Bretton Putter

‘Building apps around someone else’s LLM is not a thing, has no moat and no defensibility’. A common phrase used by many at the minute – ‘we won’t invest in thin wrappers around OpenAI’. SaaS has built thin wrappers around Databases for years and done just fine. And many started with tasks once done in excel. The value is not just in the model, it’s in the automation, workflow, integrations and business logic that surrounds it. There can be a lot of work in the ‘wrapper’ – don’t underestimate it. #openai #startups #nextinthenorth #saas #founders #seriesa

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An observation distilled from numerous VC conversations on the scale-up funding market - A clear "tri-furcation" has emerged: 1) ultra well-funded LLM and other AI companies where VCs see immense use case driven consumer and enterprise adoption. Such immensity of capital has propelled what is perhaps a 20% GM business model to eschew profitability and pursue manic scaling laws, ever hungry for compute and mind-boggling training parameters, forever letting cloud and compute incumbents drive margins lower (and benefit themselves in return as both sellers to and investors in these scale-ups). 🤖 2) big shining stars in other sectors, many of who had benefited from the 2020-21 funding boom, came up against a high bar to match prior terms. These managed to slow growth, slash costs, activate profitable revenue streams and operating leverage to turn things. Think Vinted (e-commerce), Kry (healthtech), Personio (HR tech), Bolt (mobility), Lydia, GoCardless, Checkout.com (payments), OnlyFans, TripleDot (entertainment), Revolut, Starling, Oaknorth, Atom, Allica Bank (neobanking), Octopus Energy (energy) who are all profitable or at the cusp. Most of them have been on some sort of a path to IPO, but playing cards close to the chest, often going the pre-IPO private funding route. 📈 3) the laggards (or even former leaders in some challenging sectors with high capex, FOAK tech, D2C / B2C, or high burn network-reliant models that went for growth at all costs post fundraising success in 2020-21) have borne the brunt of the slow down the worst. 😵 Now, Wall Street has always had and continues to have its eyes set on what they can effectively trade - what's profitable and will scale efficiently. This pressure has, for most parts, led companies beyond a certain scale to pivot to efficiency and deliver numbers that would make sense to relatively less savvy public investors. Category 1’s fall far from this and won’t IPO. As strategic investors and mega-funds with large cash coffers have decided to fund category #1 till kingdom come, it is #2 and 3 that have had to contend with a crunch of growth capital (combined with a dearth of exits) for anyone but the best of performers. In my opinion, the #2's have come out as the true cream sieved out of the great valuation and fundability reset. As public market activity is all but done for the year (or so it seems), and as I build my own pipeline of 2025 IPOs and interesting scale-ups to watch... ✅ I am following companies in category 2 closely to see how well they execute on the current strategy ✅ Keen also on the cusp-y ones in category 3 who might just pull a neat trick. Pivoting hard this late in the game is not an option for most, and hence, in category 3, I am excitedly following formerly well-capitalized companies that have not raised funds in some years, but are innovative, niche-y, and led by good teams in growth markets.

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🔎Investing in Deep Tech? Not yet...🤦‍♂️ Check below why you should consider investing in Deep Tech startups and VC funds🤝 💡Hint: Deeptech VCs achieved an IRR of 17% in comparison to traditional Tech VCs IRR of 10%, according to a McKinsey & Company survey of 115 Deeptech VCs and 1,572 traditional Tech VC funds Thanks to Francesco Perticarari for sharing ✅ Looking to invest your capital into #VC funds?   🤝 Need warm #GP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments (Series A/Series B)?   ▶ G+QUANT's link for inquiries: https://lnkd.in/gjC_EuTE     #VentureCapital #VentureFunding #VentureDebt #Fundraising #Innovation #Technology #Entrepreneurship #Investing #Network #Investors #LPs #GPs #EmergingManagers #FamilyOffice #Markets #Economy #Business #Founders #Startups #StartupFunding #ai #artificialintelligence #unicorn #secondaries #secondarydeals

