Tremendous

An angel investor's take on life and business

  • Show Me the Money!

    Remember those story problems in math class where the choices are A, B, C, or D – Not Enough Information? Half the time I read a deck, I find myself choosing D.

    That means I’m moving on to the next. After all, there’s 20 pitches in my inbox!

    Here’s how to make sure this doesn’t happen to your company…

    The Details That Matter

    These are the key numbers you want to include:

    1) Current revenue. If you don’t tell me your revenue, I’m going to assume you don’t have any. And at that point, it probably doesn’t make sense to meet.

    If your revenue isn’t that much, don’t be ashamed! Be proud you have any at all! So many startups don’t.

    Here’s what a company that’s just getting started could say: “3 paying customers at $120/mo.” Nice and clear!

    2) Month by month revenue numbers.

    My pet peeve with decks and deal memos is not breaking out revenue monthly. Way too often, companies just put “$500k ARR” in the deck.

    That tells me practically nothing.

    Did you go from $100k to $500k ARR in the last year? Or did you go from $400k to $500k?

    Those are two very different companies on two very different trajectories.

    If your growth is strong, show it off! And if it’s not, there’s no point in hiding that fact — it’s going to come out in diligence anyway.

    Showing your growth trend helps everyone understand where your startup is at. That’s how we all best use our time.

    3) Monthly burn. Fast growth is great, but it’s only impressive if the burn stays reasonable.

    So tell me what you burned last month. If you’re capital efficient, here’s your time to show off!

    And if you’re not, hiding that fact won’t stop you from running out of cash.

    Wrap-Up

    Maybe you don’t want to put all these details in a deck or deal memo. You’re afraid to share information.

    That’s your prerogative. But keep in mind that if you don’t show investors enough to get them interested, you may not get a meeting.

    From what I’ve seen, the best founders are very open with information.

    They want everyone to have all the info they need. And they don’t want to waste the investor’s time, or their own.

    Give us enough info to get us excited! If you do that, your odds of getting a check go way up.

    What info do you include in your materials? Leave a comment and let us know!

    Great to be back!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Lattice’s YC Demo Day Pitch

    Meet My Latest Investment: North

    How I Made My Founder Meetings Twice as Efficient

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • How I Made My Founder Meetings Twice as Efficient

    I kept having the same problem in my founder meetings. We’re 23 minutes into a 30 minute call. I have nine questions and I’ve only had a chance to ask two. Ahh!

    I was taking a walk recently, thinking of how I could fix this problem. Then, it came to me…

    Setting Expectations

    “Founders are doing this because they think I want a presentation,” I realized. “But that’s not actually what I’m looking for. I need to communicate better with them.”

    So now, I say this at the beginning of meetings:

    “I usually run these as a Q&A, back-and-forth, if that’s okay with you.”

    Simple phrase. Totally changes the meeting.

    We have more of a real conversation, with me lobbing questions at the founder and him shooting answers back at me. I easily get the information I want.

    Meetings that took 35-40 minutes are down to 20. And I actually know more about the startup than I would’ve from the longer meeting.

    Making Meetings More Efficient

    If your meetings go from 40 minutes to 20, that means you can do twice as many. And meeting a lot of founders is the name of the game.

    Take my latest investment, North. I had to look at around 150 companies and meet around 75 until I ran into Matt, the founder of North.

    It takes a lot of reps to find a great startup. Anything that can help us gather info more efficiently is a huge help.

    Different Investors, Different Styles

    Founders tend to spend the whole meeting presenting because that’s what a lot of investors want. I’m told that many say nothing throughout the pitch and just have a question or two at the end.

    So, it makes sense that founders have tailored their pitch to this format.

    I prefer Q&A because before we meet, I’ve already reviewed the deck and other materials. Now, I have a bunch of questions on team, sales strategy, product direction, etc.

    If you’re a founder, keep in mind that different investors have different styles. Ask at the beginning of a meeting whether the investor prefers to just hear a pitch or would rather do more Q&A.

    If you tailor the meeting to each investor, your odds of getting a check are a lot higher.

