requires work & tuning, not a fundamental challenge. But, they can be problematic in proofs-of concept. Proofs of concept are extended demonstrations of the software. Well-structured PoCs align on success criteria at the outset. These criteria enable vendors & customers to agree on what success looks like. Worflow proofs-of-concept are relatively straightforward. They are deterministic. Can I process a loan application in 5 minutes? Yes or no. But as AI applications shift to selling outcomes implicitly or explicitly, the PoC becomes a testing ground of those outcomes. Non-determinism means sometimes the PoC won’t produce the required wow moment. This also means the PoC criteria must be more flexible. How does a buyer evaluate a probabilistic system? Do we compare it to human performance? Speaking to some practitioners, they’ve shared with us human labelers typically agree on 60-70% of the time. Does a AI robot need to be as accurate as a human assuming it will be much less expensive? Or will we expect more as we do in self-driving cars? If AI systems require human assistance, then the ROI of the system must include some human operating expense - whether explicit or implicit. Some teams will want to benchmark systems in parallel to determine the relative performance. With most startups building atop existing models & setting aside differences in fine-tuning, the ultimate performance should be relatively comparable, provided they use the same data sets. Will startups compete on access to different data sets? Today, there are more questions than answers about how to sell AI agent systems. We’re hosting an event on the evening of Sep 10th in San Francisco to interview leaders in the space moderated by Dave Morse, former CRO at Hebbia & VPS/VPCS at ScaleAI to talk about some of these questions. If you’re interested to attend, see the details here : https://lnkd.in/dA8tJEcz

35

6 Comments

Vishal Sachdev highlights the strategic integration of open source and proprietary tech in architecting tech stacks, developer ecosystems and resulting business models. The world class companies effectively balance value commoditization in open source and value capture in proprietary tech. This is the strategic challenge for companies operating in #blockchain and #AI. I believe those who operate at the intersection of blockchain *and* AI stand to win this strategic battle...

3

1 Comment

When I first started investing in AI a decade ago, enterprise software meant digital filing cabinets. Salesforce built a $35B business on this simple premise: Humans input data, Software organizes it. Sales reps who focused on closing deals rarely updated their CRMs. When they did, the data lived in rigid structures, missing the rich context of actual sales activities happening in the wild. 2020 marked a turning point. By 2020 LLMs were enabling software to process unstructured data—no more waiting for manual inputs. These systems started processing emails, calls, and documents on their own. They made decisions. They took action. Now, software has hit an inflection point: AI is working together in a System of Agents. These AI teams mirror elite human organizations, with specialized members handling distinct functions. Software becomes the worker itself, capable of understanding, executing, and improving upon traditionally human-delivered service. Think about the money at stake here. Most software companies fight over IT budgets. But Systems of Agents can tap into something much bigger—the $4.6T companies already spend on their workforce. Here's what gets me excited: technical founders who build AI teams (aka Systems of Agents) that never sleep, get smarter with every interaction, and nail real business metrics are going to capture an entirely new wave of enterprise value. I can tell you confidently—the scale of this shift is unlike anything we've seen in software. 💬 What do you think? LMK in comments.

