Jon Youshaei

For YC, A16Z Speedrun, or just because investors said so, founders often scramble to find cofounders, and it’s time this convention is challenged. In reality, investors have created a Catch-22 that makes startups more expensive to build, prone to infighting, and often slower. The only reasons a founder should bring on a cofounder are if they can’t raise the money to hire the right talent for the company's stage, or if they genuinely wanted to start the company with that person from the outset. But because this cofounder dogma has taken hold, founders often end up with an expensive mismatch: two mouths to feed from day one, less equity to attract talent later when the company is in a stronger position, and a cofounder whose utility might quickly diminish. The emotional labor and financial cost remain constant, or the partnership ends in a disruptive breakup. If a founder can raise money and hire for the correct stage, that’s what they should do. More investors should back solo founders to make this possible. These founders will run leaner, hire the right skills when needed, and ultimately move faster.

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What I've seen over the years is, early stage companies rarely grow beyond their founders’ capabilities; or at least, companies model after their founders really closely. If the founder is unfocused, chances are the whole company is unfocused. If the founder is incapable of making decisions, the company is likely to have meetings after meetings without clear conclusions. If the founder doesn’t put in 110% of herself in the company, it’s hard to expect anyone else at the company would. 1/ Having cofounders is advantageous in this regard, because no one is perfect and different cofounders can bring different skill sets and strengths 2/ Founders need to have good mentors 3/ Founders must set aside some time to constantly upgrade themselves and “sharpen the tooth”. 

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Players in the VC world have access to tons of tools like what we're building at They Got Acquired Data. How badly does the lower-to-middle market M&A community want insight on private transactions, bootstrapped company sales, and who's buying? We're about to find out.

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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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I recently sat down with a group of Forum Ventures founders about to go out to fundraise and the topic of SAFE rounds came up. The context focused on the pros/cons of raising a priced vs a SAFE round and the conversation notably shifted toward the dilution implications of a SAFE round. Founders are keenly aware of the top line dilution of any funding round - ie selling 20% of their startup for $3M at a $15M cap - but very few fully grasp the implications of doing a SAFE round vs a priced round. The universal standard for institutional VC investors is a post money SAFE. This document essentially outlines ownership that an investor will have in a startup just prior to the execution of a priced round. Most importantly though, it is structured so that an investor in that SAFE will not be diluted by subsequent SAFE's that are issued. This is where founder education around the implications of this structure are not fully appreciated. In a situation where a founder continues to stack subsequent SAFEs, they don't actually convert until the first priced round and the net dilution they are taking is actually more than they realize. Here is a practical example - take a situation where a founder has already sold 15% of their business on a post money SAFE in a pre-seed round, and is now choosing to sell another 20% in a seed round. If the founder opts to raise this money on SAFEs, the dilution of that additional 20% will come entirely from common equity holders- meaning they will now own 65%. If SAFE holders were also diluted by that round, as they would be in a priced round, the founder would own 68%. This dynamic becomes more dramatic the more capital a founder raises on SAFEs. Note - this is a high level example and does not include an option pool carve out or other round nuances. Almost universally, when a founder raises their first priced round, there is some degree of sticker shock at the outright dilution on their cap table, particularly when options pools are factored in. This pain is even more acute when a founder has raised a fair amount of capital on SAFEs along the way. There are certainly benefits to raising SAFE round, mainly cash in hand 6-8 weeks faster and not having to decide on board seats too early, but I encourage all of our founders to run through cap table modeling and correctly account for the implications of SAFE rounds before they make fundraising decisions.

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Episode #9: Jim Kolchin, Founder of iWallet 🎙️ Hi friends, this is Victor from R136 Ventures! In episode #9 of our "Ventures from Valley" podcast series, I was joined by Jim Kolchin (https://lnkd.in/dsqaxJyA), founder of iWallet (https://iwallet.com/). https://lnkd.in/ddmQxhZ5 From a Soviet childhood to Silicon Valley, Jim’s entrepreneurial journey is as fascinating as it is informative. He shares his path from building hardware, scaling a bootstrapped SaaS empire, and pivoting toward sustainable business growth – all without outside funding. Listen on Spotify, YouTube or Apple Podcasts In this episode, they discussed: - Building on a Budget: The path to bootstrapping iWallet to multimillion-dollar revenue - The Power of Pivoting: Why Jim moved away from hardware and what he learned about scalability and margins. - Staying Default Alive: Jim’s thoughts on scaling sustainably and keeping options open - Attracting the Right Investors: Tips on selecting investors who bring more than just capital - If you enjoyed this episode, make sure to subscribe. For more relevant VC content from "the Valley", follow us on X and LinkedIn. Stay tuned!

