Uthish Ranjan

Thinking 🤔 out loud - one of the biggest beneficiaries of GenAI in the enterprise and agentic worfklows will be software PE firms There are so many beaten down SaaS 🦄 they can buy on the cheap and with a GenAI playbook can now reduce costs even more dramatically And as the AI gets better and moves from just the easy stuff like support and code to more complex workflows, the profitability created is going to be 📈 We are going to see a ton of PE buyouts in the months ahead...

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Taavet Hinrikus and I made the Financial Times Due Diligence email. https://lnkd.in/ez2AuGQx One 'unintended consequence' is that if there is a 45% tax on carry and CGT (raising £40m per year, remember) it for all intents and purposes closes the door on new VCs in the UK. Especially started by teams from non-traditional backgrounds. To meet the GP commit, you need to be already part of the 'wealthy' as you cannot rely on the value you create - nearly half of it will disappear - to fund it. We have both had extremely successful startups which are few and far between. The smaller number of new VCs will therefore more likely increasingly be for people who have inherited the capital or can draw it from their already rich family. Probably not want they have in mind with this policy.

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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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"Funding Collapse sends investment in start-ups to six year low" The Times today covering the shocking stats that VenturePath uncovered, with our partner Beauhurst. Great quotes from supporters Michael Moore CEO, BVCA and Julian David CEO, techUK. * UK VC funding at Series A is -44% from last year, and worsening * Q3 24 is down a staggering 57% from Q2, itself down from Q1 * 9 in 10 seed funded startups cannot access Series A VC funding, the next 'rung on the funding ladder' * Just 32 future scaleup companies across the whole of the UK were able to access their first VC funding round in Q3...a 6 year low * Half a billion less capital is going in to UK scaleups at Series A, than just 2 years ago! As the UK scaleup funding gap widens, we are losing ground against other countries, at both startup stage (a position the UK worked hard to achieve, since 2011), and for scaleup support. OECD data: 13th in the world for scaleup support, and that's before Series A funding access dried up. I get that its confusing. Another report (BBB, Nations & Regions) released this week spoke of positive trends in private investment, stating "The data for Q2 2024 shows that investment value has continued to grow". Great, I love to see optimistic data. But under analysis that bundles venture with private equity (later stage), where a few megadeals skew the numbers. Otherwise the exact opposite is true. Our independent research here, for the UK ScaleUp Investment Mission, is laser beam focussed on Series A. The funding round where companies move from the c.1m startups launched each year, through the 2,179 that access seed funding, into the rarefied category of being recognised as future scaleups, attracting Series A funding (£2-10m). The UK venture landscape is currently funding just 248 pa of these companies, and declining. We've been sharing this urgent call for support with the new Government since the day after the election. I've personally met with several Ministers, and spoke to all the relevant Government departments. I will shamelessly repeat loudly what is at stake. UK scaleup funding at Series A has nearly halved in a year, and continues to decline steeply, more than halving in the last quarter. VenturePath developed The UK ScaleUp Investment Mission to convene the scaleup support ecosystem and £7bn of funders to help address this problem, to improve nationwide access to VC investment, and create more venture-backed successes. We have clear support, clear recommendations to reverse this decline in UK scaleup investment, and have made a clear ask of Government for participation in this, to ensure immediate action is taken to create the conditions for success for UK scaleups, ensuring the focus on growth isn't undermined by lack of capital, or equitable access to it. Government decision makers, we'd love your interest, to progress to action. HM Treasury: Rt Hon Rachel Reeves Spencer Livermore James Murray & CC Poppy Gustafsson (welcome to the debate).

