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No Is an Acronym

No Is an Acronym

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Photo by Brett Jordan on Unsplash

With the spring holidays upon us, we decided to take a break from the usual tech distortion and hyperbole and since this is pitching season – and speaking of the holidays, next up is summer when investors kick back a bit to spend time with their families and/or take some vacation time, so we’re resurrecting an earlier column as a reminder, and we’ll get to why in a bit.

When you were a kid how many times did your parents say No! N-O, NO! More than once, we’d wager. How many times did they say, Yes, Y-E-S, YES!’ Bet I can count the number of times on one hand – zero. Never happened.

We did notice this at a fairly young age – long before we knew that there was such a word – that NO is an acronym. It was parent-code for ‘keep trying’ or ‘change the talking points,’ provided that you’d figured out the code. In some cases, we found that if we changed our approach or arguments, we could get a yes. Persistence pays. And the same can be said of investors. Investors hate to miss opportunities, so they don’t really like to say no. They like to hedge their bets and keep their options open. Sometimes they will give you a hard and fast No and mean it. Still, that said, things change, so one never knows if it truly is a hard no. Or they may suggest that they might be open to coming in next round, once you’ve proved your concept a bit. It’s that FOMO thing, in case they might have missed something the first time around, so they keep you warm and keep their options open. Read More...

Pharm to Table – and That’s Not a Typo

Pharm to Table – and That’s Not a Typo

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Image by Dee from Pixabay

Newly minted HHS Secretary Robert F. Kennedy Jr stated that he will immediately focus on soil  restoration/agriculture. Pay attention, founders: with fewer dollars, both VC and governmental, going to climate change, it may be time to focus on a different shade of green, and if it makes you feel any better, Latest Arctic Ice Data Shows 26% Larger Than 2012 . As for global warming/climate change, a Former NOAA Scientist Confirms Colleagues Manipulated Climate Records, so it looks like we all won’t be dead by 2016, as Al Gore had predicted. Since many inconvenient truths seem to be surfacing of late, here are 10 times ‘experts’ predicted the world would end by now. And as many a failed founder will tell you, it’s hard to fix a problem that may not be as critical as we were led to believe, so focus.

Here’s one that is: Big Ag Treats Us Like Dirt: Why Kennedy Believes Regenerative Agriculture Can Make Americans Healthy Again.

Who exactly is Big Ag? “Four companies (Bayer, Syngenta, BASF, and Corteva) dominate the agricultural market, with Bayer controlling 18.2% of global agrochemicals and, together with Corteva, over half of U.S. retail seed sales for major crops, Mercola reported. Read More...

The French Fries Test

The French Fries Test

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Image by Matthias Böckel from Pixabay

From what we’ve been hearing from the investors whom we know personally, the funding purse strings are opening up again, and mergers are moving forward.

We hosted Jonathan Hakakian of SoundBoard VC at last week’s Online Insights, and part of the discussion centered around changes on how VCs vet startups. Yes, they’re still vetting decks, doing their due diligence and all that, but many meetings are still held over Zoom or some other such platform. Which means that funds have eased the requirements in terms of geolocation. Many VC/Angel firms don’t even feel the need to have a dedicated office. Some use co-working spaces to have somewhere to hold meetings from time to time, and for conference room access. Offices, for both investors and founders, are no longer necessary, at least, in some cases, not until you’ve reached a certain stage.

Jonathan has returned to taking in-person meetings, circumstances permitting, meaning, when it’s geographically possible for him and the founder/founding team. And there are times when they’ll keep it casual, meeting at a diner or restaurant. There is a different dynamic at in-person meetings, but still important to mind your Ps and Qs – and your table manners. Read More...

LLMs and the Way Back Machine*

LLMs and the Way Back Machine*

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Image by Pete Linforth from Pixabay

First, a bit of history. At the dawn of the Web 1.0 era, everyone felt the need to have a presence on this new information superhighway.  Something. Anything. Businesses/corporations started putting up websites, which by today’s standards were placeholders, for which they paid millions to early web-focused ad agencies/web dev shops. But consultants to whom they paid thousands/hour advised them that this was what they needed to do, or their businesses/corporations would become irrelevant in this new tech age. For context, HTML coders were commanding salaries well into six figures. A lot of money was being thrown at a lot of youth and inexperience – web shops where the founders knew nothing about business, luckily, working with clients who knew nothing about the web. If the young founders walked into a client meeting with a palm pilot, they were clearly members of the digerati and you needed to go along with anything they said.