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In a startup's early days, founders often skip detailed compensation planning, instead choosing round numbers and moving on. This is an admirable sentiment. But over the long term, founder compensation design can matter a lot to the company, so it's worth taking some time to think this through. Here are some benchmarks and suggestions for founder compensation across: 1. Salary 2. Equity Split 3. Vesting https://lnkd.in/gcDXehXx

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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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Create Health Ventures Launches Inaugural $21M Fund for Early-Stage Digital Health Startups  Create Health Ventures, a venture capital firm focused on early-stage digital health companies, has closed its debut fund, raising $21 million, surpassing its initial target. Launched in 2024, Create Health Ventures is based in Austin, TX, and Chicago, IL. The firm focuses on technologies that enhance healthcare access, improve patient experiences, and deliver value across payers, providers, and pharmaceutical companies. *Its primary focus includes:   1. Payer-Facing Technologies: Solutions that improve member experiences, enable seamless data and workflow integration, and scale technology across geographies.   2. Clinical Trial Enablement: Tools to help pharmaceutical companies recruit and retain participants for late-stage clinical trials as demand increases. *Founders and Approach:   Create Health Ventures was co-founded by Emma Cartmell and Amit Aysola, healthcare veterans with over 45 years of combined experience. They bring operational expertise, regulatory insight, and an extensive network to portfolio companies. The firm exclusively invests in startups led by healthcare industry founders, leveraging its unique value-added platform for scaling businesses.  *The platform includes: - Business development support   - Access to executive coaches   - Connections to healthcare leaders   - Cross-selling opportunities among portfolio companies  *Key Quotes by GPs:  - Emma Cartmell: “Founders from the healthcare industry understand the challenges and opportunities to improve patient outcomes. Supporting them is the most impactful way we can positively transform healthcare.”   - Amit Aysola: “Payers and pharmaceutical companies are driving demand for connected, scalable solutions, and we are investing in companies to meet these needs.”  *Investments and Impact:  The firm has made five investments so far and partners with foundations, impact investors, and strategic healthcare veterans to mentor portfolio companies.  *Portfolio CEO Feedback:   - Dr. Chip Grant (Watershed Health): “Create Health Ventures has been invaluable in scaling operations and fundraising.”   - Shara Cohen (Carallel): “They are the most collaborative and active investor team I’ve worked with.”   - Neil Batlivala (Pair Team): “They’ve helped us manage growth and reach underserved communities.” If you are experiencing difficulties in raising fresh capital and would require warm introductions to new LPs, contact G+QUANT     ▶ Please use G+QUANT's link for inquiries and fund decks, or send your inquiry directly to [email protected] #VentureCapital #DigitalHealth #HealthcareInnovation #Startups #ClinicalTrials #PatientCare #HealthTech #HealthEquity #CreateHealthVentures

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I am beyond excited to unveil Rerail I, which is a labor of love and a vehicle for making my life’s passion a reality. Rerail I, is an angel fund, backed and supported by founders and operators. I invest $200-500k checks at pre-seed/seed into founders looking to utilize fintech as a strategic advantage, with a skew to Europe, but globally! Focused on people & networks I have always been people first. I have cultivated one of the deeper networks of founders and operators in Fintech (& beyond), which become an extension of my team to the founders I back. The power of being collaborative I only realised the power of being collaborative, when I started angel investing back in 2020. I was captured by the transparent, trusted conversations I could have with founders, and the collaboration with the rest of the investors, many of which I have grown up with. I formalized that with the first fund I co-founded, Cocoa, and look forward to amplify that further with Rerail Everything is Fintech  I believe that fintech is a horizontal, not a vertical; the support function of any market. From climate to healthcare and logistics, fintech supports every market. Fintech can also be a revenue model (e.g. vertical SaaS, marketplaces), a target customer, or just a business component. Rerail seeks to invest in founders that can utilize fintech not in fintech companies only With quality talent density at its highest, technological waves like AI, there’s never been a better time to start Rerail. To any entrepreneur out there starting something new where you think Rerail could be a fit, do not hesitate to reach out to [email protected] Can’t wait for the journey ahead 💥 🚀 -> https://rerail.vc -> https://lnkd.in/dn2uSfg7 P.S. A big thank you to Romain Dillet for the awesome TechCrunch coverage!

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🚨 NEW ASOM Pod Alert: Halloween Edition! 🎃 “Why Startups Are Failing Faster Than Ever Before” - EP21 A banana, a pineapple, a grape, and a watermelon walk into a hotel room to shoot a podcast… No, this isn’t a bad fruit salad joke—it’s our spookiest episode yet! 👻 Startup nightmares are real, and we’re peeling back the ghostly layers of why so many founders are hitting bumps harder than a zombie hitting a brick wall. 🕷️ What’s creeping around in this episode? ✔️ Why “authentic marketing” isn’t just a buzzword but the secret sauce to making sure your customers don’t ghost you. ✔️ Budget basics that will scare the poor money management right out of you—because financial literacy is as crucial as garlic to a vampire. ✔️ Product-market fit and staying adaptable: like knowing when to run from the haunted house…or pivot in business. ✔️ Why internal strategies beat hiring agencies—because only you know where the skeletons are buried. ✔️ Making those bone-chilling, tough decisions to keep profits up and your startup’s heart still beating. ✔️ How staying close to your customers can turn you into a mind reader (or at least a very good guesser). ✔️ A sneak peek into the ultimate showdown: funding vs. bootstrapping. Trick or treat, am I right? Get ready for some real founder vibes, a cauldron full of actionable tips, and stories scarier than a werewolf on your doorstep. So grab your pumpkin spice latte (or potion of choice) and tune in below! 👇 Amer G., Jimmy Kim, John Roman, and I give some insanely 🌶️🔥 takes during this one…