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A guide for founders on how much to raise in their first round... Antler has shared a cheat sheet to help founders assess their ability to raise capital in their initial funding round - When it comes to fundraising, two factors can make all the difference: Founder pedigree and Traction. 1️⃣ Founder Pedigree: The less traction you have, the more your background matters. Investors look at your past to assess whether you can deliver in the future. It's about limiting execution risk. This isn't necessarily rational. Great founders get overlooked because they don't fit the typical pattern. But with thousands of similar opportunities, it's a real filter for investors. 2️⃣ Traction: Traction beats pedigree. When you present more than just an idea on paper and your product has gained some traction, your ability to raise increases. Lower-profile founders can raise funds when their idea becomes more than just an idea. Some factors can change the game. → "Levelling up cheats" move you one field to the right in the fundraising matrix, potentially increasing your chances. These might include factors like having a strong co-founder, industry expertise, or unique insights. → "Handicaps" move you one field left, possibly making fundraising more challenging. These could be factors like lack of relevant experience or a difficult-to-explain product. There are two must-haves without which you won't be able to raise, regardless of pedigree or traction: → Fundraising-ability: You need reasonable fundraising skills. Networking, sales skills, storytelling, and running a tight process are crucial. → Market attractiveness: Your market must be significant and attractive. At early stages, it's binary - either investors get excited about the opportunity, or they don't. Remember → Valuations are a function of capital raised. Assume 15-25% dilution irrespective of the amount raised. For example, if a team raises 800k, the valuation will likely be between 3.2m - 5.3m. → LinkedIn profile beats pitch deck in very early stages. Many investors will check your LinkedIn before deciding on a first meeting or looking at your pitch deck. When is this wrong? → Numbers are purely directional. They've been validated with experienced investors, but they're not exact. → This model is primarily for software startups. Biotech & Hardware companies play by different rules. → Copycat models are very binary. Experienced teams can attract large funding, while others struggle to raise anything. → Raising from a rich uncle or family/friends who aren't experienced venture investors follows different rules. Remember, great founders come from all backgrounds. If you don't fit the "classic" profile, you might need to prove more in the beginning, but there are countless examples of founders without traditional backgrounds building awesome companies. What's your thought on this? . #startups #funding #founders #investors #fund #vc #venturecapital #funding #founder #investor

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📋 15 Cheat Sheets on Marketing, Sales, Fundraising, Pitch Decks, and More 🔹 Pricing and Packaging Software 🔹 Five Prospect Stages 🔹 2024 Fundability Benchmarks 🔹 Leadership Transitions 🔹 SaaS Monetization Steps 🔹 Essential Pitch Slides 🔹 Paul Graham’s Investor Guide 🔹 Investor Question Types 🔹 TAM, SAM, SOM Explained 🔹 Comprehensive Pitch Deck Guide 🔹 SaaS Sales with MEDDICC 🔹 Identifying the Right Customers 🔹 Anatomy of a Perfect Pitch Deck 🔹 Prioritization Frameworks #Marketing #Sales #Fundraising #Business #CheatSheets

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How do investors price pre-seed rounds?  This is perhaps one of the most misunderstood aspects of fundraising.  Oftentimes, founders want some framework to better understand what market value is when raising capital into their business.  Public equities and later stage privates have a well defined matrix of revenue/margin profiles that dictate valuation, surely there must be some framework for arriving at a pre-seed valuation. So how do investors price startups that are pre-revenue, or have maybe one of two early customers? In reality, pricing is more a byproduct of a VC fund’s portfolio construction model than any metric of the underlying business.  VCs model out portfolios to include a certain number of companies with an ownership target in each startup.  There are variations to portfolio construction, and the chosen strategy will have a direct impact on the types of rounds a fund will participate in. For example, an early stage fund might raise a $60M fund to lead investments in 30 companies and target 12.5% ownership.   After management fees, there is ~$48M in investable capital.  Assuming a fund holds back ~30% for reserves(this number varies across funds) that leaves ~$30M to invest in initial checks.   In this case a fund must average $1M checks at $8M valuations to reach their intended ownership target of 12.5%.   When you are in diligence with a fund, they are first and foremost trying to get to a yes on the investment opportunity.  When arriving at a valuation though, the math outlined above is the determining factor, more so than any multiple of revenue on the business, or the stated desires of where a founder wants to raise capital.  At the end of the day, a VC is trying to arrive at a valuation that works within their portfolio strategy. This means they are very unlikely to price a deal at $15M cap given the aforementioned portfolio construction, as they would either not own enough($1M = 6.67% ownership) or have to cut too large a check( $1.875M = 12.5%). The thing that is most likely to move an investor off their target valuation is another investor in the picture that is driving the price higher, but even then there are upward bound limits of how high an investor is willing to price a deal. I always advise our port cos to ask an investor early in conversations what their ideal check size/valuation is to make sure there is alignment with the founder's objectives.    

