Jan Hammer

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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Bolt's crazy #investmentterms seem to be all over the news today. More details were just sourced from The Information and Erin Woo. Any #investor that signs up for this set of terms, and valuation, should have their heads examined! What do you think? #management #venturcapital #privatequity #capitalmarkets #fintech

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HNY! Hope everyone had a great break. Quiet on here as head down. Such a lot of exciting things coming up: - More Tools for all scaleups to improve their growth trajectory - More Founders using VenturePath to secure their Series A-B investment rounds - More VCs joining VenturePath's VC Network - More Events (including a VC dinner for 50 on the 22nd and SuperScalers female founders event on the 30th) - More Partners joining our scaleup support ecosystem - More Data to publish on 2024 VC trends for the UK ScaleUp Investment Mission Busy January! We'll share more on these when we have a minute... If you can play a part, as a founder, VC, investor, partner, sponsor, data provider etc., there's still room for a conversation or coffee with you though 😉

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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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I couldn’t be prouder to be a Venture Partner at Isomer Capital (aka the best European FoF - at least for me) as we just announced the launch of our pioneering £100m secondaries fund. This fund is dedicated to acquiring stakes from LPs in various VC funds, tapping into a massive and largely unexplored market. 🌟 Key Highlights: - Focused Investment: Primarily targeting stakes in VC funds, with selective investments in private companies. - Robust Funding: Already over 20% funded, thanks to strong support from Nordic family offices and a German foundation. - Market Potential: With a growing number of private tech companies and a VC liquidity crunch, Europe's VC secondaries market is poised for rapid growth. - Track Record: This isn’t Isomer’s first foray into the secondaries market. As a firm we’ve done several secondaries deals with portfolio companies and VC firms, including early-stage VC Seedcamp (in 2021) and mobility giant Bolt (in 2023). - Expert Team: Welcoming the amazing Omolade (Rachel) A., formerly of Coller Capital, as a principal to lead this initiative. 💡 Investment Strategy: - 65-75% of the fund will buy "LP interest" stakes in VC funds. - 15-25% will be directed towards stakes in companies. - Up to 15% reserved for flexible investment opportunities. 📈 Looking Ahead: We're targeting returns of 2-3x, with significant distributions expected in the next 4-7 years. As one of the few players in this space, we're not just participating in the market—we're driving it forward. Read all about it here: https://lnkd.in/dc7sbC3G #VentureCapital #SecondariesFund #EuropeanVC

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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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Its's a deal flow time! We are about to share the details of 637 start-ups who joined Rare Founders London's largest #demoday 2 weeks ago with all the investors (only verified ones) in our community. If you are a #founder who is #fundraising and want to get more exposure to investors (IT'S FREE) - submit your details following the link in comments. If you are an #investor interested in pre-seed to series A start-ups join our community (link in comments) to get access access to the monthly deal flow. Please tag #investors and #founders who this might be applicable for.

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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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Yesterday I had the pleasure of appearing on CNBC to talk about the state of tech in the UK and Europe, touching on the state of IPOs vs PE acquisitions, sectors to watch and where the opportunity lies. Thanks for a great discussion Arabile Gumede! Some thoughts from the interview: Signs of Success: The acquisition of UK tech companies by prestigious private equity firms like Thoma Bravo is a testament to the strength and success of the UK tech sector. It's a clear indicator that UK companies are building substantial value and attracting significant international interest. Vibrant Ecosystem: Despite challenges, the UK and Europe boast a vibrant tech ecosystem, particularly in AI, cybersecurity, and fintech. The market has now stabilised post-pandemic, offering a fertile ground for emerging companies to thrive. Opportunity for scale-up investment: Looking at investment into SaaS companies, Europe is on par with the US in the early stages. It is at the scale-up stage that a divide appears – support and more investment into Europe and the UK’s growth companies will further strengthen the region’s tech scene. Watch a clip from CNBC here: https://lnkd.in/d7J8_FNP #Oxx #UKtech #VC #growth

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VCs Shift Focus: From Investment Teams to Impact Teams. 🚀 🚀 🚀 Venture Unlocked with Samir Kaji from Allocate is one of my go-to podcasts. In the most recent episode with Benjamin Sun, cofounder at Primary Venture Partners, they went deep into investment data to help understand the Primary investment thesis and how they drive ROI. "Almost two-thirds of the organization are what we call our impact team. These are all operators dedicated with helping our companies after we invest." Ben Sun As an executive at Nobody Studios and a member of VC Platform, this quote from Ben jumped out. They focus on helping their portfolio graduate from Seed to Series A, directly impacting the portfolio with rigor and expertise. #future #venturecapital #innovation

