William Ross

💡Benchmarks in the investment industry serve as a standard for measuring the performance of securities, mutual funds, or investment managers. They provide a reference point for analyzing allocation, risk, and return of a portfolio, enabling investors to make informed decisions. Thanks Peter Walker for keeping us all informed!! Can’t wait for this!! Follow and get on the waitlist for this one! #benchmarks #fundraising #Capitalraise #founders #womenshealth #femhealth #medtech #wellness

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Hot take on a lot of early-stage digital health companies out there: You're not a tech company. Most tech-enabled care companies I've seen over the past two years are only tech-enabled in the sense that they use telehealth as their delivery mechanism for care. There are exceptions to this, of course - companies who build computer vision and applied AI tools to better the doctor-patient experience, companies who build tooling around risk scoring and stratification to enable more personalized medicine, companies who build truly novel intakes to better route patients to the appropriate care, etc. These companies have real technology chops and, if they sell it right to the market, can get credit for this from investors. But if you're truly a telehealth provider, you need to realize now that the goal post has shifted dramatically from 2021 and you're going to be valued at maturity at something like 3x EBITDA. That's profit. Not revenue. Throw a revenue multiple out the window. That's not the world we live in if you're a virtual doctor's office. Think of how that impacts venture math. If you're raising a seed round at $15M post-money (or $12M pre-money), it means you'll have to generate something like $150-200M in annual EBITDA to be a fund returner for your seed investors. Maybe even more with dilution, since telehealth businesses are not traditionally capital efficient and will likely need to raise material additional capital to reach that scale. You need to be ridiculously profitable (probably on $800M-$1B in annual revenue since you're likely going to be a 40% gross margin business). Here's the good news: you can set yourself up well (and probably be a contrarian founder relative to your peers), by talking about EBITDA growth and how you can grow into a fund-returning outcome based on realistic mature market comps. This will stand out for the investors you're pitching, even at the early stage. This is how you can beat the malaise of the tech-enabled care market. Focus on the right metrics and the right type of growth. You don't have to have all the answers (no founder does), but you need to make sure the ship is headed in the right direction. A focus on profitability for "tech-enabled care" (*ahem* telehealth) businesses is a good first step.

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One of the things we see quite often at Grit Capital Partners, is a newly minted CEO. We see a big difference in the transition to CEO based upon the historical lane the CEO is coming from. There are different new muscles if you are coming from Product, Engineering, Finance, etc. In this article, we go deep on the CRO to CEO transition, which includes some thoughts from Rosie O'Meara, a particularly fine example of someone who has made the transition quite well. What were your biggest transition moments? https://lnkd.in/eEB-K2ZU

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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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Key takeaways from VC Goat - Vinod Khosla podcast. - The firm cares more about working on interesting problems with large technical solutions rather than just maximizing IRR. The team is there because they believe in the mission. - Khosla assumes they've lost the money the day they invest, and then maximizes for the upside opportunity. He calls it "option value investing" rather than IRR investing. - Khosla has contrarian bets in AI (neuro-symbolic computing, probabilistic approaches), biotech, robotics, crypto, and more. - He believes aviation fuels, fusion energy, new transit systems, and other contrarian areas ignored by most investors will be huge opportunities. - Most large innovations come from outsiders, not industry insiders. Khosla looks for founders who can learn a business rapidly rather than have deep domain expertise. The Future Impact of AI - AI will be deflationary and increase productivity growth to 4% annually vs the typical 2% forecast. This will cause great abundance but also increasing income inequality. - Bipedal robots will take over most manufacturing and manual labor jobs within 20-25 years. This will free humans to be more creative and pursue their passions. - Education will shift from job training to creativity. Uniquely human elements like taste and curation will be most valued in an AI-enabled world. https://lnkd.in/gqBsmbks

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As we dive into 2024, the Series A fundraising landscape is becoming increasingly daunting. Investment standards are soaring, and fewer startups are making the cut. Series A investors are finding many seed stage companies too premature. The median valuation jump from seed to Series A skyrocketed from $19.5 million in Q1 2022 to $28.7 million in Q1 2024. Investors now demand stronger revenue performance, targeting $2 million to $3 million in ARR, up from $1 million to $2 million. Alarmingly, only 12% of Q1 2022 seed startups secured Series A funding within two years, down from 31.8% in Q1 2020. #venture #earlystage #seedtoseriesa #seed #seriesa #inspireglobalventures https://lnkd.in/gW4bkcNy

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Nice overview of how we're using data to inform how we invest in early-stage founders. We'll be announcing more this summer but we're seeing some really interesting early data. https://lnkd.in/exU_Juf5

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AI memory is fundamental for conversational AI and AI agents. It is critical for building personalized experiences and improving reasoning. Check out Letta’s course to understand how to use AI memory to enhance the customization and quality of your AI app.

