Edward Mulder’s Post

https://lnkd.in/d5mxz8pG Yep, 50 percent of VCs will not be able to raise their own fund. That is great news! Maybe they will get it into their arrogant heads their model is broken and needs to change. Pitch Decks and business plans are worthless unless you are investing in a company that produces pitch decks and business plans. Ridiculous way to go about your business.

#121 VCs Adding Real Value to Founders VCs talk a lot about “adding value.” In reality, many don’t! We unpack the real ways VCs add value in this post! #VC #VentureCapital #EarlyStage #Finance #OpenLP https://open.substack.com/pub/thefundcfo/p/121-vcs-adding-real-value-to-founders?r=9rklz&utm_campaign=post&utm_medium=web&showWelcome=true

#Founders, the venture capital world is complex, and sometimes, it brings out the worst in people. At Wisdom Partners, we strive to shed light on the dynamics within the industry and promote a culture of awareness and integrity. 📢 Explore this article from NFX on how VCs can sometimes lose their way: https://lnkd.in/gA2jGrwa In line with this, check out our blog post, where we explore what VCs are and aren’t, and how to get the support you need: https://lnkd.in/gr9xytsj #startupdevelopment

It’s a generational mindset virus guys. 10 to 20 X plus ROI is an impossible value proposition for most to bridge the gap years building recurring revenues. Go back to Professor Scott Galloway basics 2/3 of the traditional IPO market when your venture is ready for capital is going to be inaccessible. We need to keep grinding on restructuring how VC works with angel as with lower buy ins, have mechanisms to distribute risk, focus on product research and development excellence and rid ourselves of this toxic old school convention talking about money (and it’s classical excess) is somehow rude. Small to mid sized growing start ups in software much less specialized journalist / screenwriter / producer teams in our trade can’t allow these business models to continue. It’s at our economic peril for an incumbent management classes gain to continue controlling what they think is going to get market capture. Macro philosophy basic 30 years of tech bro conduct put us here, including the serious stuff like driving the debasement of the dollar with how the fed is operating. Your finance strategy matters as much as your product and software.

Double or Nothing. To better align ourselves with investors, we have created a self-imposed hurdle. If we don't double an investor's money, we don't take any carry (performance fees). I'm very proud of our investor-first mentality at Tandem Venture Partners. Everything we do is focused on treating the investor right and being transparent and accountable. This is one of the ways we align ourselves with investors. It also has a good ring–double or nothing. https://lnkd.in/dFaH_C3x

Another Boston private equity firm focusing on technology investments, Clearhaven Partners, is entering 2024 with fresh capital in its pockets. Michelle Noon, founder and managing partner, told me that the firm typically makes majority investments, but makes "significant" minority investments at times. #Boston #tech #news #massachusetts #privateequity #private #fundingalert #fundingnews

Why do so many VCs say "come back to us when you have a lead?" Is it because they lack "guts" or "conviction" or want to piggyback on someone's work and experience? Sometimes, yes, these are the reasons. But much, much more likely the reason is the mismatch of check size and runway (or round size). E.g., let's say a company has $50k monthly burn, and they want to raise $1M to have 20 months of runway (simplification) and enough time to get to the next milestone to raise at the higher valuation. And let's say a VC really likes the company and is willing to invest. But their check is $100k (based on the fund size, they can't do more). Should they sign and wire? If they do, the company will have 2 months of runway, and if no one else invests in these two months, the company will go bankrupt and it will be a really quick write-off for that VC. So that VC has to wait until you have at least half of the round ready before they sign and wire, to make sure the company has a chance to get to the next milestone. I also was in a situation of investing early with a small check that didn't give enough runway. Thankfully, thanks to our LPs, we were able to increase the check size over time, so now we can move in first into small rounds (when a company has low burn) - $500-700k rounds. However, if a company needs to raise $2M or $3M, our check is still too small to go first. It's useful for founders to understand how VCs operate.

The number of active investors in US VC, which we defined as making two or more deals, plummeted by 38% in the first three quarters of 2023 Do we see the trend continuing in 2024 https://lnkd.in/gm4CSYw3

The VC secondaries market is booming, with Hamilton Lane leading the charge by launching a record $5 billion fund. This surge in activity signals a shift in the #investment landscape, offering new opportunities for liquidity and growth. Why is this important? Secondary transactions provide a vital avenue for early investors to exit and re-deploy capital, fueling further innovation in the #VC ecosystem. Learn more about what's driving this trend in PitchBook's Q&A with Hamilton Lane’s managing director, Matt Pellini, here👇

Sometimes REJECTIONS are simply a result of bad luck, poor timing or the difficulty in seeing the potential you might have. One of the world's oldest VC firms put together a list of deals they rejected over the years that went on to become tremendous success. See? https://lnkd.in/dbTby7Cg. World is cyclical, Everything will eventually happen to everyone. But when you are in that point of cycle where you are on precipice of falling, you will not listen to the one ahead: " Keep walking", instead you will listen to the one behind : "We won't make it." That is human disposition. Things happen by chance. That is universal disposition. We place systems in place. They churn, We are disposed at that disposition. The too much flow of positive can increase the heat and burn the circuit too, hence embrace the negatives in life. #motivation #workmode #investment #vc #friday #work #life