    Wrap-Up

    People think investing in startups is glamorous. The reality is, you do a LOT of Zooms. 🙂

    Those meetings can be pretty darn interesting. You see the future before most people do!

    But anything you can do to make them more efficient is huge. For me, telling founders the format I prefer has made learning about their startup dramatically easier.

    Whether you’re a founder or an investor, try setting expectations about how the meeting will work at the beginning. You’ll both get more out of your time together!

    How do your founder/investor meetings work?

    This will be the only blog for this week. I have some friends coming in from out of town!

    See you on Monday, July 8th!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Meet My Latest Investment: North

    Lattice’s YC Demo Day Pitch
    Why Credentials are Overrated

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Lattice’s YC Demo Day Pitch

    Lattice is valued at $3 billion and is one of the most successful SaaS startups of the last decade. But in 2016, it was a tiny company with just 2 employees.

    Today, I watched their YC Demo Day pitch from 2016. I’d love to tell you I would’ve seen it then, but I’m not so sure I would’ve.

    Jack’s Pitch

    Jack explains that companies need to set goals in order to perform well. But it’s hard for employees to know how their work fits into those big goals.

    Jack’s platform makes it easy for companies to set goals and measure how each employee contributes to them.

    Jack shows us that his early customers are getting a ton of use out of the platform. The number of goals customers are putting onto Lattice is growing 80% MoM.

    What I Like

    For me, the team was the most impressive thing in Jack’s presentation.

    Jack and Eric, his CTO, both worked together at Teespring. The fact that they’ve worked together before and want to again proves they can get along.

    I’ve seen companies fall apart because the founders start arguing. But seeing Jack and Eric’s history together gives me confidence that won’t happen here.

    I also like that they worked at a startup, not a big tech company.

    This means they have an appetite for risk. They also know how a company is built from the ground up.

    What I Don’t

    Jack’s presentation is really abstract. I’d like to see him tell us how an actual customer used the platform.

    What’s a real goal that a company put into Lattice? Then, how did managing that goal in Lattice help the company?

    In any pitch, rip out everything vague. Replace it with something concrete.

    If you can show investors the real value that a customer got from your product, you’re a lot closer to raising money.

    But the biggest negative in this pitch for me is the lack of revenue.

    Jack shows us that the number of goals managed on the platform is growing fast. But as far as we can tell, there’s no cash coming in the door.

    Would I Have Invested?

    Given what a huge success Lattice has become, I want to tell you I would’ve seen it then. But truthfully, I would not have invested in Lattice at this stage.

    The lack of revenue is a dealbreaker for me. Unfortunately, that would’ve meant missing out on a multibillion dollar outcome here.

    But we don’t know the future. All we can do is build a process that gives us the best chance of success.

    If I made a habit of investing in pre-revenue companies, I’m pretty sure my results would be a lot worse. So requiring revenue still makes sense, even if it leads us to miss some winners.

    Wrap-Up

    Jack wound up raising a healthy $2.8 million seed round that spring, led by Thrive Capital. In January 2022, it raised $175 million at a $3 billion valuation.

    I would’ve missed this one, no question about it. But missing some great companies is inevitable.

    And so long as we hit one outlier, our misses don’t matter.

    Would you have invested in Lattice?

    Have a great weekend everybody!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Why I Passed: “WorkerIQ”

    Meet My Latest Investment: North
    Why Credentials are Overrated

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why I Passed: “WorkerIQ”

    They were raising $1 million on an $11 million post-money SAFE. The product was awesome, but I passed. Here’s why…

    WorkerIQ is a composite, not a real startup, and the name is made up. But it shows why a great product alone doesn’t get you funded.

    The Good

    “WorkerIQ” makes it easy to track where industrial workers are and whether they’re safe. Workers wear a bracelet that tracks location and can tell if a worker has fallen.

    “WorkerIQ’s” customers are mostly in heavy industry: oil refineries, mines, shipbuilding, etc. These jobs require coordination by big teams. They can also be very dangerous.

    The bracelet is comfortable to wear and does a great job of telling you if everyone is where they’re supposed to be. Even more importantly, it can help you find an injured worker ASAP.