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VC due dilligence starts and ends with the team. The main reason VCs pass right away is they don’t believe this is THE team to do this. The middle of due dilligence is all about the market opportunity and competition. Then in the end it’s back to the team - deep dive to confirm this is THE team to do this. So it starts and ends with the team.

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💡 Imagine a VC fund that shares the detailed data on their investment fund 📈 When founders approach investors for their rounds, they end up on dozens on VC websites stating the obvious, leaving founders behind with many unanswered questions on the VC. "Venture capital is one of the most opaque industries, and while there are reasons for this, it often leads to some shady tactics that frustrate founders" .... Imagine that startups could found a full breakdown of the VC & their fund: their investments, their tickets, their domains, exits, mean valuation, ... ✔ Today there is a VC that has taken this route of total fund transparancy by launching their VC Dashboard instead of just another VC website "Founders’ time is scarce and so they are looking to access enough data to understand three things: - Are we “good” investors; - Are we the right investors for them, and; - What are the chances we'd invest in a company like theirs This will inform their decision of engaging with us or not." Bold and interesting move & breaking some rules by Unruly Capital Stefano Bernardi , we might need a new hashtag for this: #vcinpublic 😎 🔗🔗🔗 Link to their post and the VC Dashboard in the first comment (recommended) ps: I 💜 the "ADD COMPANY" button to submit a pitch, things can be simple 😎

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🎭 Backdrop: The Why of VC Platform as a Differentiator. Yesterday I answered what platform in VC is: the value-add support and resources funds provide beyond capital. But why is capital not enough? 🚀 Venture capital has exploded over the past few decades, from $1.5 billion in tech investments in 1991 to a peak of over $694 billion in 2021. At the same time, there are ~137,000 startups emerging every day. 🌐 During the dot-com era, tech investments reached $90 billion by 2000, backing companies like Google, Amazon, and PayPal. Despite the crash, the VC industry kept momentum. Heavyweights like Sequoia and Accel diversified toward mobile and social startups, leading to major investments in companies like Facebook, Uber, and Airbnb. Accelerators like Y Combinator, Techstars, Seedcamp, and 500 Global emerged, providing founders with critical resources, mentorship, and networks—laying the groundwork for today’s platform approach. 🌍 VC continued to evolve. Hubs emerged outside Silicon Valley, with Europe and Asia now major players. Data and analytics are central to investment decisions, and holding periods have significantly shortened. The rise of mega-funds, micro-funds, and specialised investors has introduced new dynamics. Corporate venture capital (CVC) has also grown, with major firms launching their own arms. As a result, competition for resources, expertise, and networks has intensified. 📉 More recently, the 2021 funding peak, driven by pandemic digital transformation, low interest rates, and heightened tech interest, has given way to a tighter market from 2022 to the present. Economic pressures and market corrections meant that many valuations set in 2021 did not hold up, resulting in promising startups raising flat or down rounds. Consequently, startups have had to tighten their belts and focus on unit economics. While capital remains abundant compared to historic levels, particularly in sectors like AI, funds and platform teams must also remain focused and resource-efficient. 🔎 In this landscape, money alone doesn’t set a fund apart. As one anonymous LP noted in a recent Carta article, it’s “a prerequisite for us to understand how managers provide something other than just capital...How can they win aside from paying the highest price?” In a tougher market, LPs look for fund managers with “credibility from having lived in the trenches”—those who can prove their unique worth. 💡 Mountside Ventures’ Emerging VC Manager Programme—“Europe's first”—highlights this dynamic. While many programmes exist for founders, there is little support for emerging VCs navigating the competitive fundraising landscape. This drives home the rationale for platform teams to offer valuable relationships, practical resources, and support that help VCs stand out and succeed. 🤨 What signals have you observed that support or contradict these evolving dynamics? ⬇️

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What do you do when a radical new technology puts your main product right in the crosshairs of disruption? Listen to David Okuniev — co-founder of Typeform | Ask awesomely — discuss the challenges of innovation within existing structures. David shared a game-changing insight: Radical innovation is really, really difficult to do inside your own product. He emphasized the need to break free from the constraints of familiarity and embrace change from outside the box. Henrik Werdelin and I have both seen our fair share of this in our respective careers. What struck us most was how David leveraged structure to overcome the innovator’s dilemma. By creating a culture of experimentation and providing space for bold ideas, he propelled Typeform beyond incremental improvements. What other hacks have you seen or employed to help your organization overcome the innovator’s dilemma? Share your stories below! 👇 And if you want to dive deeper into our conversation, click the link in the comments to catch the full podcast episode!