These young companies were renting way more office space than they needed, hiring way more employees than they needed, and were running out of money, so they’d throw a party, get some press, and get acquired by a large company/corporation. Who’d learn too late that they’d acquired little more than smoke and mirrors. But what they really bought was the hype.

Which is a large part of the reason why the Web 1.0 bubble burst. Read More...

A Much-Needed Perspective on Investors

A Much-Needed Perspective on Investors

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Image by Stefan Schweihofer from Pixabay

We were in an online webinar recently, with a young investor as the guest speaker on the virtual dais. He is a former founder with several failures and one success under his belt. Given the fact that he has sat on both sides of the table, we were particularly curious about his investment approach, especially since he is a partner in a quite large fund.

While he is new to the investment side of the table, he has already developed his philosophy: if he is predisposed to investing in a company, he advises the founder to get some traction – meaning paying customers – and check back with him in a few months, whether the founder had achieved this or not. After said time, provided the founder is in the same position monetarily, he advises a pivot.

He does position himself as a very early-stage investor. Maybe not back-of-the-napkin, but fairly close. Read More...

Zombie VCs: the Era of the Walking Dead Funds

Zombie VCs: the Era of the Walking Dead Funds

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Image by Izzy Loney from Pixabay

VCs ask founders a lot of questions. It’s a big part of their job. They’re deploying other people’s money and just as founders have an obligation to make money for their investors, venture firms have an obligation to bring preferably significant returns to theirs.

Founders need to ask investors questions, too. The most important one (or two): are you still deploying funds/when was the last time you made an investment?

PitchBook recently reported that the number of VCs in US deals peaked at 18,504 in 2021 and fell to 9,966 last year. Read More...

CHARGE!

CHARGE!

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Photo by Harri P on Unsplash

We recently hosted a very successful serial founder and sometime investor at our online Investor Insights, who just launched yet another company – his third. It was fascinating to listen to both his advice – and his history. His first company was quickly acquired by Google, which was ‘clearly’ a win, but careful there, founders: great to be ‘adopted,’ but not all ‘parent’ companies are the same. He served his time, celebrated the day the golden handcuffs came off, and quickly launched his next company, which pivoted a few times, as all companies do, but did find its footing and a sustainable revenue stream. Acquisition offers were proffered and rejected, perhaps since the entrepreneur had been there, done that.

The company is still alive and well and turning a profit to the tune of hundreds of millions a year.

Nice revenue stream. Read More...

That Wild, Wild Web: NOT a Tale of Web 3.0

That Wild, Wild Web: NOT a Tale of Web 3.0

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Image by PublicDomainPictures from Pixabay

Tech is and has been referred to as the wild, wild west since the early days of Web 1. Like those pioneers who ventures out into terra incognita when the west was being settled, those web pioneers didn’t know what they’d find, and even in their travels, they were making it up as they went along.

Head’s up: the same goes for investors. There’s no startup handbook, although there are books that bear that title. There’s no investor handbook, either. Which is why founders may hear one thing from one investor, get totally different feedback/advice from another. And yet different feedback/advice from a third, and so it may go, all the way down the line.

  Read More...

The Tortoise and the Huh???

The Tortoise and the Huh???

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How often have we heard that slow and steady wins the race? We’ve been looking at funding reports lately and there’s no doubt that this has been a banner year for both funding – and exits. Win-win for both sides of the table, and all the better when seemingly everyone wins, what, eh? Or do they? And funding, in some cases, seems to be happening at incredible speeds.

 

According to Pitch Book, Venture capital rewrites the record books, with “Venture-backed companies having attracted $150 billion in 2021, more than 90% of last year’s record total…IPOs and SPACs helped to drive the exit value of venture-backed companies to $372.2 billion in the first half of 2021. That was 30% higher than 2020’s all-time record…Firm-level fundraising also (took off), with investors closing funds worth $74.1 billion, about 91.5% of 2020’s record-breaking amount.  And Deals, exits, funds—US VC’s records for value are going to get even bigger Read More...