    The founder, “John,” had a great background in industry, having worked in management at several oil refineries. I knew he’d be able to speak his customers’ language.

    Revenue was substantial, at over $1.4 million a year. That put the pre-money valuation of this round at just 7x annual revenue, which is low for a company at this stage.

    The Bad

    “WorkerIQ” had a lot of revenue, but it wasn’t growing much. Over the last year, the company had grown just 5% month over month (MoM), or 80% year-over-year (YoY).

    I like to see a company at this stage at least triple year over year. We need to get to $100 million in revenue to become a unicorn. It’s hard to get there growing only 5% MoM.

    What’s more, nearly half that revenue came from hardware. That revenue was non-recurring and had much lower margins.

    Decision Time

    “John” had developed an awesome product and knew his customers inside and out. But unfortunately, the product wasn’t selling that well.

    In a normal business, nearly doubling revenue in a year would be amazing. But in the funhouse mirror world of VC, it wasn’t a top performer.

    I was also concerned about the quality of the revenue. Much of it was non-recurring and low margin.

    Despite loving the “WorkerIQ” product, I passed.

    Wrap-Up

    Every year, thousands of startups are founded. Only a few will ever matter.

    To have any chance of making money, we have to invest in the strongest performers. And “WorkerIQ” just hadn’t reached that level yet.

    But if they can get that growth cooking, I’d be glad to take another look!

    Would you have invested in “WorkerIQ”?

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Why Credentials are Overrated

    Meet My Latest Investment: North
    My Ten Year Angel Investing Plan

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why Credentials are Overrated

    A lot of early stage investors are obsessed with credentials. I think that’s a big mistake.

    There’s nothing wrong with going to Harvard or working at Google. But when you look at the best founders, they don’t look like that.

    Instead, you see people with a strong entrepreneurial bent that rose from obscurity.

    Let’s look at the three most valuable companies to come out of the last cycle: Uber, Airbnb, and ByteDance. What can we learn from these special founders?

    Travis Kalanick

    Travis Kalanick of Uber definitely didn’t have a Big Tech pedigree. In fact, his first startup got him sued for $250 billion — nice, huh?

    His next startup, Red Swoosh, gave him a modest exit and a little cash to play with. But it wasn’t until his third that he hit the big time.

    Travis did go to a good school, UCLA. But of course, that’s not Stanford or MIT (nor is my alma mater, Wisconsin).

    What stands out about Travis isn’t any particular line on his resume. It’s his persistent desire to create and sell, all the way back to when he sold pancake breakfasts for the YMCA as a kid.

    Brian Chesky and Joe Gebbia

    Brian Chesky and Joe Gebbia were even more obscure than Travis.

    Brian called his team the “bad news bears of Silicon Valley.” Hardly anyone wanted to meet with them. They were lucky if they could get an e-mail returned.

    And no wonder! They came out of the Rhode Island School of Design, not Stanford CS. Neither had ever worked in tech in any capacity — they were industrial designers.

    But to one man who was paying close attention, there was a tell. That man was Paul Graham.

    Brian and Joe had sold Obama and McCain themed cereal during the 2008 election. It gave them just enough money to keep the company alive.

    These were founders with a burning desire to succeed. How many people would have gone to these lengths to keep a company going?

    PG made the bet.

    Zhang Yiming

    Not a lot of people in America have heard of Zhang Yiming. Until this morning, I hadn’t either!

    Yiming is the founder of ByteDance, the parent company of TikTok. Of all the companies we’re looking at today, ByteDance is by far the most valuable — $268 billion.

    Like Travis, Brian and Joe, Yiming didn’t come from Big Tech.

    Nor did he go to Harvard, MIT, or even Tsinghua. Instead, he studied at the more modest Nankai University in Tianjin.

    Yiming worked for a travel startup called Kuxun out of school. Later, he founded a property search site called 99fang.com.

    He quit after a couple of years and founded his next company: ByteDance.

    Yiming didn’t have much of a pedigree. But like the other founders we’ve looked at today, he had a strong entrepreneurial bent.

    He went to a startup after college, not a major company. And soon, he was off on his own starting businesses.

