Turner Novak

A reminder to those looking to break into VC: 𝗧𝗵𝗲𝗿𝗲 𝗮𝗿𝗲 𝗰𝗿𝗶𝘁𝗶𝗰𝗮𝗹 𝗿𝗼𝗹𝗲𝘀 𝗮𝘁 𝗩𝗖 𝗳𝗶𝗿𝗺𝘀 𝘁𝗵𝗮𝘁 𝗮𝗿𝗲 𝗡𝗢𝗧 𝗶𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝗿𝗼𝗹𝗲𝘀. They span all things portfolio company support and internal firm building. VC isn't closed off to those just in finance. Are you interested in platform? Let me know!👇 If I see there's high demand, I'll try to cater more content to demystify that area of VC.

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You don't have to "Think out of the box" 📦 You can just “Flip the box” 🔃 Inverted companies grow exponentially. Most out there follow a regular structure. In a top-down approach. If you’re already an established entity, This is NOT easy to implement. But it might be worth it. Culture will improve. Processes optimized. Efficiency amplified. Take a look for yourself at how this works ⬇️

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Want to stand out in a VC screening call? Ask thoughtful questions. Why it matters: 1. Shows you've done your research 2. Demonstrates genuine interest 3. Helps you understand if they're a good fit Go beyond "What's your check size?" Get specific to that fund and even the person you’re talking to. Remember, it's not just about us evaluating you - you're evaluating us too. What's the best question you've asked (or been asked) in a VC meeting?

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Everyone's talking about PE and VC. But do you really know the difference? Here's the truth: They're both about investing in companies. But that's where the similarities end. Let's break it down: 1. What they actually do: PE: Buys established companies VC: Funds early-stage startups 2. Risk appetite: PE: "Let's make this good company great." VC: "This could be the next unicorn... or total bust." 3. Ownership mindset: PE: "We're taking the wheel." VC: "We're along for the ride." 4. Investment size: PE: Dropping $100M+ like it's nothing VC: Starting small, maybe $1M-$10M 5. Return timeline: PE: "See you in 3-7 years." VC: "Talk to you in a decade... maybe." 6. Exit strategy: PE: IPO, sell, or reshuffle the deck VC: IPO or get bought out 7. Day-to-day involvement: PE: "We're basically running this place." VC: "Call us if you need advice." 8. Industry focus: PE: "We'll buy anything that makes money." VC: "Tech, innovation, disruption. That's our jam." Here's the kicker: PE is like buying a fixer-upper house. VC is like betting on a racehorse. Both can make you rich. Both can lose it all. But remember: PE plays it (slightly) safer. VC swings for the fences. Which would you choose? P.S. Next time someone confuses PE and VC, send them this. You're welcome. 😉 P.P.S Check out my Newsletter for Founders to Raise Capital and Grow Revenues Here: https://lnkd.in/ejecDs9Z #BrainDumps | BrainDump #97

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Got another call from a dear friend at a giant venture firm asking us to get a CEO business going, stat. Turns out a LOT of Founders are burning out, backed into a corner having done stupid valuations they can't live up to, finally running out of cash, no plan. So the mortality rate is growing really, alarmingly fast. As if the VC ecosystem needed more headaches. Brace for a lot more, people. Here's the problem w CEO recruiting. You can't have Greg Schott. GET OVER IT. Build a thesis on the core skills you need and commit to a spec that defines a killer first time CEO or you're gonna look for a year and settle and everyone will hate each other at the end of a miserable process, regardless of who your recruiter is. VC's keep complaining about the lack of CEO recruiters and sure, maybe for good reason. But I don't think it's their fault that CEO hiring is broken. When VC Boards stop naval gazing about whether they can get that one celebrity CEO to turn their broken startup around or get it over the hump, accept that a first timer is the only path, etc., then the processes will be much faster and smoother than they are today. Sure, there are rare exceptions but exceptions don't equal a thesis and without a thesis, you're groping around in the dark on any task. So get a thesis together and go hunt. Simple. Take Dan Rogers as an example. Here is a first time CEO who has completely re-tooled a leadership team in under a year, a complete savage at hiring, etc. Stats don't lie. First timers (mostly Founders) generate the best outcomes. I showed Dave, the CEO of Hashi who sold it for 6.4B to IBM, to a bunch of VC's back in my CEO recruiting days. First timer so they didn't grab him. Smart people took a bet on him. VOILA. Schott was a first timer before MULE. Muglia from SNOW. Zach from Netsuite, showed him to a bunch of clueless VC's too and look what happened. SIGH. I love VC's but man. Amazing how such a bunch of smart people can do stupid shit repeatedly. To me, that's the definition of insanity.

