Charles Birnbaum

I really enjoyed breaking in our new studio to sit down with Temporal Technologies Co-Founders Samar Abbas and Maxim Fateev for the latest episode of Founded & Funded. Temporal was founded in 2019 based on an open-source microservices orchestration engine project but is the result of a more than decade-long partnership between the two co-founders that spanned their time working on different iterations of the same thing at AWS, Microsoft, and Uber. In this episode, Samar, Maxim, and I dive into the challenges of building an open-source ecosystem while also working on a commercial offering and scaling a successful company, how to navigate and adjust a product roadmap in an ever-changing world of AI and large language models, and how to successfully build an early startup team, navigate through a CEO transition, and bring on a startups first independent board member. It's a very compelling conversation and a must-listen for every builder out there. Watch the full episode on YouTube: https://lnkd.in/gymf9sES Find other platforms and the transcript on our website: https://lnkd.in/ggRtnKtM Be sure to subscribe to our channel for more deep dives into cutting-edge technologies and the minds behind them. Don't forget to like, comment, and share this conversation if you found it valuable!

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Insightful breakdown from my great Partner Omri Amirav-Drory on the simple factors that really separate the top 1% of investors from the rest, and how more operators should become investors! https://lnkd.in/gEiZdT2h

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Thrilled to announce the launch of our inaugural edition of Beyond Benchmarks at Emergence Capital. This comprehensive report dives deep into the metrics and trends shaping the early-stage enterprise cloud market. A huge thank you to our VC partners and contributors for making this possible! Here's a sneak peek of our findings: --> 60% of companies have already integrated GenAI into their service offerings, with another 20% planning to do so this year. --> While most companies use OpenAI as their primary LLM, many are experimenting with multiple models. We’re seeing a trend toward intelligently routing GenAI inference requests based on cost, performance, and security. --> Companies that have implemented GenAI are showing promising results, with a 7% higher NDR compared to those that haven’t. Beyond Benchmarks goes further with more GenAI trends, insights on the current fundraising environment, and key performance metrics. Our goal is to provide founders and their teams with valuable benchmarks to help them make better-informed decisions. At Emergence Capital, we're committed to helping founders build iconic companies. Dive into the full report here: https://lnkd.in/g6bnvAZM

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Big announcement below! 👇 Let's talk about the current state of GP-LP affairs: 🤯Emerging VC managers have absolutely exploded over the past 5 years. 📈 At the same time, more and more data has surfaced that shows that emerging VC firms tend to outperform larger, established firms. 🤔 All of this has made it intriguing but tough for LPs to know where to direct their attention. 🛍 GPs frequently meet LPs at conferences who are window shopping but not committed to the asset class or emerging managers. 🧾 And both crews get overwhelmed by transactional convos. So Sydney Paige Thomas and I created Abundance. Abundance is a private, nomination-based retreat for active LPs and top emerging GPs to form new experiences together and build lasting relationships. Why Abundance? Abundance is knowing that there is more than enough for more than one to succeed. And a single win within a community is a win for the community itself. The journey of an emerging VC manager from 1st close to final close or Fund 1 to Fund 2 is (1) communal and (2) requires an abundant mindset. LPs look for structure and confidence to feel comfortable investing in early VC firms. Yet many of the feeds we scroll and conferences we attend reinforce inherent power dynamics and transactional thinking, which allows scarcity mindset to creep in for emerging GPs. Some of the best events I’ve attended have been intentionally non-transactional, e.g. Camp Hustle, Recast Summit, and other GPs’ AGMs. The fundraising success stories we see usually involve a community (usually of other GPs & LPs) coming together to support and open doors for the emerging GP. We designed Abundance to be an immersive gathering that fosters these connections. Starting tonight, ~100 GPs and LPs are descending upon Seattle for the inaugural Abundance retreat. This has been under wraps for months and I can’t wait to see it come to life! Thanks in advance to our awesome sponsors who were the earliest believers in this vision: Sydecar, Amazon Web Services (AWS), Gunderson Dettmer, & Zelda Ventures. And shoutout to my dad Ed Illig for logo design & Halle Kaplan-Allen being the first sponsor to say yes 🤩 Presented by The Council Capital & Symphonic Capital.