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💡 SaaStock Reflections: 5 Fundraising Insights for Early-Stage Founders. Last week at SaaStock, I found myself bouncing between two extremes—presenting to early-stage founders navigating their first fundraise on Monday and tee-d up to discuss the high-stakes challenges of CEOs with >£1bn valuations on Wednesday. The contrast reminded me of one thing: the learning curve never stops, whether you're just getting started or leading a unicorn. For founders getting started, the world of fundraising can be one of the biggest learning curves. So, I’ve pulled together the top takeaways from Monday’s session to help demystify the process for those thinking about raising for the first time. Here’s what I’ll break down this week: ❓What’s happening in VC fundraising? ❓The ‘Power Law’ and why VC isn’t right for 99% of businesses. ❓Alternatives to VC and when they make more sense. ❓How to choose the right VC for you. ❓How much to raise and when is the best time to do it. 1️⃣ So, what’s happening in VC fundraising?? 😕 Still stress in the system. It is hard to speak with conviction (markets hot, markets not, valuations back up, valuations down, down rounds over…a lot of pain still to come etc). The reality is 2020/21 were anomalies (unfair yardsticks to measure against) BUT covid, gov stimulus, inflation, monetary policy, political uncertainty and war have and still massively impact fundraising. 🪟 IPO window closed and M&A activity weak. Public SaaS multiples are way down relative to a couple years ago - 80% of SaaS companies that went public in 2020/1 are trading below their issue price. The IPO window has been closed and M&A activity weak. ⌛Liquidity for VCs has stretched to longer time horizons. According to Carta only 9% of 2021 funds have seen any return vs 25% for the 2017 vintage at the same checkpoint. 3 years in is early for a fund, but it is an important mark as it is when GPs start looking to raise their next funds. 🫰So, LPs are more selective. Whilst returns are stretching out to longer time horizons, the NASDAQ is on a rip and interest rates are high, so alternatives to VC have become relatively more attractive to LPs. So, LP capital is being more selective. Less money is going to fewer VCs compared to a couple of years ago (“flight to quality” for LPs). ✈️ What does this mean for founders? It is relatively harder to raise now than a few years ago. Seed to A conversion had dropped to 15% from 30%+. Ultimately, VCs have refocussed on finding companies best suited to “traditional VC return profiles” (“flight to quality” for VCs, too). Founders raising VC are held to an incredibly high bar. Tomorrow I will cover the mathematical reality of the ‘Power Law’ and why VC isn’t right for 99% of businesses. #VC #fundraising #saastock #albionVC

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Index Ventures has raised $2.3bn in new funds to support founders from seed to IPO. I've spent a lot of my professional life investigating how and why companies scale and endure - and Index Ventures is a phenomenal example of accomplishment. Across nearly three decades of investing, 108 Index-backed companies have reached a valuation of $1 billion or more, 23 have surpassed a $10 billion valuation, and 57 became publicly traded companies. "Today, we’re renewing our commitment to entrepreneurs everywhere – the groundbreakers, the game-changers, the craftsmen and women obsessed with an idea and who will not rest until they bring it to life. We recognize your passion and meet it with equal conviction. That’s why we’re adding $2.3 billion of capital to support you, with our 12th venture fund of $800 million and our 7th growth fund of $1.5 billion." More here: https://lnkd.in/ddj9G-Kw

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The UK investment market allocates less than 1% to impact ventures. ...Let that figure sink in. So many of the brands we read about on LinkedIn are purpose-driven, and while they are rightly celebrated on the platform, the investment market is yet to catch up. Wondering why? Many institutions still believe that purpose and profit can't coexist. ❌ But the data shows that this is a myth. Our goal is to close this perception gap and fast-track impact founders towards investment. At Unrest, we've connected with 700+ purpose-led businesses, and supported 60 companies through four cohort programmes, we know what impact founders are capable of. That's why I'm so excited that we've launched the first round of Impact <> Investor Office Hours, an opportunity for 60 impact founders to pitch their businesses to an investor from Speedinvest, Seedcamp, Octopus Ventures Molten Ventures and many more in a 30-minute virtual session. Applications close this Friday 18th October – and it takes less than 10 minutes to apply. Get your application in now! (link in comments)

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As a non-executive director, if you're not networking with PE, you're missing a huge trick! Here's a guide to some of the prominent UK PE funds and their areas of focus: Large UK Private Equity Funds aka "The BIG boys!": 1. CVC Capital Partners - Generalist fund with a strong focus on consumer goods, healthcare, and financial services. 2. Apax Partners - Invests in technology, telecommunications, healthcare, and consumer services. 3. Permira - Targets consumer, healthcare, technology, and financial services sectors. 4. 3i Group plc - Focuses on mid-market investments across a variety of industries including technology, industrials, and consumer goods. 5. EQT Group - Specialises in technology, healthcare, and industrials. Mid-Sized UK Private Equity Funds: 1. Hg - Invests primarily in software and service-oriented businesses. 2. Ardian - Covers a broad spectrum including energy, technology, and financial services. 3. IK INVESTMENT PARTNERS LIMITED - Focuses on industrial technology, healthcare, and consumer products. 4. Cinven - Targets healthcare, financial services, and technology sectors. 5. Bain Capital Ventures Capital - Invests in a range of sectors including retail, healthcare, and industrials. Venture Capital & Growth Funds: 1. Balderton Capital - Focuses on early-stage technology and consumer investments. 2. Index Ventures - Invests in technology, life sciences, and consumer sectors. 3. Octopus Ventures - Specialises in early-stage investments in technology, healthcare, and fintech. 4. Accel - Targets growth-stage investments in technology and consumer sectors. 5. Seedcamp - Focuses on early-stage tech startups and scale-ups. Sector-Specific Funds: - Healthcare: Syncona Limited , Viatris Ventures - Invest in healthcare innovation and biotech. - Technology: Notion Capital , DN Capital - Specialises in tech-driven ventures and growth-stage tech companies. - Energy & Sustainability: Energy Impact Partners, Chrysalix Venture Capital - Focus on sustainable energy and clean tech. What Virtualnonexecs.com does is help you Identify the right fund for your skills and this involves understanding their focus areas, helping you align. We work with numerous PE, VC and Family Offices to identify talent in minutes! Check out: https://lnkd.in/d3na7CEC 🚀 To join Virtualnonexecs: https://lnkd.in/eXBj687 🔥 #nonexecutive #chair #pe #vc

