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Venture Capital News
Saastr
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Wealthfront Files to IPO at $340,000,000+ ARR. IPOs are Back!
- Wealthfront files for IPO with $340M+ ARR, $2B+ valuation, 40%+ margins.
- Lessons for SaaS founders include sticking to core strategy, achieving profitability early.
- 50% organic growth via referrals, strategic patience, and customer success key.
- Wealthfront's IPO timing, profitability, and market entry strategies analyzed for potential valuation.
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Medium
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“hi, I’m a VC and I add VALUE.”
- As a VC, 'adding value' goes beyond typical promises like networks and expertise.
- Real value in venture capital lies in providing clarity, empathy, and integrity.
- Investors should aim to be supportive, listen carefully, and offer bespoke advice.
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Medium
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Ethereum vs Bitcoin: What’s the Real Difference?
- Bitcoin (BTC) was created in 2009 as a decentralized digital currency with a limited supply of 21 million coins, often referred to as digital gold.
- Ethereum (ETH), launched in 2015, serves as a platform for building apps on the blockchain, enabling smart contracts, NFTs, and DeFi applications.
- Bitcoin uses Proof of Work (PoW) while Ethereum transitioned to Proof of Stake (PoS) in 2022, making it more energy-efficient and eco-friendly.
- Bitcoin is preferable for storing value long-term, while Ethereum is suitable for smart contracts, NFTs, and app development, highlighting their distinct use cases.
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Medium
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Context Is King
- Context plays a crucial role in the success of companies, influencing outcomes in fundraising and acquisitions.
- It's not just about having a strong deck or pipeline, but how well the narrative is positioned and presented.
- Context involves the story, timing, and credibility that make a deal feel inevitable and attract investors.
- Winning founders focus on pre-positioning their narrative and creating emotional leverage for investors.
- Investors seek signals of momentum and narrative fit over just strong fundamentals when deciding to invest.
- Timing, positioning, and sequencing are key in creating a hot deal that garners investor interest.
- Narrative leverage influences emotional leverage, impacting the speed and terms of funding rounds.
- Context isn't magic, and sometimes, the world may not be ready for a company's story despite solid fundamentals.
- Successful fundraises are about more than just content; they require the right narrative, timing, and framing.
- Fundraising is a human and timing game, where context often surpasses the quality of pitch content.
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Saastr
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M&A Is Back! Melio’s $2.5B Exit to Xero — In Just 7 Years!
- Xero acquired Melio for $2.5B in a deal to dominate US SMB payments, showcasing the return of big M&A deals.
- The acquisition reflects a revenue multiple of 13.4x, demonstrating strong growth potential and premium exits for B2B companies.
- Xero aims to double group revenue by 2028 through this acquisition, emphasizing a focus on revenue acceleration.
- Key metrics include Melio's 127% CAGR revenue growth, ~$187M annual recurring revenue, 80,000 SMB customers, and $30B+ annual payment volume.
- Melio's success stemmed from addressing US SMBs' payment inefficiencies, achieving 71% TPV growth per customer within the first year.
- The company's revenue diversification model, including transactions, float revenue, subscriptions, and syndication partnerships, enabled sustainable growth.
- Melio's partnership strategy with financial institutions and white-labeled solutions contributed 35% of its revenue, reducing customer acquisition costs.
- A combination of Israeli tech talent and a US market focus contributed to Melio's success, utilizing a distributed employee model.
- Despite a 'down acquisition' with a $2.5B exit valuation, Melio's strategic fit with Xero and market conditions justified the move.
- The story emphasizes the importance of solving real customer pain, revenue model innovation, and strategic market positioning for successful exits.
- Melio's journey showcases building a billion-dollar business by addressing significant problems with innovative technology and strategic decisions.
- For founders, the focus should be on addressing customer pain points, diversifying monetization strategies, and considering the right strategic fits for exits.
- The tweet by Bessemer in 2025 reflects on their early investment in Melio, highlighting the potential they saw in solving small businesses' B2B payment challenges.
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Saastr
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Dear SaaStr: What is a Normal Commission for an Account Exec as a Percentage on Revenue of a Deal?