    Wrap-Up

    Among accelerators and early stage investors, the focus on pedigree seems to get stronger every day.

    Investors are looking for a shortcut. An easy way to tell who will succeed.

    But they’re focused on the wrong things.

    If we look at the biggest successes in tech, they’re short on pedigree. But they’re long on entrepreneurial nerve.

    So I don’t look for an Ivy degree or a track record at Facebook. Instead, I want to know what you’ve started, and how many times you’ve failed.

    I’ll take a gritty entrepreneur over a gleaming resume any day.

    What do you look for in founders?

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Meet My Latest Investment: North
    My Ten Year Angel Investing Plan

    Why I Passed: “CEOCoach”

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Meet My Latest Investment: North

    $60 billion a year in global cloud spend. A lot of that is wasted. But my latest investment, North, is changing that.

    “Plug it in and if you don’t see savings in 5 minutes, fire us.”

    That’s founder Matt Biringer on a recent podcast.

    North really is that fast. And it can save you 50% or more on your cloud bills.

    Best of all, there’s nothing for you to manage. It all happens automatically!

    North makes sure you’re not paying for resources you’re not using. It also lets you buy compute in bulk with other customers, lowering your costs.

    When I meet startups, I look for an unbeatable value proposition. North has one of the best value props I’ve ever seen among the thousands of startups I’ve met with.

    Matt is also incredibly hard working. He’s in Slack answering customer messages at midnight on the weekends.

    With an incredible value prop and deep concern for customers, it’s no surprise North is growing really fast. I’m super excited to be a small investor in their recent seed round!

    Check out North and save your startup some money!

    More on tech:

    My Ten Year Angel Investing Plan

    Why I Passed: “CEOCoach”

    Why Angels Struggle to Keep Their Checks Small

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why I Passed: “CEOCoach”

    They were raising $2 million at a $9 million post-money SAFE. This startup had some awesome growth, but I passed. Here’s why…

    “CEOCoach” is a service that provides a coach for top executives. ”CEOCoach” is a composite, not a real startup, and the name is made up. But it shows why even some companies with great growth have a hard time raising money.

    The Good

    “CEOCoach” is a pretty cool service! They match top executives with their own personal coach, who helps them improve their leadership and decision making.

    When I met with the founder, “Mike,” I could tell how deeply he cared about this problem. Mike’s eyes lit up when he talked about how “CEOCoach” was helping execs get more out of their teams and grow their businesses.

    “CEOCoach” itself was growing really fast too! Over the last year, they had grown 19% month over month, an incredible record.

    The Bad

    Not many companies grow as fast as “CEOCoach.” But I questioned whether they could maintain that growth.

    Churn was high at 5% of revenue a month. That means after a year, you lose 46% of your revenue.

    You’re basically rebuilding the company from scratch every 2 years. It’s hard to grow to $100M ARR when you can’t hold on to customers.

    “CEOCoach’s” retention sat at 54%. I’d like to see a minimum of 60% yearly for a company like this, and I’d prefer 80%.

    “CEOCoach” had what we call “the leaky bucket problem.” It could get customers to sign up, but it couldn’t keep them.

    This tells me the customers aren’t getting enough value from the service. And that’s a problem.

    Decision Time

    “CEOCoach” had some incredible growth. I really liked the founder, Mike, and wanted to support him.

    But I couldn’t get past the high churn. I had serious doubts that this business could keep growing given their difficulty holding on to customers.

    I passed.

    Wrap-Up

    I actually really like “CEOCoach,” and I might be very interested in investing in it in the future. If they can get that churn down, it could be a fantastic business.

    Like every startup I meet with, I saw “CEOCoach” at a moment in time. Today their churn is high, but that could be totally different tomorrow.

    Startups are always raising money. The odds are good I’ll have another shot at this one, and if I do, I just might take it!

    Would you have invested in “CEOCoach”?

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    My Ten Year Angel Investing Plan

    Why I Passed: “ProductPreview”

    Why Angels Struggle to Keep Their Checks Small

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why Angels Struggle to Keep Their Checks Small

    “It was the biggest mistake I made as an investor.”