79

8 Comments

🎭 Backdrop: The Why of VC Platform as a Differentiator. Yesterday I answered what platform in VC is: the value-add support and resources funds provide beyond capital. But why is capital not enough? 🚀 Venture capital has exploded over the past few decades, from $1.5 billion in tech investments in 1991 to a peak of over $694 billion in 2021. At the same time, there are ~137,000 startups emerging every day. 🌐 During the dot-com era, tech investments reached $90 billion by 2000, backing companies like Google, Amazon, and PayPal. Despite the crash, the VC industry kept momentum. Heavyweights like Sequoia and Accel diversified toward mobile and social startups, leading to major investments in companies like Facebook, Uber, and Airbnb. Accelerators like Y Combinator, Techstars, Seedcamp, and 500 Global emerged, providing founders with critical resources, mentorship, and networks—laying the groundwork for today’s platform approach. 🌍 VC continued to evolve. Hubs emerged outside Silicon Valley, with Europe and Asia now major players. Data and analytics are central to investment decisions, and holding periods have significantly shortened. The rise of mega-funds, micro-funds, and specialised investors has introduced new dynamics. Corporate venture capital (CVC) has also grown, with major firms launching their own arms. As a result, competition for resources, expertise, and networks has intensified. 📉 More recently, the 2021 funding peak, driven by pandemic digital transformation, low interest rates, and heightened tech interest, has given way to a tighter market from 2022 to the present. Economic pressures and market corrections meant that many valuations set in 2021 did not hold up, resulting in promising startups raising flat or down rounds. Consequently, startups have had to tighten their belts and focus on unit economics. While capital remains abundant compared to historic levels, particularly in sectors like AI, funds and platform teams must also remain focused and resource-efficient. 🔎 In this landscape, money alone doesn’t set a fund apart. As one anonymous LP noted in a recent Carta article, it’s “a prerequisite for us to understand how managers provide something other than just capital...How can they win aside from paying the highest price?” In a tougher market, LPs look for fund managers with “credibility from having lived in the trenches”—those who can prove their unique worth. 💡 Mountside Ventures’ Emerging VC Manager Programme—“Europe's first”—highlights this dynamic. While many programmes exist for founders, there is little support for emerging VCs navigating the competitive fundraising landscape. This drives home the rationale for platform teams to offer valuable relationships, practical resources, and support that help VCs stand out and succeed. 🤨 What signals have you observed that support or contradict these evolving dynamics? ⬇️ #30DaysOfPlatform #VC #VentureCapital #Venture #CVC #Platform

5

2 Comments

"Platform" in VCs often feels undefined, and different at every firm. But one thing is clear: firms with dedicated platform teams are seeing higher investment returns. What is 'Platform' in VC? Think of it as a support engine for portfolio companies. Platform teams accelerate growth by providing: 1) Strategy & Growth 2) Talent Partner 3) Marketing & Brand Partner 4) Business Development & Partnerships Lead 5) Community Manager 6) Operations & Scaling Partner 7) Fundraising & Capital Advisor Platform in Venture Studios vs. VC Funds: The big difference? Timeframe. Venture Studio Platform: Involved from concept to exit, guiding startups from the very first spark of an idea. VC Platform: Steps in after the startup is funded, focusing on scaling and growth but not the initial concept phase. Both play critical roles—but understanding these distinctions helps founders and investors make the most of their platform relationships.

21

6 Comments

📝 FOUNDER fundraising hack = write an investment memo for VCs (template linked below). Raising VC is a multi-step sales process. First you need to convince a single partner to invest, and then that partner needs to bring your deal to Investment Committee (IC) to convince the other partners. The initial VC partner (aka deal champion) will write an investment memo to convince the other partners to vote for your deal during IC. If a VC will write their own memo, why write one for them? Three reasons: 1. Control the frame = dictate how your story is told 2. Signal insider status = show you understand how VCs think 3. Reduce friction to $$$ = VCs will copy/paste from your memo to theirs 😂 🪟 Control the frame There are good ways and bad ways to frame your startup. It's possible that a well-meaning VC will write a memo that frames your startup in sub-optimal ways. The less experience and domain knowledge a VC has, the higher the risk. You want to arm your deal champion with ammo to tell a bullet-proof investment story. Don't leave this up to chance. Write a memo and share it with the VC to make sure they hit the right talking points in their own memo. 🥼 Signal insider status I love when founders provide a written memo alongside the usual pitch deck and financial model. It shows they're clued in to the game. They understand how VC firms work. They're an insider. VCs want to invest in insiders, because insiders are more likely to raise subsequent financing and get to an exit. Outsiders are learning how the game works for the first time and will make rookie mistakes on the VC's dollar. Don't be an outsider. 💵 Reduce friction to $$$ You know how great product companies obsessively reduce the # of clicks a customer needs to make before paying for the product? Speed matters. A 2006 Amazon study found that every 100ms in added page load time cost them 1% in sales. VC is no different. The faster you can make the diligence process, the more likely you'll be able to raise capital. Your fundraising collateral is your product, and a memo is a key way to reduce time to funding (TTF). Every VC will have a set of questions during diligence. Answer them up front in a memo, and watch your prospective investors eyes light up. Deals can be a grueling process involving several late/all-nighters, so the deal team will be thankful if you save them work and make their lives easier. Here is a link to the investment memo template I use. Feel free to repurpose for your own needs: https://lnkd.in/ekGBjGWs