- For SaaS account executives, commissions typically range from 8-10% of the first-year Annual Contract Value (ACV) of a deal.
- This is standard for inside sales reps working on mid-market or enterprise deals. Smaller deals or lower-margin businesses may have lower commissions.
- Total compensation for an Account Executive usually ends up being about 20-25% of the revenue they close annually.
- Paying much more than 25% can be unsustainable without heavy subsidization.
- The best reps often close 4-5x their On-Target Earnings (OTE) at scale.
- If an AE has a $150k OTE, they are expected to close $450k-$600k in ACV annually.
- Structuring a comp plan should consider these factors to avoid overpaying or underperforming.
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Eu-Startups
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Building a unicorn? Start here: Four principles every founder should know
- Success in building a unicorn is about focus, not resources, team size, or idea innovation.
- Key principles: start with a clear idea, prioritize, and avoid spreading resources thin.
- Example: Miro's success started with improving whiteboard communication as their core idea.
- Building an aligned team is crucial for execution; misalignment can lead to failure as seen in a startup story.
- Misalignment at the leadership level led to a promising startup's failure due to building a complex product and losing market focus.
- Not every client request should be implemented to avoid diluting efforts.
- Adding unnecessary features due to client requests can lead to competition with established players.
- Focused communication is essential, as technological advancements have increased market saturation.
- Clarity and consistency in communication across all contexts are critical for a startup's success.
- Maintaining focus is a skill that requires strategic decisions and saying no to opportunities not aligned with the core vision.
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Medium
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Bootstrap vs. Venture Capital: Choosing the Right Growth Path
- Choosing between bootstrapping and venture capital for funding a social enterprise can be compared to cooking with limited ingredients versus relying on outside funding, each with its own challenges and benefits.
- Bootstrapping involves funding the business with personal resources, offering autonomy but limited financial capacity and growth opportunities.
- Venture capital entails securing funding from investors, enabling rapid scaling but potentially sacrificing control and values to meet investor demands.
- Bootstrapping allows for creative control and organic growth but may restrict expansion due to financial constraints and lack of network support.
- On the other hand, venture capital can provide substantial funding for ambitious growth plans but comes with the pressure to meet investor expectations and potential loss of ownership.
- Both paths have risks and rewards, requiring thorough consideration of business needs, growth potential, and tolerance for outside influence.
- Successful bootstrapping relies on realistic goal-setting and willingness to seek assistance when needed, while venture capital success lies in aligning with investors who share the company's vision.
- Ultimately, the decision between bootstrapping and venture capital should be based on a comprehensive understanding of the business landscape and strategic goals to ensure sustainable growth and alignment with the company's values.
- Exploring both funding options through research and networking with fellow entrepreneurs can provide valuable insights and help in making an informed decision suitable for the business's long-term success.
- Avoiding hasty choices and evaluating the pros and cons of each funding path is crucial to prevent potential setbacks and ensure the chosen approach aligns with the business's objectives and values.
- Whether opting for bootstrapping or pursuing venture capital, maintaining a clear focus on sustainable growth, financial stability, and preserving the company's ethos is essential for navigating the complexities of funding a social enterprise.
- In conclusion, the success of a social enterprise hinges on selecting the funding path that best aligns with its unique requirements, goals, and values, balancing financial considerations with strategic planning for long-term viability.
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Medium
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Venture Capitalist fundraising stays tepid in 2024 at $2.8 billion
- In 2024, venture capitalist fundraising remained subdued at $2.8 billion.
- Between 38–49 new venture capital funds were typically closed annually from 2015, with commitments ranging from $2.4-$4.5 billion.
- 2022 stood out due to a post-COVID startup funding surge where 93 new VC funds raised $11.2 billion, resulting in surplus capital due to a funding winter.
- Global uncertainty during election periods affected fundraising environments in 2024, with a large portion of capital being held back, especially in India.
- IvyCap Ventures closed its third fund at Rs 2,100 crore ($251 million) in 2024, marking a cautious fundraising year for most LPs.
- With increased political certainty in 2025, VC fundraising is expected to improve, particularly in sectors like defence-tech, deep tech, and artificial intelligence.
- Over 25 startups are expected to list on bourses in 2025, leading to significant exits for VCs through public market share sales.
