Roman Sotnikov’s Post

In a recent report by TechCrunch, several high-profile startups, including Plaid and Figma, are highlighted as unlikely candidates for IPOs this year. The article delves into the reasons behind these decisions, pointing to market conditions and strategic considerations as key factors. The current landscape for startup IPOs is described as challenging, with many companies opting to delay their public market debuts. This trend reflects broader uncertainties in the market, prompting startups to reassess their timing for going public. #Startups #IPO #TechNews #MarketTrends #Plaid #Figma ---------------------- Learn more here: https://lnkd.in/eNU6E443

It may seem as if startup exits are getting more difficult, with IPOs taking longer and big tech companies buying fewer startups in this new antitrust environment. But in the meantime, there are more startup liquidity options now: eg. bigger startups, PE firms, venture studios-type roll-up entities, startup acquisition platforms (acquire.com, tiny.com), etc. There are more exited startup founders now than ever, and many of them become repeat founders or angel investors. While there might be more potential acquirer options, everyone is using revenue and EBITDA as the key metric. But this also means, if your company is generating revenue and (better yet) profits, you’ll always have liquidity options. It’s not that you have to sell - with infinite runway, time is on your side. 

This weekend I'm reading the unofficial Afterpay book, "Buy Now, Pay Later" by Jonathan Shapiro and James Eyers. One of the things I'm struck by, is how many things the founders Nick and Andrew did 'wrong' by conventional startup/VC wisdom. According to the book, Afterpay: 👨💻 Committed to a $13 million tech build ($3m cash/$10m equity at next fundraise) with third party development company TouchCorp before really validating their offering in market, 🤑 Raised an $8m seed round from 41 investors @ $28m valuation, which when combined with the $10m equity conversion with TouchCorp, left the founders with 17.5% each (at the seed round!), and 📈 In 2015, they listed on the ASX (!) as a 2 year old company and raised $25m at a $125m valuation not because they wanted to get access to more sophisticated funding options (like I thought) but because they couldn't raise a Series A round from private investors fast enough (so many investors said no). This is all in the first 6 chapters. My take aways so far: There really is no such thing as best practice when it comes to startups. It's really just product, distribution and momentum. #startups #scaleups #planetstartup #cfo #finance #statupaus

I met the founder of a $1B startup. He raised $275M in the last 3 years. Here’s how his UK-based B2B startup became a Silicon Valley unicorn: 2014: Launches a side product while running his development shop full-time. 2015: Builds product. 2016: Launches product.  2017: Iterates. Iterates. Iterates. 2018: Hits $1M in revenue. 6 years in, anyone on the outside looking in would think he’s had limited success. Unsexy space, slow growth, only a handful of customers. But turns out, he was right on the cusp: 2019: 2.5x growth to $2.5M in revenue. Moves to SF. 2020: $17M Series A  2021: $45M Series B  2022: $94M Series C  2023: $120M Series D at $1B valuation Andrew Butt the founder of Enable didn’t rush things. It took him 6 years to raise $1— and 4 years to raise $275M. Bootstrapping meant he often had to chase down customers to make payroll. Runway was always tight. “It could be a couple of weeks or it could be a couple of months. Maybe three months on a really good period.” But he took the time he needed to find that ‘hair on fire’ moment. By the time he raised, product-market fit was undeniable.  It won’t matter if it takes 5 months or 5 years to find product-market fit. But it will matter if you force it and go all-in on ‘just ok’ market pull. Whether we’re talking about the person you marry or the market you chase: Don’t settle. /// Listen to the full episode on The Product Market Fit Show #startups #venturecapital #founders

We are happy to introduce Lever X Studio. Here, we do cool stuff with passionate and obsessive individuals. We build and co-found start-ups in SaaS, transactional businesses and digital marketplaces. We will allow individual investors to back our investment syndicate by investing as low as $1000. We do this while leveraging talent, capital, code and media. Follow to stay up to date with our journey #startupjourney #startups #venturestudio #venturebuilding #startuplife #startupinvesting