171

22 Comments

Startup decks vs Business plans. It's accepted that a startup needs a deck. Dax Dasilva of Lightspeed Commerce made an important point on 20VC. Writing a business plan - including financial projections - is an important step. It requires discipline. It provides a rigorous framework for thinking deeply about the problem you're trying to solve. Harry Stebbings countered that he doesn't even want to see a deck since it's all dreams. We spent a lot of time and energy on our business plan with the expectation that we would show it to no one ever. The business plan was part of our roadmap for the company. We researched customers - including having 50+ conversations. We wanted to understand them: their background, their interests, their presence on social media. We also wanted to understand how they were evaluated by leadership and how integrated they were with the business of the company they were protecting. We researched pricing both with potential customers and other products in our industry to find out if OpEx or CapEx was a better fit. How did they buy today? How would they like to buy? We did market research to understand the verticals and map the right entry point - we were wrong but that doesn't reduce the value of the research. We looked at competitors in depth to understand what they were seeing that we weren't. Dax is right. This is an invaluable document that should be updated every year - the company is changing, the market is changing, there's more feedback about price and ICP. It's not for sharing with the outside world. It's a map for driving forward. Decks won't get you investment - VCs invest in people. We make decks but we know they don't tell our story. The deck is a calling card. Dax and Harry are both right. https://lnkd.in/e25M82xY

15

1 Comment

"If we’re measuring velocity in days or weeks, it might seem obvious to directly tie a startup’s velocity to the number of hours you work each day. But startup velocity is far more than just hours worked (a nuance that many adherents to startup “hustle” culture get wrong). Velocity is not only about how hard you work, it’s about how you work. At a fundamental level, startup velocity is a measure of a company’s sense of urgency." https://lnkd.in/gV9Z_ift

9

4 Comments

Most people don’t know that when a practical SaaS company raises money from a growth equity investor or private equity investor, those dollars mostly go to the founders. It’s not risky rocket fuel for the business like the VC funding game. It’s mostly money off the table—a partial exit prize—for the savvy founders who created fuel-efficient businesses with steady growth. This practical world of growing and funding unsexy B2B SaaS companies is where most of the action is in the software business right now. It’s also where founders are winning more overall. These founders created valuable companies, and they kept their option to sell all or part of the business when it made sense to them. Growth equity investors play a huge role in helping successful SaaS founders take money off the table and keep growing their practical software businesses. In this week’s podcast, I discussed the world of growth equity investment with Philip Dur, a 20-year investor veteran and managing partner of PeakSpan Capital. PeakSpan Capital is a growth equity investment firm that works with bootstrapped SaaS founders who are scaling up to become sizable market leaders. Phil has been funding capital-efficient software founders for over 20 years and has served on 40 boards with those companies. Phil explains that the growth equity approach is almost the opposite of the VC investment game. For starters, Phil works with founders who want to keep growing their business but still retain the option to sell all or part of it at practical points along the way. Founders can’t do that when they take on big VC funding. In the venture world, it’s go big or go home, but it’s the opposite with growth equity partners. As Phil describes it: “I recommend every founder do some honest reflection and ask yourself, what is really the first exit value where I might want to transact and sell all or a part of my business? “If you raised or want to raise outside capital, make sure that your investment partners are making interesting returns at that outcome so you can make it happen if there's a great place for you to pursue liquidity. “Alignment and optionality are two unsung heroes that are hugely beneficial to bootstrapped and capital-efficient founders. Growth equity aligns with that. "You have the option to raise outside capital or not and the ability to sell all or part of your business at the right time. Alignment with your founders and any practical investment partners is required to be able to do that. "I think every time you raise, you should take secondary and take a little bit off the table." VCs and VC-funded founders don’t try to keep their optionality. That’s just one way that growth equity is different than venture funding. Phil describes more ways that growth equity can be practical and useful on the Practical Founders Podcast this week. Listen to this podcast here. https://lnkd.in/giawRYuS #practicalfounders