    I was chatting with a fellow angel a while back. He shared with me something he learned the hard way: keep the checks small.

    But year after year, angels keep getting this wrong. Here’s why…

    How Angels Fail

    Take a typical new angel — we’ll call him Jim. Here’s how Jim will fail at angel investing:

    1. Jim takes $350k he doesn’t need and puts it in the angel investing bucket.
    2. Jim meets Mike, a founder he loves.
    3. Jim invests $200k in Mike’s startup.
    4. A year later, Mike comes back for more. “We need it to launch the product,” he explains.
    5. Jim gives them another $100k. “This should do it,” Jim thinks.
    6. Six months later, that money is gone. Mike comes back again.
    7. “We just need another $50k and we’re home free!” Mike tells him. Mike is persuasive and charismatic — after all, he’s a founder!
    8. Jim gives him the last $50k, desperate to save the $300k he’s already put in.
    9. Product never launches.
    10. Company folds. Jim loses everything.

    I don’t want to be Jim. That’s why I have to diversify widely.

    Diversification gives us the best chance of hitting an outlier. It usually takes 30-50 well chosen seed stage investments to hit a unicorn. And those unicorns are where almost all the returns come from.

    But in order to diversify, I need to write smaller checks.

    Wanting to Feel Important

    Writing lots of small checks is a simple strategy, but angels have a hard time sticking to it. We humans want to feel important, and we just don’t feel as important when we’re investing $5k as when we’re investing $100k.

    “I was concerned about what my fellow investors would think of me,” my angel friend said.

    That’s a very natural human thing. But we have to overcome it, as he did.

    I try my best to purge myself of any desire to feel important.

    These investments aren’t about me being a big shot. They’re about creating something awesome and making a profit while we do it.

    I’m just a small part of that. I know it. And I’m fine with it.

    People Pleaser vs. Company Builder

    Here’s another reason why angels write larger checks than they should: they want to make people happy!

    Most of us do. It feels better to make somebody’s day than to disappoint them, right?

    What do you think makes somebody happier: $250k or $5k? Yep.

    But while I always try to be polite, I can’t be afraid to disappoint people. That’s simply part of the business, and anyone who’s in it as an investor or a founder will have to live with it.

    Our job is to help build companies, not make everyone happy.

    Wrap-Up

    If we want to succeed as investors, we have to find a sound strategy and stick to it. Our feelings can be a big barrier there.

    Humans want to feel important, and they want to please other humans. But we have to move past those feelings in order to find success.

    I like to focus on the task at hand.

    Meet founders, pick the best ones, and slide in a small check. Then, help all I can.

    Nothing else matters.

    What mistakes do you see angels making?

    There will be no blog tomorrow. See you guys on Monday, and have a great weekend!🥳

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    The Power of Small Checks

    My Ten Year Angel Investing Plan

    Why I Don’t Pay for Angel Groups

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Top-Heavy markets spell trouble for late stage startups

    At $3.3 trillion, NVIDIA is the most valuable company on earth. The Magnificent 7 now make up 35% of the S&P 500.

    Meanwhile, the average SaaS company trades at a 5.9x revenue multiple. This is the lowest since 2016 and below long term averages.

    I’ve never seen markets this top-heavy in my life. And it’s a rough environment for late stage startups.

    IPO Window Painted Shut

    We’ve seen very few IPO’s since 2021. A few like Klaviyo and Instacart have come out and performed decently, but those winners are few and far between.

    I agree with Bill Gurley that you can go public in any market. And I’d like to see more companies in the $100-250 million range do so.

    But the reality is, companies just aren’t doing it.

    The Late Stage Funding Crunch

    So we’re staying private. How about raising another funding round?

    Well, about that…

    Late stage venture funding is down 75% from the the 2021 peak. Those $100 million pre-IPO rounds that fell from the sky three years ago are now hard to find.

    It’s hard to raise in the public markets, and it’s hard to raise in the private markets. If you’re a late stage startup, that’s a tough row to hoe.

    Abandoning Late Stage Startups

    The folks who did those $100 million rounds in 2021 often weren’t normal VC’s. They were giant hedge funds like Tiger Global and Coatue.