- In 2024, VCs earned a record $4.06 billion from public market exits, reflecting a positive trend driven by a bullish IPO market.
- LPs typically seek a minimum return of 25% from PE/VC investments due to their high-risk nature and long holding period.
- Expectations vary based on sectors, with certain areas like deeptech and semiconductors requiring higher than 25% IRR for startups.
- Overall, LPs focus on the investment cycle rather than just valuations, emphasizing negotiation skills for optimal entry valuations.
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SiliconCanals
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Sweden’s Norrsken commits €300M to support European startups using AI for global good
- Norrsken Foundation commits €300M to invest in European startups using AI for good.
- Funding drawn from Norrsken VC, Accelerator, and Launcher for companies addressing global challenges with AI.
- Focus areas include climate, health, food systems, education, and societal infrastructure.
- In 2024, AI startups raised over $110B, a significant portion of global VC funding.
- Norrsken believes AI can transform systems and create real impact by addressing critical issues.
- Norrsken Partners emphasize using AI to solve urgent challenges, not just for productivity gains.
- Criteria for investments align with UN Sustainable Development Goals (SDGs) to ensure impact and sustainability.
- Norrsken Foundation, founded in 2016, aims to solve pressing global challenges and support startups.
- Global impact ecosystem provides founders with knowledge, capital, and networks to address world issues.
- Norrsken House in Sweden and Kigali support startups, with Norrsken VC investing in impactful startups.
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Medium
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302
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VC firms employ AI to automate deal sourcing & screening
- Venture capital firms are increasingly using artificial intelligence (AI) and automation tools for deal sourcing and screening.
- Auxano Capital has automated about 30-40% of recurring tasks, aiming to automate 60% by the year-end.
- The complexity and volume of VC tasks drive the adoption of AI for evaluating pitch decks, sector research, data entry, and more.
- Good Capital has automated 70-80% of internal tasks, using tools like Airtable, Zapier, and Paperform for follow-ups and information capture.
- AI aids in first-level triage of inbound deals at Good Capital, improving efficiency without compromising quality.
- Automation streamlines deal sourcing and initial analysis, allowing VCs to focus on strategic aspects and deeper engagement with startups.
- IvyCap Ventures uses AI for deal shortlisting and has appointed a chief technology officer for tech-driven transformation.
- AI helps in early detection of promising opportunities at Bharat Innovation Fund by sifting through startup data.
- VCs recognize the importance of human judgement in dealmaking, indicating that full automation may still be a few years away.
- Firms emphasize that AI cannot replace the human touch in decision-making, highlighting the necessity of trust and judgement.
- VCs are promoting AI adoption in portfolio companies, urging startups to target automation of 40-50% of operations by FY26.
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Medium
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363
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Beyond ZIRP: The Strategic Playbook for Investing in a 1.8% Real Yield World
- The Federal Reserve's decision to maintain a 4.5% policy rate with 10-year real yields at 1.8% signals a shift to a more complex risk landscape.
- The 1.8% real yield on 10-year Treasuries affects tech and venture-backed assets, leading to lower valuations and impacting fundraising rounds.
- With core inflation levels high, the Fed projects rates above 3.4% through 2027, emphasizing the end of ultra-accommodative policies.
- Investors and organizations need to revise valuation assumptions, focusing on capital-efficient and profitable business models for investments.
- Failure to adapt to the new economic environment could lead to permanent capital impairment.
- Emerging markets are experiencing capital outflows and currency stress, requiring heightened due diligence and a shift towards resilient opportunities.
- Banking sector regulations impact late-stage private markets, leading to a funding shortage in EM innovation hubs.
- Strategic resilience necessitates robust supply chain diversification, EM currency risk management, and scenario planning for competitive advantage.
- Operational agility is crucial for success in a higher-rate environment, demanding talent arbitrage and prudent financial management.
- The focus is on capital efficiency, credible paths to profitability, and solid financial metrics for growth companies in the new economic paradigm.
- Organizations should adapt by setting higher discount rates, conducting supply chain reviews, and investing strategically for risk-adjusted returns.
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21 Likes
Medium
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302
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Is Defence Tech VC Backable?