138

24 Comments

1% of VC backed startups will make it past $100M ARR But does that make the other 99% a failure? Let’s dig in to the numbers… I was fortunate to have Chris Tottman introduce me to Stephen Millard who analyzed 117K startups founded between 2005 and 2022 → Of those 117K startups founded → 31% (37K) were VC backed → 12% (13K) raised $3M+ Of those 13K startups, 1.8% (243) either made it past $100M ARR and/or achieved a $1B+ exit → 0.5% (71) had a $1B+ exit without reaching $100M ARR → 1.2% (168) made it past $100M ARR → 109 of the 168 did it <10 years I was excited to talk to Stephen because he shares my deep belief… 💡 Every company is a snowflake, but we should be able to identify the key operating markers of (capital efficient) venture scale growth to give startups a better roadmap and increase the probability of success Okay... Let’s talk about the two elephants in the room 🐘 Why do VCs care about $100M if only 1% make it there? 🐘 Does that make the other 99% a failure? -------- 🐘 Why do VCs care about $1M to $100M in 7 to 10 years? Because venture capital is a power law game They understand that a VERY small % of companies will make it to $100M and they’re job is to figure out which ones have a better chance of getting there So that’s the lens they look through Now… Because there’s a lot of future risk with every startup, betting on anything less than a *potential* to reach $100M would put a glass ceiling on their fund that goes against their power law objectives Series A is the inflection point of the venture scale curve and where VCs are trying to build conviction on a startups *potential* to reach $100M -------- 🐘 But does that make the other 99% a failure? Absolutely not ❌ I like how Stephen phrased it: many companies have great outcomes at smaller revenues, especially if they have not raised too much capital and / or strike a balance between growth and profitability And this has become my life’s work… → I don’t believe venture is a $100M or bust binary game But we need clearer milestones to truly understand where we are in the journey that we can check ourselves against every month/quarter/year so we can continually make better informed decision on a go-forward basis The chances of becoming a pro athlete is <1% in any given field But that doesn’t mean we tell kids not to dream of the big leagues? Of course not... But it does mean we need to help them re-evaluate their chances of making it every month/quarter/year -------- Okay, so where can you start? Focus on unlocking milestones and keep your cap table as light as possible until you're ready for step 3️⃣ 1️⃣ Problem Solution Fit 2️⃣ Go to Market Fit - unlocks Series A 3️⃣ Scale PMF #1 - Series A use of funds 4️⃣ Scale PMF #2 -- ♻️ Repost to help a founder in your network Click 'visit my website' at the top of this post to register for my Seed to Series A session

290

73 Comments

There is a never-ending discussion about whether to bootstrap or get Venture capital. Check out the chart. This eye-opening chart reveals that bootstrapped startups have a more consistent path to $1M ARR than their VC-backed counterparts. Top VC-backed companies sprint to $1M in just 20 months But median bootstrappers hit the same milestone in 41 months Bottom quartile bootstrappers are slow but relentless, reaching $1M in 63 months. Bootstrappers show remarkably linear growth across all quartiles. VC rocket fuel isn't always the answer. Sometimes, steady organic growth builds a more resilient business. What's your take? 🤔 #StartupGrowth #Bootstrapping #VCFunding #SaaS