    These guys invest in both public and private companies. And increasingly, they’re saying sayonara to privates.

    Crossover funds were doing 700 deals a quarter during ZIRP. Now, they’re down to about 150.

    Where did they go? Probably back into the public markets…

    That 5.9x SaaS multiple looks pretty yummy compared to what they’d pay in privates. If you’re a fund with the flexibility to do both, moving more cash into publics makes a lot of sense right now.
    That leaves less money for the late-stage private startups.

    Wrap-Up

    So, where does all this leave late stage startups?

    As ever, profitability is the trump card. If you don’t need to raise money, you control your destiny.

    And for early stage investors like me, here’s the point to remember: the market we invest in isn’t the market we exit in.

    If I make an investment today, it won’t IPO for 10-12 years. By then, public markets could be drooling over tech startups.

    We’ll get our beaks wet. We just have to be patient.

    What are you seeing in the market?

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    How to Drip Market Investors for Fun and Profit

    My Ten Year Angel Investing Plan

    Why I Don’t Pay for Angel Groups

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Sources:

    S&P market cap: https://www.slickcharts.com/sp500/marketcap

    NVDA most valuable company: https://www.bloomberg.com/news/articles/2024-06-18/nvidia-s-591-078-rally-to-most-valuable-stock-came-in-waves?srnd=homepage-americas

    Magnificent 7 market cap: https://companiesmarketcap.com/

    SaaS multiples: https://www.saas-capital.com/the-saas-capital-index/

    Fall in late stage funding: https://news.crunchbase.com/venture/startup-funding-q1-2024-charts/

    Crossover investors retreating: https://files.pitchbook.com/website/files/pdf/Q1_2024_PitchBook-NVCA_Venture_Monitor.pdf

  • How to Drip Market Investors for Fun and Profit

    I saw an incredible startup at a demo day yesterday. When I contacted the founder after, she offered to add me to the investor update.

    This is genius. But very few founders do it.

    Got Dat Drip

    Startups use drip marketing to get customers all the time. This involves e-mail sequences that get potential customers interested and push them to eventually buy.

    By adding a potential investor to your investor update, you’re drip marketing the VC’s.

    You keep inserting your startup into their head. And you show progress over time that gets them drooling.

    How It Works

    I get lots of updates for companies I’ve never invested in. I’ll give each one a quick scan, and if I see something notable, I’ll reply.

    Now and then, one of these prospects starts to really break out. When that happens, I start furiously typing a message to the founder, eager to secure my spot while there’s still time!

    Drip marketing gets investors excited. They can follow your growth in real time.

    It also creates FOMO.

    They know they’re not the only ones getting those updates! They better get a check in while they still can.

    Excitement + FOMO = you raising more cash.

    Saving You Time

    The scarcest resource on earth is founder time. If you’re gonna write this update every month anyway, why not get some additional mileage out of it?

    Fundraising is very time-consuming. But if you drip market investors and show real progress, you’ll have VC’s contacting you.

    Think of all the time that saves! Also, who do you think you have a better chance of closing:

    A) An investor you contact
    B) An investor who contacts you

    Yep.

    But What About Confidentiality?

    Putting a bunch of people who haven’t invested yet on your update puts your company’s private information into broader circulation. But it’s worth it.

    Confidentiality in startups is overrated. It’s so hard to get anyone to care about your company, even if you strip naked and scream about it in Times Square!

    Does it really matter if the world knows your MRR? Do they even care?

    The upside of raising capital more easily is worth the risk.

    If you have truly sensitive info, like a customer you’re under NDA with, just don’t put it in the update. You can always tell your major investors one-on-one.

    Wrap-Up

    Every time you talk to an investor, offer to add them to the update. Some won’t read it, but some will.

    If you start to break out, you’ll have VC’s trampling each other to get in the round. All without you doing any more work than you’re already doing today.

    Do you add potential investors to your update?

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    My Ten Year Angel Investing Plan

    Why I Don’t Pay for Angel Groups

    Meet My Latest Investment: Melengo

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order.