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21 Ways to Kill Your Company Day 9: Poor Fundraising Strategy This means two things - be realistic about the benchmarks you need to unlock your next raise and then raise enough money to hit those milestones. Be great (and realistic) with financial planning. Don't forget those extra five months you typically need to raise. #21waystokillyourcompany #fundraising #venturecapital

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Investors and Seasoned Entrepreneurs: what would you say are the 3 most important things a founder must have or know in order to go from idea to launch successfully? I am testing my own hypotheses about early stage success, but very curious for other thoughts - ESPECIALLY if you think these things are different for Black founders versus other founders.

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I have this rule where if I see/hear the same thing 3x in 1 week (ex. hear someone's name 3x, hear operators at diff co's are facing the same problem 3x, hear the same hot take 3x, etc)... then I carve out 3+ hrs & dive deep You have to notice repetition & action on it

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The best founders can turn off emotions when making complex decisions. If you can hone this skill, you should.

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SECURE 2.0 created tax credits to incentivize small businesses to offer retirement plans, but they just don't work for non-profits. 10% of the American workforce are employed by a non-profit. 90% of non-profits would qualify for the tax credits. But, since non-profits don't pay income tax, they end up being the incentive that doesn't incentivize. There's a new bill up for consideration that would essentially allow non-profits to take advantage of the credits, but apply them to payroll taxes rather than income taxes. It's a simple solution that would likely help many millions more workers have a good way to prepare for retirement. More than 80% of Americans seem to approve of the move. Including me. #taxes #401k #retirementplans #retirementplanning #nonprofit #charity John Sullivan https://lnkd.in/gzXCT8XK

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PSA: If you run a startup or growth-oriented SMB, I want to build you a 13 week cash forecast for f͟r͟e͟e͟. Seriously, no obligation to engage Margin whatsoever. I talk all the time about how insanely valuable a 13 week cash forecast is for startups and fast-growing SMBs. Now I’m going to put my money where my month is... If you’re the least bit intrigued, DM me or comment below, and we’ll jump on a call to discuss next steps. I can only do this for a handful of people, so reach out ASAP if you’re interested.

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Many investors want to know when profitability will occur. I heard this AGAIN!!!!! What company at a few million in revenue will EVER be close to profitability if investor capital has been taken in which then requires a high return profile????? Investors, have you seen the level of revenue that a brand needs to achieve in order to get acquired? Brands are not getting acquired at $10M Brands are not getting acquired at $20M Brands are not getting acquired at $30M There needs to be enough substance on the top line to get scooped up at a 3x revenue multiple. That AINT happening with the mentality of getting to break even too early. Let’s change the narrative everyone, this is making no sense to me!!!!!! #cpgindustry #investors #pleasestop

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Statistically, solo female founders make up less than 1% of all YC founders. If you get in, congrats—you’re likely the only one in your batch. After looking through 200 YC founders, I found only three were solo female founders. This doesn’t necessarily mean they all applied solo either. That makes it 1.5% of all YC founders. If YC's acceptance rate is 1%, then my chance of being accepted as a solo female founder was merely 0.015%. If I had done my research earlier, I would have never wasted my time applying to Y Combinator. At some point, this made me feel like I wasn't good enough. But now, I am certain of my own worth. I had built two full advanced AI products all by myself without funding: SylphAI: Gaia: The conversation search engine to help funders like me fundraise. Currently private beta. https://sylph.ai/ AdalFlow: The library to build and auto-optimize any LLM task, from chatbots and RAG to agents. The upcoming best library in LLM applications. https://lnkd.in/g-KN9-dV I hope that all funds disclose relevant statistics so founders know what they're up against and can decide if it’s worth their time to apply. Many people advised me to find a male co-founder, suggesting that it would make things much easier. But I won’t choose a co-founder based on gender. I’m taking my time to find the right partner. #startups #yc #femalefounder #artificialintelligence #investors #vc

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That's why it's often very difficult to recognize new leaders – their ideas go beyond the conventional frameworks we're accustomed to. Keep your mind open. Don't let yesterday's templates define your future. #Leadership, #Innovation, #OpenMind, #FutureThinking, #venturethinking,   https://lnkd.in/eASPGsuu