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What should investors expect from the VC industry over the next 3-5 years when it comes to exits and performance? Rick Zullo, on X, has argued that there will be a greater divergence between VC funds, with the most successful ones producing even stronger performance, while the median fund return will reduce. I would agree with this as we are likely to see fewer, but typically larger, exits. It will become more important than ever to have meaningful exposure to the small number of winners that drive VC performance. We saw this divergence in VC fund performance very clearly after the 2008/09 financial crisis. As you can see from the chart below, it was the top-tier, established managers who make up our Core Manager cohort that massively outperformed as the market recovered. We have identified three key factors that we believe materially contributed to this outperformance: 1. Quality of portfolio companies. We know that VC is a power law asset class, but the distribution of returns is even more concentrated after a correction. The number of successful exits falls significantly and the small number of VCs able to back these companies will materially outperform. We usually see the best companies actually improve their competitive positioning during a correction. They become more capital efficient, increase market share and benefit from many of their competitors being unable to survive. 2. Availability of capital. In a downturn, even the very best companies will usually need to raise additional capital. As a VC, if you don't have the capital to support these companies and protect your ownership, then you are in trouble. The best VCs can still raise new funds even in the worst of markets and will have the capital to ensure their best companies survive. 3. Willingness to continue to invest during the most challenging periods. The best managers have the experience of managing through prior downturns as well as the confidence (and the capital) to take advantage of the opportunities that a correction creates. This means that they can double down on their best companies, often at attractive valuations, and also access market leaders they may have missed in prior rounds. We have seen a major flight to quality from LPs to date in 2024, with a small number of VCs responsible for the vast majority of capital raised. Unfortunately, this is shutting the stable door after the horse has bolted. Venture capital is a cyclical asset class - corrections are a feature, not a bug. This means that LPs need to construct a portfolio that not only captures the upside as the market rises, but is also resilient during a downturn.

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Just a random thought: A few weeks ago I was in a group of US-based emerging VCs and this person - whom I'm always delighted to have a chat with, asked why there were more minority GPs in the group than the typical and archetype GPs (if you know what I mean). I told him that I didn't have an answer to the question because I wasn't part of the selection process - which was supposed to purely be based on their performance. But in the back of my head was another question: if most of the GPs in the group are of the similar background - e.g., 90%+ of them went to Stanford, Harvard, MIT, etc and they all had a previous career at other VC shops, does the skin color really matter? When they all came from similar paths in their lives, does more skin colors really make the VC ecosystem more diverse? I'm all for having more colors in the VC ecosystem - I'm +1 of that color anyway, but at the same time I just think truly diversifying the VC universe takes more than just adding more colors.

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The Family Office Boom Is Proving Hugely Positive For Alternative Investments This is no surprise as most family office invest at least 50% of their capital into alternative investments. But let’s not forget the S&P is up about 25% year to date and most hedge funds that you can actually access are not even close. It makes me wonder how many family office team members actually have their principal’s best interests at heart or if they’re simply protecting their jobs. F Partners Read The Full Article Here: https://lnkd.in/eGppJXdY #singlefamilyoffice #familyoffice #familyoffices #privateinvestors #privatemarkets

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Hands up if you've been the CFO having <THIS> conversation with a founder recently... One should never confuse the map with the terrain. A financial model - forward looking by definition (the clue is in the name, it's a model) - is never going to be intrinsically 'correct', however accurate it might be. And one thing that people get wrong when they think about a financial model is that this is the output they're looking for from their CFO. But the reality is that the model is just a starting point from which you can have a strategic conversation about the following things: 1. What do we know to be true about what drives our business. 2. What reasonable assumptions can we make about how they might change. 3. What resources are needed to fulfil the expected outcome the model suggests. 4. What could go wrong and how do we plan for those eventualities. 5. How much capital <might> we need in order to achieve these objectives and where will it come from (operational cash flow, debt, equity etc.) A CFO is not a good CFO because they can build an excel spreadsheet or use some third party software (most of the CFOs who work with me won't use a model in a box). Rather a CFO is a good CFO because they understand <how a business operates> and how cash flows impact its ability to grow, what are the tactics that feed in to the overall company strategy to achieve its objectives. Ultimately, a CFO focusses on the following: → Capital Management (runway / burn) → Capital Allocation (budgeting / planning) → Capital Structuring (debt vs equity mix) → Capital Raising (sourcing the cash to drive the busines) If you're unsure or exploring whether a CFO makes sense for your business today, give me and the team at EmergeOne a call 👌🏾