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How to Respond When VCs Ask Annoying Questions? → What if Google/Amazon Builds It? → Why hasn’t this been done before? → I don’t think this can be a venture-scale business. → We’d be interested when we see a bit more traction → Come back when you have a lead → Contact us if you like but we prefer warm introductions. → What’s the moat? (for a seed stage) → How can this be a billion-dollar company? → “Yes but what *traction* do you have?” & “Your valuation is so HIGH now!” When raising money for your new business, you'll hear tricky questions from investors. Many new business owners don't know how to think about or answer these questions. All of these questions are okay to ask when a business is just starting. Even in your first meeting, investors often ask, "What if a big company like Google or Amazon makes the same thing?" Many new business owners aren't sure how to answer this. But why do investors ask it? They want to know what makes your business special and how you'll succeed. Here are some answers that might help: → Too big to care: These giants are so huge, your "little" idea might not even catch their eye. They're busy chasing bigger fish. → Slow movers: Big companies are like big ships - they turn slowly. You're a speedboat. You can zip around, change direction fast, and give customers exactly what they want before the big guys even start their engines. → Proof you're onto something: If a big company notices your idea, it means you've found a real problem to solve. That's exciting! → People will pay for better: Even if Google makes a free version, many folks will happily pay for a product that actually answers the phone when there's a problem. Just look at companies like Mixpanel or Superhuman - they're doing great against free Google stuff. → Show off your speed: Can you build things faster than the big company? Can you make your customers super happy? Focus on that. It's your secret weapon. Remember, being small and quick can be your superpower. Use it to outmanoeuvre the giants! Not only this, you'll see lots of odd questions like the one mentioned above. If you're worried and not sure how to answer these questions... We've shared two detailed articles in our Venture Curator newsletter. You can check them out here: Article 1: https://lnkd.in/dTBAVPnv Article 2: https://lnkd.in/da9F4f5q If you find this helpful - please like, comment and share in your network. . #startups #funding #founders #investors #investor #intern #fundraising #vc #venturecapital #angelinvestors #investing

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There has to be a fair and transparent process to any change to taxes and a coherent plan for the future. Unfreezing fuel duty would raise £3bn to absolutely dwarf these taxes on ambition and value creation. And benefit the environment.

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In big companies it’s often not build vs buy. It’s build and buy and do nothing, simultaneously. Many big companies we worked with at Propeller were, at any given moment: • Running internal teams/programs developing competitive products,  • Exploring alternative, overlapping partners, and • Contemplating increasing, pausing or reallocating investment altogether. You’ll do better if you assume big companies aren’t making a binary, or irrevocable, decision.

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Small VC funds vs. Large VC funds by the numbers:‍ By now, most people have definitely concluded that in VC, small funds outperform their larger fund counterparts. Our view, both heuristically and backed by our own data, is that small funds can materially outperform, but there is a clear added dimension of risk that shouldn't be ignored. First, what does our data say by fund size? Keep in mind that the data below is from 253 funds, with only pre-2019 vintage years being included (to eliminate the J-curve effect and our belief that 4-5 years need to pass before a directional stance can be taken on a fund). Also, the mean performance numbers may look inflated, but they include some large outliers and have mainly (by our measure) very high quality fund managers. Also, we expect final DPI will show a softening of perhaps 20-40% in these numbers over time as markdowns continue. TLDR: Small funds (0-100MM) definitely can outperform when successful, but come with a much higher level of volatility (and even this data set has survivorship bias). The challenge for risk mitigation for small funds is discovery, diligence, and building an appropriate level of diversification through picking multiple of these funds. This can be very time intensive and laborious for most investors (given nearly 70% of current VC managers raised funs that fall in this range) Large VC funds can be fundamentally different products when it comes to risk/return through the inherent characteristics they possess, including 1)More Series B and later exposure given the higher % of reserves these funds hold for follow-on relative to seed funds 2) more portfolio companies 3) typically larger teams and brands. Also, many larger brands staple offerings of early stage + growth, which by definition will provide lower volatility and should provide liquidity sooner (in theory). However, the tradeoff for less manager risk/lower vol is a tighter band of potential outcomes, with top-end DPI outliers being very rare given the basic math of venture (especially when premium carry is taken into account). At the end of the day, each investor needs to assess their own constraints of time, risk, and return expectations to develop a portfolio of VC funds that makes sense for them. Here is the data: Small Funds (0-100MM): Mean TVPI: 4.3 Standard Deviation: 2.4 Median Portfolio Companies: 26 Mid-Sized Funds (100-250MM): Mean TVPI: 3.6 Standard Deviation: 2.0 Median Portfolio Companies: 24 Mid-Large (250-500MM): MeanTVPI: 3.0 Standard Deviation: 1.2 Median Portfolio Companies: 35 Large (500MM+): Mean TVPI: 2.7 Standard Deviation: 0.9   Median Portfolio Companies: 43  #VentureCapital #InvestmentStrategy #PrivateMarkets #VCInsights #RiskManagement #PortfolioManagement #Allocate

