Peter T.’s Post

When is it time to raise a "priced round"? For startup founders considering the transition from simple agreements for future equity (SAFEs) to a priced venture round, there are specific scenarios when making this leap can be strategically advantageous. Firstly, a priced round is typically necessary when seeking to raise a significant amount of capital, usually $5 million or more. In such cases, investors often prefer or require a priced equity round because it provides them with a clearer understanding of the company's valuation and their percentage of ownership. Priced rounds, while more expensive and complex due to the need for more detailed legal and financial arrangements, offer a structured investment framework that can be more appealing to major investors looking for stability and defined rights. Secondly, the decision to move to a priced round can be driven by the accumulation of post-money SAFEs. If a company has issued several SAFEs, continuing to add more can lead to excessive dilution for the founders once these convert into equity. Conducting a priced round means all outstanding SAFEs convert under known conditions, leading to a more equitable distribution of dilution among all shareholders, including founders. Additionally, as startups mature, the need for more formal governance structures becomes apparent. Priced rounds often attract seasoned investors who not only bring capital but also valuable experience and governance to the board. This transition marks a shift from having investors as mere financial backers to involved stakeholders who contribute to strategic decisions, enhancing the company’s growth and stability with their expertise and networks. #VentureCapital #StartupFunding #EquityFinancing #FounderAdvice #StartupGrowth

How to get it right with market sizing, and why it matters? by Michal Bas, Principal at VentureFriends. 👇 Why it matters.👇 Founders and VCs often clash over market size, but getting it right is crucial. VCs need to see potential for massive returns, meaning startups must target huge markets. A €100M fund needs a €1B exit potential to justify investment. For founders, precise market sizing using bottom-up approaches shows deep understanding and strategic thinking. This alignment ensures VCs back ventures poised for "venture-scale" success, avoiding the pitfall of misaligned expectations and underwhelming market opportunities. Read the full article on EUVC Insights! 🔽 https://buff.ly/3Sf7Arv #venturecapital #startupfunding #Europe #EUVCInsights

What do VCs consider as their track record? 🏆 LPs only see results after 5-7 years ⏳. But a fund finishes investing within 24 months 📅. So, what happens in the remaining time? 🤔 → VCs start raising capital for a new fund 💼. And another new fund after 24 months 🔄. But how do they build a track record when the results of a fund are only known after 5-7 years? 🤨 → They set a valuation for the startups in their portfolio 💸. Fund managers show LPs that their portfolio is growing through two things: i) Startups in the portfolio need to raise the next round of funding at much higher valuations 📈. ii) They need a liquidity event, like being acquired or going public (IPO) 💰. This explains why VCs pressure startup founders to burn through their recently raised capital quickly 🚀 So they can grow fast to raise another round at a much higher valuation 💲. Even if the company’s current model means the faster they grow revenue, the more they lose 💥. → The game for VCs is to make sure the companies in their portfolio grow rapidly 🔝, So they can build a track record to raise their next fund 🎯. If you need to build a roadmap for raising capital and growing your business from $1M -> $25M revenue in 03 years, you can check out this solution: https://lnkd.in/gu_ET-WY 

💡 Why Bigger Valuations Aren't Always Better for Startups In today’s volatile venture capital landscape, aiming for sky-high valuations may seem tempting, but they often come with hidden challenges. 🏙️ As Hustle Fund’s Elizabeth Yin highlights, early valuations should reflect realistic, attainable growth to avoid a disconnect that can harm both founders and early employees. 🚀 Here’s why it matters: 1️⃣ HIGHER VALUATION = HIGHER PRESSURE: A high valuation demands significant traction and growth. If a startup can't meet that bar, it faces a tougher time raising the next round. 2️⃣ EMPLOYEE EQUITY IMPACT: Stock grants to employees lose value if valuations aren’t sustainable, which can reduce morale and loyalty among the team. 3️⃣ INVESTOR DYNAMICS: “Too good to be true” term sheets may give VCs outsized power and control, impacting future rounds and company direction. 🔍 For founders, setting a reasonable valuation based on true market potential can create a stronger foundation. A tighter, realistic raise process can help startups stay on a sustainable path without sacrificing their future. 💼✨ Want to learn more about the insights from Elizabeth Yin and other experts? I found this article super interesting: https://lnkd.in/e_Ag743U #MatthewGlickLegalServices #StartupAttorney #CorporateAttorney #TechStartupLawyer #DealFramework #BusinessNegotiation #LegalTerms #Valuation #VC #Venture #Fundraising

Are you a founder looking for an exit in 2024? New data from PitchBook has exits down 30% in 2023 amid the ongoing IPO drought. Acquisitions seems to be the best bet for cash-strapped startups, or simply knuckling down and riding it out until payday (something I think we can sympathise with 😅 ). Meanwhile, so-called 'tourist' investors - those that flocked to VC funds when interest rates were rock bottom and valuations were stupidly high - are in full flight now (no doubt preferring to snap up cut price London property). Publicly, I imagine the line from VCs would be 'good riddance' but as someone who grew up in a seaside town, I know a thing or two about tourists. Sure, you might complain about them clogging up the roads and pubs but things can go south pretty fast when they decide to go somewhere else. With many thanks to all at PitchBook for the data and to my colleague Sadia Nowshin for the graphs. https://lnkd.in/eWNSG5nN