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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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🔥 🔥 🙌 🙌 🎆 🎆 I'm *fired up* to share this. #VentureIQ by the 9point8 Collective is officially live. We've heard from investors of every size and type that it takes too long and costs too much to evaluate deal flow; this limits the scale and speed at which these capital allocators can operate. To address this problem, we've created an innovative solution which delivers high fidelity diligence information near instantaneously. From a time and cost perspective, VentureIQ immediately creates leverage to look at more deals - and creates space to focus deeply on the most meaningful opportunities. To learn more, you can reach out to me directly or visit VentureIQ.ai. I'll close with some thoughts on my team, to whom I'm so grateful. Blair Merlino, Neal Ghosh and Evan Allen don't just talk about interesting concepts, point out problems or pontificate on what could be. Instead, they identify a problem, frame and validate the solution, and do the work to bring it to reality. VentureIQ is the best example I've seen of this, to date. #VentureCapital, #FamilyOffice, #PrivateEquity #CorporateDevelopment #Startups

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I recently had the honor of being featured on The Deal Scout. In this insightful 7-minute interview with Joshua Wilson, I shared early secrets and best practices from 35+ years in the Venture Capital industry that are essential to navigating the VC landscape and establishing a foothold in this dynamic field. You can listen to the interview on Joshua Wilson's post here 👇 #GPN #GuyPaulNohra #VentureCapital #Entrepreneur #Leadership #Philanthropy

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On the latest Vital Signs, Nikhil Krishnan and I had a ton of fun chatting with Dr. Atul Butte. Dr. Butte is a professor at UCSF, Chief Data Scientist of the UC Health System, and a co-founder of numerous healthcare startups. In our conversation, Dr. Butte shared his takes on healthcare AI opportunities, challenges, hype, and more. A few highlights: ⚡LLM use cases, data, and growth LLMs are already helping to solve the “drudgery” aspects of medicine, such as automatically drafting SOAP notes and patient messages. Dr. Butte is excited about future applications of LLMs that can help with the “cognitive” aspects: with difficult medical problems an LLM might be able to stitch together disparate pieces of information to generate a potentially novel solution. He also highlights that prompt engineering will become the next “coding language” as so much of leveraging LLMs is knowing how to ask them the right questions. Additionally, Dr. Butte discusses how since 2016, UCSF has been working to deidentify its patient notes so that it can query them to answer clinical questions and ultimately enhance patient care. ⚡The need for patient-facing AI As patients are increasingly able to access their own personal health data in nicely structured formats (e.g., EHRs, wearables), they desperately need more tools to help them interpret and make decisions using that data. Dr. Butte understands that these patient-facing solutions are challenging to get funded but he emphasizes that patients need to receive the benefits of AI sooner. ⚡Evaluating healthcare AI solutions In order to evaluate AI solutions, we often put human specialists – such as medical professionals – on the same tasks. Understanding that specialists often disagree with each other, a significant challenge arises in figuring out how we can evaluate AI considering we can’t just “average” all the specialist opinions. Dr. Butte points out that there still remains a massive gap in AI evaluation tools. Additionally, there are so many organizations that want to have a say in how healthcare AI is regulated that the landscape is uncertain. An awesome conversation with an expert on all things AI meets healthcare. Listen to the full episode below: Spotify: https://spoti.fi/3Wr3643 Apple: https://apple.co/4acwgan

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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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We're launching the inaugural edition of Beyond Benchmarks, a deep dive into the metrics and trends observed across the early-stage enterprise cloud market. This is the first look at some of the business data around GenAI in SaaS. Some initial observations: 1) 60% of SaaS companies have already integrated GenAI into their offerings (60% of these as part of their current product and 40% as a new product), and an additional 20% are planning to do so this year. Almost half aren't monetizing these features. Those that are are primarily experimenting with both usage-based and flat fee pricing models. 2) Most companies are utilizing OpenAI as their primary LLM, but many are experimenting with multiple models - and we are noticing an early trend towards intelligently routing GenAI inference requests to different models based on cost, performance, and security. 3) Though we are in the initial innings of GenAI, we are seeing some positive signals - companies that implemented GenAI had 7% higher NDR than those that did not. Still early days, but we'll be doing this benchmarking report regularly to track and share how things progress in this new era. Link to report in comments.

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The question "What makes a successful founder?" is our VC equivalent of asking, "What is the meaning of life?" Both are equally elusive. If there were a simple checklist to predict success, life would be straightforward (though far less exciting). The reality is that there's no one-size-fits-all founder. Throughout my career, I've encountered founders at opposite ends of the spectrum. Some are technical wizards who have created products that address real needs but would struggle to sell in a room full of their ideal customers. Others might not grasp every technical challenge their product faces but could sell ice to an Eskimo and have the charisma to rally any army. So, which type is ideal? I've learned not to judge founders solely on their strengths. Instead, I ask whether those strengths align with the industry they're entering. There's no definitive checklist that guarantees success. What truly makes a great founder is how their unique attributes empower them to seize the business opportunity they're pursuing. ===== 🎙 Listen to my full episode of Fintech Leaders with good friend Miguel Armaza for more on data as the new gold, secrets behind successful VCs, and the importance of founder-market fit at the link in comments.

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So many burnt out founders. But also: So many surplus elites. And also: A new paradigm for low-risk idea-stage innovation in founder/startup/community/vc formation. That's Slyk IO We level up together: https://lnkd.in/grEmV-R6

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Alexandr Wang is exceptional at understanding where technology is going and launching into areas with conviction - it’s clear in this conversation with my partner, Mike Volpi, that it’s core to Scale AI ‘s success. AI is moving incredibly fast, but Alex & the Scale team have a clear sense of what’s next without compromising safety. https://lnkd.in/e2HgQyXT

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Dan Primack had some pointed criticism for #VC yesterday in his Axios Pro Rata newsletter (a daily must read IMO 😤). In short, the model doesn't work if it can't produce exits for LPs. Don't blame public markets (which are at all-time highs) for the lack of liquidity either. 📈 💸 Instead, this is a "liquidity drought of your making" where "...swinging for the fences on every pitch, rather than taking the single or double that's available" is the only way out when you invest at "sky high valuations." 😰 "A whopping 37% of "unicorns" are being held for at least nine years by VC funds, including 13% that are past the 12-year mark." 😳 ⌛ Is he right? Is VC at a dire inflection point? Or is Primack prematurely hitting the panic button? 🚨 https://lnkd.in/dts92pXr

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