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TLDR: EIS should be scrapped as a fund structure but retained for Angel investments by individuals. Alex Chalmers has done all the work which in 10 years I've never got around to doing: why 95% of EIS/VCT funds are bad for our tech ecosystem, rip #startups off, and why as a Founder you should push back against their stupid fees or not take their money. https://lnkd.in/dnq9ZScS

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Stealing someone else’s business has never been easier. How do you protect it? Moats. Here are 5 of the best moats to protect your business. Switching-Cost Moat:  - Contractual obligations, annual plans, data integrations – changing software can be a huge operational burden.  - Chili Piper reduced churn by 35% for organizations with 3 or more integrations by integrating their platform with other tools.  - Making a product hard to leave can be more effective than building a better product. Founder-Brand Moat:  - A personal brand puts a face to a corporation – creates personal connection & individual accountability.  - Founder-led brands create a sense of community & belonging – that consumers like.  - People don’t buy from corporate giants – they buy from individuals they trust–founder-led companies are doing this at scale. Expansion Moat:  - HubSpot is a master of this: their product starts free.  - Once you hit a certain number of contacts, they lock you into their marketing hub.  - When you grow your sales team, you're now paying per seat.  - Want to change? It’s too late. You’ve built your entire company on their platform. Proprietary Moat:  - Your Intellectual Property (IP) is a shield. If you own your product, competitors can’t rip you off.  - Taking the time to get your documents in order can save you down the line from a knock-off product.  - This is easier said than done – but worth it when possible. Cost Moat:  - Are you the lowest-cost option? You’ve just built one hell of a moat.  - If you have a solid service and the right price point – that's a niche.  - Scale is key here. You have to make up for that low price with a high volume of customers. With the rise of no-code platforms and AI, moats matter now more than ever. Wes Bush breaks down these moats (and 10 more) further in his killer new book, Product-Led Playbook. Worth a read for any and all founders building a product-forward business. #SaaS #moats #entrepreneurship #boostrapped

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Venture Capital: An Alternative Asset Class Venture capital (VC) is a high-risk, high-reward asset class that fuels innovation by investing in early-stage companies with massive growth potential. Here’s a quick look at VC fundamentals: 1. High Risk, High Reward: VCs target disruptive startups addressing large markets, seeking outsized returns. Investments are typically aimed at high-growth sectors with potential for 10x-100x returns. 2. Investment Timeline: VC funds usually operate on a 10-year timeline. In the first five years, funds are deployed to invest in promising startups; the latter years focus on follow-on investments and guiding companies to exit. 3. Stages of Investment: From Seed to Series C, each round has its unique risk profile and reward potential. Seed investments have the highest risk but can yield up to 644% ROI at exit. Later rounds, like Series C, offer more stability but typically yield lower returns. 4. Exit Strategy: VCs aim for major liquidity events, such as an IPO or acquisition, where returns are generated. The goal is a minimum 3x return, with top-performing investments achieving 10x or higher. 5. The Role of GPs and LPs: Limited Partners (LPs) supply capital, while General Partners (GPs) manage the fund, identify investment opportunities, and support companies on the path to exit. PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/ejp-Bhnu

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