➡️𝐓𝐡𝐞 𝐮𝐧𝐢𝐜𝐨𝐫𝐧 𝐫𝐚𝐜𝐞 𝐡𝐞𝐚𝐭𝐬 𝐮𝐩! 🦄🔥 🚀Check out the top 10 most valuable privately held startups of 2024. Some familiar names, and some exciting newcomers! 🚀𝐊𝐞𝐲 𝐭𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬: 𝟏. ByteDance maintains its lead, followed by 𝟐. SpaceX and OpenAI. 𝟑. Stripe and SHEIN continue their strong growth. 𝟒. Revolut, Databricks, Fanatics, Canva, and Chime are also making significant strides. 𝐒𝐨𝐮𝐫𝐜𝐞: FinFab 𝐖𝐡𝐚𝐭 𝐝𝐨 𝐲𝐨𝐮 𝐭𝐡𝐢𝐧𝐤 𝐚𝐛𝐨𝐮𝐭 𝐭𝐡𝐢𝐬 𝐥𝐢𝐬𝐭? 𝐀𝐫𝐞 𝐭𝐡𝐞𝐫𝐞 𝐚𝐧𝐲 𝐬𝐮𝐫𝐩𝐫𝐢𝐬𝐞𝐬 𝐨𝐫 𝐭𝐫𝐞𝐧𝐝𝐬 𝐭𝐡𝐚𝐭 𝐲𝐨𝐮'𝐯𝐞 𝐧𝐨𝐭𝐢𝐜𝐞𝐝? #unicorns #startups #innovation #technology #venturecapital #business #investment #economy #finfab #downloadontheappstore

Interesting analysis from Crunchbase about the backlog in “unicorn” #startups. There are currently over 700 US-based startups with valuations over $1B, and given the historical and more recent annual rates of IPOs and acquisitions, it could take anywhere between from 20 to 50 years to clear the backlog! That's a long time for venture investors to wait for a return. #HRTechnology https://lnkd.in/g6XAZHpc

Scoop! The robo-lawyer startup DoNotPay has paid more than $1 million to employees and investors in its first-ever dividend. Such a financial gesture is a novelty among startups because it requires them to have profits to distribute. DoNotPay was in a position to spread the wealth, its founder and chief executive Joshua Browder tells Business Insider. The company is profitable and has a sum on the balance sheet greater than the capital it's raised to date. Browder briefly considered a buyback, in which stakeholders sell their shares back to the company for cash. But, Browder said he didn't think he'd have any takers. The startup is just doing too well. "The only deal we could push through was one where we give them money for nothing in return," Browder said. Here, we get into buybacks versus dividends, the tax implications, and why dividends could become the norm for aging and profitable startups. https://lnkd.in/evJbjAMU

DoNotPay, a robo-lawyer startup just paid out $1m of dividends to employees and investor shareholders. This is unheard of in the world of startups where most are not even profitable. Is this a new direction for aging and profitable startups before shareholders see share liquidity? #vc #venturecapital #startupfounders #angelinvestors #angelinvesting #startupjourney #tech #techinvesting #seedfunding #startups #entrepreneur #entrepreneurship #founders #fundraising #innovation #technology #business #ceo #ai #techtrends

The old VC mantra of "go big or go home" is broken. My take: Bigger isn't always better when it comes to funding your business. And I'm putting my money where my mouth is... At OpenSky Ventures, we're the pre-seed investors who are focused on finding the disruptive founders building the next generation of innovative commerce startups. We've funded 15 companies over the last 16 months from $100k to $250k check sizes. We're operators with experience who have both successfully exited. We don't care if you want to exit for $50m or $500m as long as our cost-basis is aligned and we have a 10x upside potential. We know that the startup world is constantly pushing this narrative that massive funding rounds and hyper-growth are the holy grail. But from our experience as pre-seed investors, excessive dilution can seriously impact your long-term ownership and potential rewards. Let's look at the numbers. If you raise $100 million to achieve a $500 million exit, it's likely to come with restrictions and preferences that seriously hinder your exit potential. Your slice of the pie ends up being much smaller than if you had taken a more targeted pre-seed round from a VC and then nailed a $100 million exit without giving up tons of equity. This approach may sound counterintuitive (especially given the 'unicorn or bust' narrative that's been pervasive lately), but in many cases, a smaller, more focused strategy can actually lead to a more rewarding long-term outcome--for both founders and investors. In fact, I ran a similar playbook when scaling StackCommerce. We took a small funding round early on, then scaled from there. I call it "seed-strapping." One of our portcos, Levanata, is running a similar play (check out my post on their growth for a deep dive). I'll leave you with this. One of my goals in getting into venture capital is to empower founders to scale their businesses while holding onto the ownership they deserve. On that note, if you know someone who fits that description in the ecomm infrastructure or CPG space, drop me a line.