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💡 Buy vs. Build: The Tech Dilemma Every Founder Faces In my latest episode with Phillip McGlade, the CEO of Thérapie Clinic & Thérapie Fertility, we dove into a lesson every entrepreneur needs to hear: Phillip once decided to build a custom tech system for his business. The result? It didn’t work. His takeaway? 👉 Sometimes, it’s better (and cheaper) to buy proven solutions than to reinvent the wheel. "Stick to your zone of genius. Focus on what you do best and let the experts handle the rest." This one decision can save you time, money, and a whole lot of headaches. 🎧 Hear Phillip’s full story and learn why he now chooses to buy tech, not build - linked in comments below. #Founders #Entrepreneurship #TechStrategy #LessonsLearned

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Unpopular opinion: Raising too much capital is more dangerous than not raising enough. I recently had the chance to chat with Matt Watson on the Startup Hustle podcast about why raising should support your strategy, not the other way around. Too often, founders orchestrate their strategy to hit metrics that will help them raise another round, which is the tail wagging the dog.  We discussed how to avoid the risks of raising too early, launching too early, scaling too early, and other harbingers of startup failure. Check it out here: https://lnkd.in/g3JkcBHi #StartupHustle #Startups #Entrepreneurship #Leadership #VC #Capital

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What is pre-seed funding and why is it near impossible to secure? I am mentoring several ventures. They all ask the same thing. “Where can I get capital since I have NO REVENUE?” Pre-seed, or “family and friends” funding, is the initial step toward getting enough capital to develop a product. Since pre-seed money is the earliest part of the fundraising journey, few startups manage to secure capital at this stage. Most entrepreneurs in this situation have yet to get a product to market and may not even have a prototype. Convincing pre-seed investors to bet their hard-earned money on an idea that hasn’t been fully completed yet can be tough. But why is it so hard if since so many people want to support tomorrow’s future founders? 1) Lack of Customers/Traction: Investors often want to see some evidence that a startup has traction, whether that's in terms of user growth, revenue, or other metrics. Early-stage companies might not have these metrics yet. 2) Unclear Business Model: Startups might still be refining their business model or value proposition. Investors need to see a clear and compelling plan for how the business will make money- margins, rate of growth,… how will you get there. 3) Team and Execution: Investors are betting not just on the idea, but on the team’s ability to execute. A strong, experienced team can help mitigate some of the risks. Who is on your team? 4) Market Potential: Investors want to see a large, addressable market. If the market size is perceived as too small, it can be harder to secure funding. 5) Competition: Is your venture a stand out? I contend many founders I work with are thinking about their venture but not applying the details and the discipline needed to fully lean in and get their venture going. Show me your obsessive dedication to acquiring customers and I contend you might see pre-seed revenue come your way. 1909 FAU Tech Runway #LeanIn #Innovate TechNexus Venture Collaborative DePaul University

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Should you ask a VC to sign your NDA before sharing information about your startup? Check out my latest Youtube video to hear my perspective on this divisive topic. I cover: - the reasons a VC will not sign your NDA - why its a bad tactic to ask - when its appropriate to ask Many startups thrive on outcompeting their peers through innovation. Its understandable that many startup founders will want to jealously guard information about their innovation, product, and business. But its not a good strategy to ask for an NDA because it creates unnecessary barriers and has very little utility in the early stage of the fundraising process and very hard to enforce. Also, there are ways to mitigate the risks of sharing sensitive info. I am not a lawyer, and nothing I say in this video should be construed as legal advice. This is my personal opinion from ~10 years of experience as a VC investor. #venturecapital #startups #investing #NDAs https://lnkd.in/dxyRyrbG

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Blind optimism vs. pragmatism, the psychological patterns that lead to failure, the future of "moats" in the age of AI, and images of me apparently staring wistfully into space.... Thanks Brian Ondrako for a great podcast!

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Why founders believe they have an 82% chance of success when the reality is closer to 10%. And why being in that 10% means resisting the standard playbooks. That and more in my conversation with Brian Ondrako of the Just Get Started podcast. Check it out and ping me with questions or ideas! 

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I enjoyed going on Nick Telson-Sillett’s podcast, Pitch Deck by Forward Pursuit. Nick is a serial founder and investor (founded and exited DesignMyNight) so knows both sides of the table which always makes for an enriching chat. Some things we discussed: - The perceived power dynamic between VCs and founders can hinder productive conversations. - A compelling product demo can significantly influence investor interest. - Founders must focus on solving real customer problems to succeed. - Hiring standards are crucial for building a successful startup team. - Behavioural roadblocks can prevent the adoption of new solutions. - Validation from potential customers is key for pre-revenue startups. - The early-stage funding landscape has become more efficient and selective. - Pace of execution is a critical factor in attracting investment.

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