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Day 1 - 21 Days to Kill Your Company: Enabling a Toxic Culture Unfortunately, I've got first-hand experience with this one. Never overlook culture. You have to be intentional about buildiing the culture that is right for your company, from hiring to managing to how you work with all of your stakeholders. Sacrificing culture for speed, revenue, or any other quick wins is a quick way to kill a startup on the rise. #21waystokillyourcompany

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Imagine this: ABC Capital, the top PE firm in the industry who usually writes $30-100m checks, loves what you’re doing and wants to lead your seed round with a $3m check 18 months later, you need $5m more and they tell you it’s “not what we do” This happens more often than you’d think… So what do you do if a big firm wants to “make an exception and go earlier than usual”? We call these “toehold positions” This might seem like a champagne problem, but it’s a problem nonetheless and one we see very often First, why might you say yes? 1. Signal: it will make the rest of your fundraising round easier, because other investors want to co-invest alongside big brand name firms 2. Value Add: bigger firms can typically be more helpful, because they have more resources to support their portfolio 3. Future Financing: bigger firms have more capital to deploy, meaning that future rounds will be easier to pull together All of these sound great in theory, but let’s talk about what could go wrong — usually this plays out if the firm DOES NOT follow on 1. Signal: while the round that they invest in will likely be hot/oversubscribed once they commit, the signal if they choose not to follow on will be VERY bad. Why? In the case above, everybody knows ABC Capital could easily write another $5m into the Company, and assume if they were excited they would. In reality, anything less than $30m is still non-core for ABC Other firms think ABC must know something. Why bet against a tier 1 firm who has more information than you do? 2. Value Add: In many cases, small positions into small companies get lost in the shuffle of big firms. In theory, ABC has the resources to help, but in practice you might not be the internal priority Oftentimes big firms will help just as much (if not more) when they’re trying to win a deal vs support a subscale position 3. Future Financing: Keep in mind that toehold positions are a one-way option — ABC has not committed to following on, but you might have unknowingly committed to them. Why? If their competitors know that ABC is invested, they might not even try to beat them out in the next round They’ll often decide that ABC has better information and a lower cost base, so it’s not worth burning their team’s time Could mean that a deal that was meant to de-risk future financing could actually reduce negotiating leverage against your biggest investor To be clear: these transactions can be SUPER positive and great for the company. They can create inflection points of funding and stack the deck in their favor But we have seen this go very wrong Big firms choosing not to follow on has made fundraising close to impossible for many firms in the past 24 months In tech just look at the case studies of Tiger / D-1 / Coatue The takeaway: if you’re considering allowing a toehold position, go in eyes wide open and don’t underestimate the value of partnering with a firm where you are square in their sweet spot

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Participating Vs Non-Participating Liquidation Preference. This is a topic that a lot of folks don't understand very well, explaining via a simple example below: Assumptions: Investor 1 - Owns 10% of the company for $10 Founders - Own 90% of the company Total share value and price - $100, $1 per share Purchase offer for company - $20 Participating Liq Pref: Investors receive $10, being their investment amount. $20 - $10 leaves $10 to be split. Investors receive a further $1 (10% of $10) Founders receive $10 - $1 = $9 Non-Participating Liq Pref Investors have an option of exercising their preference, receiving $10 OR Investors can convert and receive $ equal to shareholding, 10% of $20 = $2 Investors will choose to receive $10 Founders receive $20 - $10 = $10 This is a base example of how non-participating is significantly more founder friendly, especially for non-exceptional exit outcomes (also the defacto at Artha Group) #venturecapital #startups #founders

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When’s the perfect time to hire? Spoiler: there isn’t one. 🕰️ After speaking with numerous founders and partner VCs recently, I’ve noticed that hiring is a hot topic, again 🙁 In my experience, there are only two scenarios when it comes to hiring: 1. Too early ⏳ 2. Too late 🕒 Hiring too early means spending more money upfront. 💸 Hiring too late means missing out on potential opportunities. 🚀 With 25 years in recruitment and involvement in over 10,000 hires*, here’s my take: 👀⤵️ Generally, the cost of missed opportunities (hiring too late) is higher than the cost of spending money early (hiring too soon). But with AI transforming the workforce, my perspective is shifting. Productivity and collaboration solutions are driving significant changes. Changing the way we work.
 🆘 Founders, if you need help, send me a DM for free advice. *I’ve lost count, so it might be more than 10,000. #founders #investors #changethewaywework #thefutureofworkisnow #firstdegree #aiworkforce #aiproductivity #aicollaboration

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