Profit amid crisis, how SE Asian startups, especially #Fintech thrived. 1 in 4 profitable firms are fintech in the region. 1982 Ventures Herston Elton Powers was recently interviewed by DealStreetAsia on their recent analysis on revenue and profitability of #SoutheastAsia #Startups. “Our strongest companies are now profitable, or near break-even, and scaling, demonstrating the power of disciplined growth and sustainable business models. This is a direct result of our focus on fintech and enterprise software, where we’ve seen companies adapt quickly to changing market conditions,” said Powers. The past year, he said, has separated the wheat from the chaff, and only the strongest companies have survived and thrived." Key highlights: 💰 Among the 922 venture-backed companies analyzed, 54.4% reported year-over-year revenue growth, indicating that more than half are gaining traction in their markets. 🎉 On the profitability front, 16.8% of the sampled companies reported a positive net income in their latest financial year. 💪 1 in 4 profitable firms are fintech: fintech emerged as the dominant sector achieving profitability across diverse sub-segments such as #epayments, #fintechlending, #wealthtech, and #insurtech. 📈 The fintech space has historically led #venturecapital funding trends in SE Asia due to its clear monetisation pathways, large addressable market, and potential for high margins. https://lnkd.in/g-7Y3JbP Scott Krivokopich Amiyandra . Jenny Goh James Kim Allen L. Julio A. Muhammad Mairaj Khalid BNI Ventures Orient Growth Ventures Genting Ventures Trihill Capital STAR Capital FMO - Dutch entrepreneurial development bank DEG IFC - International Finance Corporation USAID Mastercard Visa B Capital Alpha JWC Ventures East Ventures Insignia Ventures Partners AC Ventures GSR Ventures Singapore FinTech Festival Singapore FinTech Association (SFA) INSEAD GIC Temasek PayPal Ventures Carta First Close Partners Antler Better Tomorrow Ventures Quona Capital Flourish Ventures Deloitte Tohmatsu Financial Advisory LLC

"Profit amid crisis, how SE Asian startups thrived. 1 in 4 profitable firms are fintech in the region." 1982 Ventures was recently interviewed by DealStreetAsia on their recent analysis on revenue and profitability of #SoutheastAsia #Startups. “Our strongest companies are now profitable, or near break-even, and scaling, demonstrating the power of disciplined growth and sustainable business models. This is a direct result of our focus on fintech and enterprise software, where we’ve seen companies adapt quickly to changing market conditions,” said Powers. The past year, he said, has separated the wheat from the chaff, and only the strongest companies have survived and thrived." Key highlights: 💰 Among the 922 venture-backed companies analyzed, 54.4% reported year-over-year revenue growth, indicating that more than half are gaining traction in their markets. 🎉 On the profitability front, 16.8% of the sampled companies reported a positive net income in their latest financial year. 💪 1 in 4 profitable firms are fintech: fintech emerged as the dominant sector achieving profitability across diverse sub-segments such as hashtag #epayments, #fintechlending, #wealthtech, and #insurtech. 📈 The fintech space has historically led #venturecapital funding trends in SE Asia due to its clear monetisation pathways, large addressable market, and potential for high margins. https://lnkd.in/g-7Y3JbP

🚀 We’ve Launched! After navigating our own “startup” journey, we’re thrilled to finally share the launch of Resurge Growth Partners. Like many of the founders we’re here to support, we’ve faced the challenges of building something new—and today, we’re excited to get our mission out there. We started Resurge because we saw a gap in the funding landscape. The Venture Capital world is about unicorns and rapid scaling, but along the way, plenty of amazing companies can get left behind—not because they aren’t great, but because they don’t fit the typical VC growth playbook. Our mission is simple: to help these companies reach their true potential. We’re not just providing capital; we’re getting hands-on and offering the support needed to drive growth and profitability. We call this approach Venture Equity—a new path for "venture graduates" .   If you’re leading a company with €8M+ in revenue, located in Europe, UK or Israel and can map a clear path to profitability, let’s connect. We know the challenges, and we’re here to help.📈 Check out our coverage in Sifted: https://lnkd.in/e3Ezn4HQ Big thank you to those who have backed us, Rhiannon Evans-Young for the wonderful PR and Seth Matisak for making us look good. #ventureequity #venturecapital #privateequity #startupfunding

Raising startup capital is tougher than ever, with traditional routes like venture capital and bank loans highly competitive. Enter micro-cap IPOs—overlooked but promising. These small-market cap offerings ($50M to $300M) let emerging startups go public. Though riskier and more volatile, micro-cap IPOs can be game-changers for innovative companies seeking investment. #startupcapital #IPO #venturecapital

Great article from Forbes comparing the US and European venture markets. Looking at growth figures, there are lots of reasons to be positive about Europe with its venture business growing twice as fast as the US over the preceding seven years and its net returns having outperformed the US VCs by 6.24% in the last five years. The big difference and advantage of the US is SIZE ans SCALE! Serpentine Ventures