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Seed VCs are turning to new ‘pro rata’ funds that help them compete with the big firms Alpha Partners, SignalRank and now SaaS Ventures help seed VCs pay for shares when big VCs try to price — or push — them out Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets that gives them the right to buy more shares in a portfolio company during consequent funding rounds to maintain an ownership percentage and avoid dilution. Still, while these rights are not exactly “earned,” they can be expensive. One of the latest trends in VC investing these days are funds dedicated to helping seed VCs exercise their pro rata rights. https://lnkd.in/dRM3RvdA By Christine Hall

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ex Google CEO Eric Schmidt spoke at Stanford this week. Lots of nuggets here, but most interesting for the near term, Schmidt believes in the next year AI is set to make a big leap forward. He predicts AI will combine three important features: 1. Vast knowledge retention (1 million token models) 2. Text-to-action capability 3. Personal AI agent fleets While the full impact is unknown, everyone may soon command their own AI teams. Here's an example: Imagine you're developing new quantum computing algorithms. Your AI assistants could: - Continuously scan and synthesize global quantum research papers - Generate novel algorithm ideas based on this knowledge - Simulate and test these algorithms across various quantum architectures - Automatically document findings and prepare draft papers - Identify potential collaborators and draft outreach emails All initiated by a command like "Advance our quantum algorithm research." This could dramatically accelerate R&D cycles and scientific breakthroughs.. https://lnkd.in/eJbg6cnD #frontiertech #AI #futurefrontier

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Excited to announce Frist Cressey Ventures' investment in Qualified Health and privileged to partner w/ SignalFire, Healthier Capital, Town Hall Ventures and others!   Healthcare costs are increasing at a faster rate than ever before, with the US spending nearly twice as other wealthy countries and still ranking bottom in outcomes. It's a story you've all heard - - US healthcare is known for astronomical inefficiencies, waste, workforce supply constraints, fragmented access, appalling patient experiences, and driving patients and businesses into debt.   Yes these problems present opportunities. But opportunities are limited to the system's appetite for change, desire and incentive to try something new and the innovation available. At FCV we believe we've hit the trifecta with Generative AI. Generative AI has given us truly transformational tools in the toolkit and the healthcare ecosystem is demanding to absorb its benefits. This perfect collision of supply and demand means healthcare is poised for big change.   Generative AI is everywhere, it's buzzy, it dangles hope and opportunity. But many things need to be true for the Gen AI transformation in healthcare to take hold, such as but not limited to:   💡 Patient lives and data need to remain safe: We believe in a highly regulated and human life-touching sector such as healthcare we must ensure Gen AI can drive to unrivalled savings and improvements in the quality of care WHILE not putting patient lives or data at risk.   💡 Systems need to own their utilization of Gen AI: We believe systems will use some hybrid of external partners and homegrown solutions but importantly will want full control of data provisioning and utilization as well as the ability to solve an unlimited number of nuanced issues and not cookie cutter algorithms.   💡 Costs need to be looked at on an enterprise level: We believe the speed of innovation in Gen AI means costs will continue decreasing dramatically but at an enterprise level this will still not be a small detail. Systems will want the ability to understand costs and delegate as needed for the outcomes desired at the organizational level.   Enter Qualified.   We knew when we met Justin Norden, MD, MBA, MPhil and team we were standing in front of changemakers. These individuals have lived and breathed the true application and implementation of Generative AI far before we were asking ChatGPT to write our emails. In fact, if you’ve ever driven in a Waymo you’ve benefited from past products this team has built.   Qualified Health is on a mission to enforce governance in Gen AI, allow systems to rapidly build for their needs, monitor and make decisions for all GenAI (homegrown and external) and accelerate the value the sector can glean from these new technologies.   Huge shout out to William T., Tommaso Auerbach and Jamie Kuntz for their hard work!