- A former military personnel turned VC discusses the challenges and risks associated with investing in defense technology.
- The rapidly evolving tech-enabled battlefield highlights the short upgrade and obsolescence cycles, making defense tech akin to fast-moving consumer goods.
- Defense tech success relies on building quickly, managing a high-volume, low-margin model, and excelling at marketing and distribution.
- Unlike FMCG, defense products must not only be well-marketed but must also effectively function in extreme conditions and under fire.
- Deep technology with substantial moats and scarce talent is more valuable, contrasting with shallow defense tech that faces quicker obsolescence and higher risk.
- Deep tech valuable across multiple sectors, including defense, is referred to as dual-use deep tech, offering growth opportunities beyond government spending limitations.
- The article suggests that running a defense VC fund is too high-risk, favoring dual-use deep tech companies that diversify beyond government-driven markets.
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Medium
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BDAG Just Leveled Up: This Isn’t a Drill. It’s Your Last Shot Before $0.0080
- BlockDAG Network has seen significant momentum with BDAG hitting $0.0030, poised for a jump to $0.0080, driven by a purposeful roadmap and growing ecosystem.
- The project has raised over $320 million in the presale, selling more than 23.2 billion BDAG coins, indicating strong community belief and organic growth.
- Existing price presents an opportunity for increased value potential, with buying or boosting BDAG holdings before the anticipated rise.
- The network is deploying a DAG-based Proof-of-Work architecture for scalability and security, with a live testnet and functional no-code dApp builder.
- Over 2 million users are actively mining BDAG through the X1 mobile app, contributing to the network's development.
- An ongoing 100M BDAG Airdrop Campaign aims to engage participants and test the ecosystem's capabilities.
- Action items are provided for participants to strengthen their position within the BlockDAG Network.
- Confirmed exchange listings, including BitMart, MEXC, and LBANK, are in progress, with a meticulous launch plan for network stability and functionality.
- BlockDAG's focus lies in consistent execution, building utility, and setting the pace in the crypto space.
- The network encourages individuals to seize the opportunity by owning more BDAG amidst its transformative journey.
- BlockDAG emphasizes fundamental strength, execution, and ecosystem building, paving the way for real-world utility.
- Engaging with the updates, sharing the vision, and preparing for the future developments are key aspects highlighted by BlockDAG.
- BlockDAG is positioned as just the beginning of a transformative journey, showcasing swiftness and a forward-looking approach.
- #BlockDAG #BDAG #Crypto #Presale #Airdrop #FutureOfCrypto #Web3 #Blockchain #Mining #DeFi #InvestmentOpportunity
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Medium
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Behind the Term Sheet: Abacum’s $60M Series B
- Abacum's $60 million Series B aims to solve the pain of financial planning and analysis (FP&A) faced by many companies, especially those in the mid-market segment still using Excel and Google Sheets.
- Abacum is part of the third wave of FP&A software, offering native integrations, an intuitive UX, and collaborative features tailored for modern finance teams.
- The platform enables companies to centralize financial data, create budgets and forecasts, and collaborate efficiently.
- Abacum stands out for connecting various financial and operative data sources into a single system, enhancing decision-making and potential expansion into other financial areas.
- The AI-heavy architecture of Abacum supports automated variance analysis, forecast updates, and AI-generated scenarios, transforming the CFO's role into a proactive, insight-driven partner.
- Founded in 2020, Abacum by Julio Martínez and Jorge Lluch focuses on addressing the shortcomings in finance team operations, with a global presence and strong customer base.
- Abacum has demonstrated product-market fit, an ideal customer profile, and potential for global scalability.
- As investors, Cathay Innovation sees Abacum as a significant player in revolutionizing the CFO software stack by offering product-first solutions to growing companies.
- Abacum represents the next generation of B2B SaaS champions, tailored to the evolving needs and challenges faced by finance teams in companies of all sizes.
- Cathay Innovation is excited to partner with Abacum and looks forward to the future prospects unlocked by their innovative approach to financial planning software.
- The article discusses how Abacum's Series B funding and innovative solutions position it as a key player in transforming financial planning and analysis tools for modern finance teams.
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