20

2 Comments

As a General Partner investing institutional venture funds in B2B SaaS at seed stage since the year 2000, I saw a lot of cycles: the "dotcom" crash (started April 2000, bottomed out October 2003), the financial crisis (started August/Sept 2008, bottomed out 2011) and the "mother-of-all-over-hyped-valuation" era that ended in late 2021. Today, we are still seeing 75%-90% markdowns on Unicorns like Carta or worse, shutdown of Unicorns like Olive AI (from $4 billion valuation to ZERO$, $800 million raised--and apparently wasted...). Many more to come just like those. All those great reported returns for venture funds from that era's wild markups? The venture funds are marked down right along with their portfolio companies. Easy come, easy go. I feel very fortunate that Valor VC's first institutional venture fund was invested after that "vastly-over-hyped" period that culminated in 2021. Valor's new fund, Valor Fund 3, is vintage 2024. The valuations for seed stage companies? They have entrepreneurs recalling wistfully 2021. Today, seed stage investors are "licking their chops!". Vintage 2024 should be a record returns vintage year! There are so many VCs licking their wounds from 2021’s peak to today’s trough, there are many not investing in new deals at all, and, for nearly 30% of all VCs, they will not raise another new fund, ever. It is GRRRRRRREAT! time to be investing in B2B SaaS at seed! This next era, AI/ML, is literally the most profound technological revolution in history. It is happening when, at the same time, seed stage is completely rational in its valuation in a way I have never seen it before. Great founders, doing great things and scaling rapidly with rational valuations, rational capital consumption/burn and very clear paths to profitability! I couldn't ask for more! PS Yes, Generative AI is wildly over-hyped and over-valued. However, applied AI in B2B SaaS? It is way undervalued given the triple-digit growth rates of so many applied AI investments in Valor's portfolios!

22

3 Comments

Founder-Turned-VC Investor Raised $150 Million for Her New Fund💰 Masha Bucher, ex-entrepreneur and founder of Day One Ventures, has raised $150M for her new VC fund. Founded in 2018, Day One Ventures focuses on early-stage startups, offering initial investments ranging from $1M to $2M. Notable companies in the firm’s portfolio include Worldcoin, legal services company DoNotPay Inc., and AI assistant You.com. 📝Diverse Investments and Real-World Impact Day One Ventures supports startups across various industries, with Bucher particularly drawn to founders tackling real-world challenges. “From profound wealth disparities to the urgent threat of climate change and the growing sense of social isolation, tech founders will be our lifeline toward a more abundant, diverse, and sustainable future,” Bucher stated regarding the new fund. 🏆The firm’s track record is impressive, with six of its investments achieving billion-dollar valuations and 22 companies either being sold or going public. This success highlights Day One's knack for identifying high-potential startups. 🎯PR Expertise and Strategic Growth Before transitioning to VC, Bucher founded a PR firm that managed communications for numerous tech companies. She has leveraged her PR expertise to coach startups on media strategies. “If you look at any business problem you want to solve and any business goal you want to solve, 90% of the business problems are communications problems,” Bucher explained on Bloomberg Television. “I think this is something we train founders on and something that we help them to do.” 📈Growth of Day One Ventures The new fund is Day One’s third and largest to date. Fund I, closed in 2019, was nearly $20 million, while the second fund in 2020 totaled $52.5 million. This latest fundraising effort saw contributions from US and European institutional LPs, as well as 14 of Bucher’s own portfolio company founders.💰 “When you are building a firm with value add and staying close to founders, you can attract a lot of capital from your own network,” Bucher said. Notably, she made a concerted effort to include female investors, securing backing from 9 female LPs. Significant in the male-dominated VC industry, where female founders received just 2% of the total capital invested in US startups in 2023, according to PitchBook.🤷‍♀️ 🤝New Investments and Future Focus Day One has already made 5 investments from its Fund III: Cradle, an AI startup focused on human longevity; Rainmaker, a Los Angeles-based company working on cloud-seeding technology; Affiniti; Astroforge; and Layer N.  🚀🌍 ✅ Looking to raise capital for your #VCfund and increase the international pool of your LPs?   🤝 Need warm #LP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments (Series A/Series B)?   ▶ G+QUANT's link for inquiries and fund decks: https://lnkd.in/gjC_EuTE #VentureCapital #TechInvesting #FemaleFounders #StartupFunding #Innovation