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When the first alphabet in these conversations changes from 'M" to 'B', you know the funding winter is transforming into spring 🌱 #VC #VentureCapital #Earlystagefunding Read more about the latest monthly funding report for VC funding in July 2024 here: ttps://https://lnkd.in/dhdWF8fP

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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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💡 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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I posted last week about the shift in sentiment from LP's regarding secondaries. It used to be that GP's were told to hold their winners forever but more recently a lot of LP's are recommending pre-seed & seed stage VC's get good at navigating secondary transactions as early as Series B rounds. Obviously a lot of factors go into these decisions such as where you are in the life of the fund, how the rest of the portfolio is performing and the performance of the underlying company in question. But in this new reality, entry price and ownership relative to fund size really matter in order to still generate top decile funds by selling into later stage rounds; and that tends to be at odds with many seed fund strategies I see out there today. According to Carta, the average seed round valuation is $15M and I see some seed funds doing seed deals at $20M - $30M valuations. Many seed funds between $40M - $75M in size (avg of $50M) write seed checks at $15M valuations and probably invest $1.5M into each company to get 10%. The portfolio construction in this scenario is probably 20-25 companies given the check size. Assuming 50% dilution (probably low), you need a company to get to a $1B valuation to return your fund and you have less shots on goal to do that at a time where I think the probability of hitting a winner at seed for any single seed fund is going to go down per my post last week. It also means the opportunities to sell secondaries in later rounds in order to drive meaningful DPI is harder because it likely won't get to that sort of valuation until Series C or later; and you probably don't want to consider selling until the position is worth even more than your entire fund. Alternatively, if you write a $1M check into a deal at a $8M valuation out of a $50M fund, you are getting 12.5% ownership and probably investing in more like 30-35 companies given the initial check size. Higher ownership and more shots on goal. Assuming 50% dilution again, you get there with a $800M valuation. At even lower valuations, $1B outcomes would return multiples on the fund and it really opens up the options when it comes to selling in secondaries in order to manufacture liquidity. Given the current dynamics in the market, I wonder if more funds will start to focus on sub $10M valuation rounds.

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VC world can be cruel and unforgiving. With LPs more and more pushing for distribution and liquidity, fund managers in the mid-tenure of their fund with zero DPI and TVPI around 1.0 would have much more difficulty to raise new fund. The ability to fundraise is one of the crucial indications and validation of the job for VCs. Key highlights from the article below: Thirteen percent of venture General Partners (GPs) no longer plan to raise another fund due to LP pullback. This rate has doubled since H1 2023 when only 6% of GPs had no plans for another fund. Nearly 44% of venture firms surveyed in mid-2023 had previously postponed their fundraising plans due to concerns about overexposure to the asset class. Many emerging managers entered venture capital in 2019 or 2020 when the LP market supported more funds. However, slow exits in the first half of 2024 have led to challenges in raising second funds without significant cash distributions to LPs. Some venture GPs are now actively participating in the secondaries market to demonstrate returns. Despite the challenges, GPs who secured fresh capital remain optimistic. They expect the 2023 and 2024 vintages to be the strongest return years since 2019. 🚀📈 #VC #VentureCapital #Fundraising #LPs #EmergingManagers #TechInvestment #MarketTrends #CountdownCapital #IndustryInsights #JetVentures #JetInvestment‍‍‍‍‍‍

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Founders, what would you want to hear from a VC who loves your idea but is at capacity? It's a good problem to have, but right now at Developer Capital we have a full pipeline to diligence of incredible Founders and innovative ideas. Deal memos take him, talking to customers takes him, helping existing Portco's takes time. Time is our gating factor. But we keep meeting with Founders who's ideas we think are worth doing the work on. My current approach is to meet with these founders, but be transparent about our backlog. If they dont hear back from us for a couple weeks they shouldnt freak out. Is this the right approach? What would you want to hear from the VC in that spot? #VentureCapital #Founders #Startups #VCAdvice #Entrepreneurship #InvestorInsights #StartupJourney #Funding #Transparency #DeveloperCapital

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The Trends I’m Seeing in VC and PE-Backed Companies as a Fractional Advisor. One big shift I’ve noticed is earlier involvement in mentoring pre-seed and scale-ups. Previously, I’d typically step in at Series A or later. But now, I’m being asked to guide companies at much earlier stages. The market is so competitive that founders want to lay solid foundations well before investment lands. It’s a smart move - preparing for growth and scaling in today’s challenging environment requires clear strategies and strong operational frameworks from the start. Catch the full episode: https://lnkd.in/e_JfxnzS #FractionalAdvisor #VC #PE #Startups #ScalingUp

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