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Venture capitalist and podcaster, Harry Stebbings, has closed a $400 million fund for his firm, 20VC, which focuses on backing startups in Europe. Stebbings aims to use his media influence and connections to bring attention to the potential in the European tech market. Key takeaways: Despite the tough climate for founders, there is still money available for investing, with the pot growing bigger. U.S. limited partners are interested in investing in European startups, with a majority of the backers in this fund being from the U.S. 20VC has a unique selling point in bringing operational experience to its investments, as well as sub-funds run by experienced operators. Counter arguments: The uneven math of the venture capital market, where 1% of companies make 90% of the gains, may discourage risk-taking and failure in Europe. The IPO market is still relatively quiet, and some of 20VC's investments may still be pointing towards the U.S. market. #venturecapital #vc #venture #startups

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Someone with a great fund thesis approaches you and they say that they need seed capital for the firm, cash for a GP commitment, a lead/first LP investment, access to resources and ongoing help. Is that a GP stakes deal or is it a GP stakes "startup studio" deal? My opinion: If they just need seed capital and the first LP check in, that's a GP stakes deal. You either loan them debt or invest for equity in the firm and then come in as their lead LP. If they need what that first person needs, that's a partnership which falls under the "studio" model as you're basically the co-founder and business partner. You're putting up the money, doing some work, putting your name on the line and directly investing in the fund (most likely as a GP commit). That requires more/sometimes the majority of equity, built in protections, a lengthy vesting requirement for them and voting control.

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At PeerCapital we love throwing data on perceived fallacies! Couldn't agree more with Ankur on how VC in India is indeed evolving into "something more nuanced, more specialised, and ultimately more enduring". In the context of the amount raised by VC firms in India in 2024, 'new funds' accounted for 37% of total VC capital, compared with 15% last year. The growth signals a need in the ecosystem for fresh perspectives, refined approaches, and the ability to take well-calibrated risks to back early-stage founders. Excited for our ongoing founder conversations and what's to come in 2025! #earlystagevc #earlystagefounders #vc

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Balderton's €1.3bn raise for European startups sparks debate: Does a bigger VC fund lead to better outcomes? First, consider: 💲 Larger rounds demand bigger funds, but returns get harder at scale 💲 $100M fund needs $1bn exit at 10% ownership for a single 1x return 💲 Most early-stage VCs target 3x returns, investing in 30+ companies 💲Management fees (typically 2%) grow with fund size Plus, the current landscape: Giants like Balderton, Index, and Accel are raising massive funds, while smaller firms stick to sub-$200M and focus on early-stage startups. Many VCs have maintained their previous fund sizes, while others are downsizing or struggling to raise new funds (or even returning un-invested capital to investors, as CRV recently announced they will do). Thus, weigh up the trade-offs: Larger funds (≥$500M): 📈 More firepower, full-cycle support 📉 Risk: Pressure to deploy capital, potentially lower returns Smaller funds (≤$200M): 🔍Agility, focused support, higher potential multiples ❌ Limited late-stage participation The future of European VC may not be one-size-fits-all. As the ecosystem matures, perhaps there's room for both Davids and Goliaths. What's your take? Would you bet on a nimble $150M fund or the muscle of a €1B+ vehicle? Source: Sifted #EuropeanVC #FundStrategy #StartupInvesting PS 🔔 Follow me for strategies and resources for startups and VCs! There's a better, streamlined way to raise capital: 💸https://foundersuite.com/ for startups 💸https://fundingstack.com/ for VCs and investors

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Looking forward to joining this panel to discuss the fine balance between growth and burn for SaaS companies in the current funding environment alongside some great investors and operators:Jaysri, Julia, Rasika & Eva!

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I was in a room last week. There were 4 VCs on a panel. There were 16 founders. Every single VC made it as clear as crystal that any email, LinkedIn message or smoke signal that asks them to sign an NDA ends up in the bin. They WILL sign an NDA if it's deeptech/life sciences or similar but never ever ever at a first meeting or to get that first meeting. Only very VERY occasionally will they even bother to tell the founder they won't sign the NDA. And one founder took umbrage and ended up arguing with the VCs. That's not the way to get raises done. VCs don't sign NDAs. VCs don't invest in moronic founders who argue with them on something that is so universally accepted.

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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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