63

3 Comments

If you're a VC struggling to hit your first or second close, you’re likely making these mistakes—and you might not like hearing them... 👉 1️⃣ You’re not truly differentiated. Most funds pitch the same thing: “Great network, proprietary deal flow, early wins.” LPs hear this all the time. What they actually want is a clear reason why YOUR fund stands out—𝐚𝐧𝐝 𝐡𝐨𝐰 𝐢𝐭 𝐝𝐫𝐢𝐯𝐞𝐬 𝐑𝐎𝐈 𝐚𝐧𝐝 𝐥𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐛𝐞𝐭𝐭𝐞𝐫 𝐭𝐡𝐚𝐧 𝐚𝐧𝐲𝐨𝐧𝐞 𝐞𝐥𝐬𝐞. 2️⃣ You’re not answering the right question. LPs don’t care about themes or buzzwords. They’re asking: 𝐖𝐡𝐲 𝐛𝐞𝐭 𝐨𝐧 𝐲𝐨𝐮 𝐯𝐞𝐫𝐬𝐮𝐬 𝐭𝐡𝐞 𝐝𝐨𝐳𝐞𝐧𝐬 𝐨𝐟 𝐨𝐭𝐡𝐞𝐫 𝐟𝐮𝐧𝐝𝐬 𝐡𝐢𝐭𝐭𝐢𝐧𝐠 𝐭𝐡𝐞𝐢𝐫 𝐢𝐧𝐛𝐨𝐱? Make it easy for them to see why your strategy 𝐝𝐞𝐥𝐢𝐯𝐞𝐫𝐬 𝐫𝐞𝐭𝐮𝐫𝐧𝐬. 3️⃣ You lack urgency. Fundraising isn't about randomly reaching out and hoping things stick. It’s about a coordinated playbook that engages the 𝐑𝐈𝐆𝐇𝐓 𝐋𝐏𝐬 at the 𝐑𝐈𝐆𝐇𝐓 𝐭𝐢𝐦𝐞—with the 𝐑𝐈𝐆𝐇𝐓 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥𝐬. I've helped fund managers with strategies that lead to faster closes by rethinking their approach entirely. If you’re gearing up for your next close or feel stuck, DM me—I can help you avoid these pitfalls and 𝐬𝐡𝐨𝐰 𝐲𝐨𝐮 𝐞𝐱𝐚𝐜𝐭𝐥𝐲 𝐰𝐡𝐚𝐭 𝐋𝐏𝐬 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐜𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐭𝐥𝐲 𝐢𝐧𝐯𝐞𝐬𝐭 𝐢𝐧 𝐲𝐨𝐮𝐫 𝐟𝐮𝐧𝐝. #VC #EmergingManagers #FundraisingStrategy #LP

26

1 Comment

Serious SaaS startup founders are starting to see how pursuing big VC funding too early will decrease their odds of success. Like buying a lottery ticket for a bigger Powerball prize, the odds go down the more money you raise early in your venture. This is not what the startup tech advisors, service providers, and tech media have been and are still telling us. But the world has changed for SaaS founders in the last ten years. The old recommendation that "the best founders raise VC funding, it's just what you do" keeps going despite the reality and facts. The longer you can go without raising any outside funding or big VC funding, the better your odds of success are as a SaaS founder. Here's why: 1️. Time and Effort Founders in the US can spend up to 50% of their time for 12-18 months learning the funding game, building their network, and trying to raise money. In many cases, for B2B SaaS, they could have generated that much revenue with the same amount of time and effort. And $1M in revenue is worth much more to founders than $1M in funding. Revenue funds your business too, but it keeps on recurring. Funders are looking for startups with efficient revenue growth anyway, so just do that first. 2. Slow is Fast Inviting VCs turns your business into a pro game with serious obligations, important terms, and additional pressures. I've played that game and I dealt with the pressure of working six days a week for 20+ years. But you don't have to push your business that fast and bet it all in the modern B2B SaaS game, in most cases. You can work much smarter by taking a slower approach to achieve better founder-equity-value results without VC funding. I know practical SaaS founders with businesses that are growing by over 50% and are very profitable--and the founders don't work all day. 3️. Better Risk-Adjusted Odds When you raise $5 million and value your company at $25 million, you're agreeing to aim for a half-billion to a billion-dollar exit, which is not realistic for 90%+ of software businesses. It sounds counterintuitive, but it's true. It's hard to get up and running as a bootstrapper at first, but once you do, it's a much better game for founders, customers, and employees. I call them Practical Founders. It's the hidden majority of software companies in the world. They have much better odds of winning this crazy game in the end and doing it their way as they go. VC funding isn't bad or wrong. There is still a place for rocket-ride startups to take it, go for it, and bet it all to go big. But big funding is still overprescribed by funders and misunderstood by most new software founders. PS. This video is a clip from a podcast I did with Finn Thormeier last month. Here is the full episode of the @Founder-Led Marketing Show. - Youtube: https://lnkd.in/gjzRDJ6d  - Spotify: https://lnkd.in/gnCcUztS #practicalfounders

260

63 Comments

If you expect to include VC platform professionals as a part of your VC GTM, you should ask yourself these questions. 1️⃣ Where does the firm focus? This may sound obvious, but at the very least you must be thinking about stage and geo of the firm before engaging. Ideally, you will have also vetted the portfolio for your ICP. 2️⃣ What is the team structure? A two-partner firm with an Associate who supports the portfolio is very different from 25-person team with a Platform team lead and 2-4 direct reports, not to mention the larger teams of 100+. As always, a well-managed team of any size will be more preferable to work with than a platform lead or team who doesn’t have much internal influence. 3️⃣ Does the firm offer support to its portcos that aligns with your product? “VC Platform” encompasses several disciplines: community, talent, bizdev, marketing, and investor relations. Be careful not to make assumptions, especially if someone has a more general title (e.g. “Platform Manager”). Oftentimes, firms will show some intent re: differentiation in their marketing, which can give you a general idea. 4️⃣ Is there a partner who is only focused on platform? Some firms with several years of platform under their belt are elevating their veterans to partner. This is a value-add choice on the part of the firm that is intended to signal to potential investments but can also signal to you that there’s someone to truly level with on the other side. 5️⃣ What goals does the platform lead or team have this quarter? This year? Firms are idiosyncratic and on their own respective trajectories, so you need to ask this directly. If you assume it’s something general like “portfolio growth” or “making intros” you’re missing out. A great platform lead and team is worth their weight in gold. But even the best team won’t be smart for you to work with if there’s not broader alignment. I suggest focusing on what seems like a high-potential corner of the market for you and building out from there. #vc #vcplatform #saas #fintech #gtm #partnershipleaders

3

1 Comment

The $500 Billion Opportunity to Disrupt Enterprise Software... 🚀 "Tell us what enterprise software you use, and my team will build you an 80% feature-complete version at a 90% discount." When Chamath Palihapitiya announced his new incubator, 8090, he didn't just launch another venture—he cracked open a massive opportunity for entrepreneurs. 💡 The enterprise software industry is worth half a trillion dollars, and it’s been ripe for disruption. With AI and offshoring, the door is now wide open for scrappy startups to build "good enough" software that solves the same problems as the big players—but at a fraction of the cost. This is how David beats Goliath. For founders who are ready to take the plunge, this is a game-changer. No need for expensive R&D, massive teams, or venture capital funding that burns your equity. All you need is a vision, and the tools are already in place. We’ve seen this pattern before—when technology and timing align, massive industries get reshaped. The time is now for entrepreneurs to rethink enterprise software and grab market share. ⚡ Are you ready to disrupt the status quo? What software would YOU improve and offer at a fraction of the cost? Let’s start a conversation! 💬 #entrepreneurship #innovation #startups

6

1 Comment