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Here’s a question investors are often asked: When evaluating early stage companies, how much time do you spend on due diligence around future exits? It’s not surprising we hear this question a lot. Also not surprising: it’s got a wide range of answers depending on the firm. Some don’t spend much time here at all. Others make it a point to put meaningful time in as part of their process. Our current thinking: take the time to do the work on public market comps. At Alpaca VC, we spend significant time understanding how public market investors will  realistically value a business based on margin profile, product, business model & TAM. In short, we want to know: how will this company be valued at scale when we get taken out? Yes, we can acknowledge that the journey toward exit is a windy road and that there may be pivots along the way, but there are still public market companies that have a business model similar to the early stage company you're evaluating. And you can always look at gross profit multiples if you think the margin profile will change over time. So we still do the work on the comps. Quantitative metrics we look at when making the comparison to public market comps include EBITDA multiple, revenue multiple, Gross Profit multiple or all of the above. As part of this process, it’s also important to factor in the public market company’s year-over-year revenue growth as this will also significantly impact the multiple it trades at. Simple example: if you have two public market companies with similar business models and similar margin profiles, but one's growing 100% year over year, and one's growing 50% year over year, then obviously the DCF (discounted cash flow) analysis is going to spit out a very different valuation for the one that's growing faster. Why this matters: When you take all of that information into account as you evaluate an early stage business, you can begin to create a realistic picture of how this company will be valued in the public markets at exit - or how an acquirer will value the company for an acquisition. Strategic acquirers may, of course, pay a premium, but we won’t underwrite for that. This allows us, for example, to form conviction around valuation based on revenue and gross profit predictions. If we think they can do $100M of revenue five years from now, we use this diligence process to form a thesis about whether the characteristics above (product, margin, business model, etc.) will cause the company to be valued at $200M vs. $500M vs. $1B at exit. Curious how other early stage investors think about underwriting an exit and how much time they’re spending on public market comps even though these companies are in their infancy.

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This is a good resource I've stumbled upon. It covers a plethora of VC and startup-related topics and contains links to expand your knowledge. https://lnkd.in/dqkdV4fA TL;DR: "It's the founders, stupid!" These two lines made me hover over: "I know the physical and emotional tolls that entrepreneurs face". "Resources for Managing Founder Anxiety and Depression" I've been one myself, and it's not for the faint-hearted. I struggled and failed many times. From the standpoint of a person working now for a VC fund, the ability to support a founder who was hit with too much at the same time, to know how to listen, mirror and label Chris Voss's style, and a bit of guidance to build confidence back can do wonders. Assisting portfolio companies doesn't have to be just intros and throwing money or unsolicited advice. And what about identifying troublesome founders before investing to prevent assisting portfolio companies from becoming a nightmare flop? Ahh, that's a tricky one. Startups fail for a variety of reasons. At the early stage, we should look at many things, to name a few: product-market fit, go-to-market, blue ocean or zero to one, CAC and LTV ratio, CAP table, passion, leadership potential, intelligence, technical ability, and many, many more. Crunch the numbers. Sure. What about the early stage? Limited information and knowledge when a decision has to be made, and the outcome is impossible to predict because the future is unknown and unknowable. Examine the founders. If you don't read the founders right and overlook some hidden toxic traits and coping mechanisms that mask something that can derail the startup and founders down the road (vulnerable narcissism, antisocial tendencies, Machiavellism, blameshifting or more benign like anxiety-prone, conflict avoidance, burn-out tendency, inability to delegate, perfectionism, risk aversion, etc.), the chances that it will be your next outlier significantly diminish. How many of you saw dead equity on the capable, founders' clash, low morale, a founder playing the sunk cost game with the fund after burning cash, lying, or even more brazen behaviours like experimenting with horse tranquilisers and smoking weed on a podcast? A "Sudden" shift of values with a splash of megalomania could lead to a CEO removal attempt by the board. Or stealing "HER" voice. It is fun to watch as a TV drama, not to deal with as your portfolio. We won't be able to see it all during a few conversations with the founders and not everyone is Wendy Rhoades from Billions. Knowing how to ask a question behind which is a hidden question and being able to detect when founders say what they think we want to hear to get the funding is a good start. Spending extra time learning that is a good investment. A splash of psychology, empathy, self-awareness, and emotional intelligence to become an excellent GP won't harm your ability to identify and help the right entrepreneurs build great companies.

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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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Wonderful article about Emily Knight and the whole The Engine Accelerator team on the amazing work their doing changing the world with #ToughTech!

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Series A or B wondering when to bring in a VP of Finance or CFO? It’s a crucial decision that can shape the future of your company. At this stage, financial leadership is not just about managing numbers but also scaling processes, securing funding, and driving strategic growth. My colleague Paul breaks down key signs that it’s time to hire and indicators for choosing between VP of Finance and a CFO #FinanceLeadership #CFO #StartupGrowth #SeriesA #SeriesB #NextGenLeadership

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During our Annual Investor Day, we discussed a trend we’ve been observing in the VC market: Funds increasingly using “extra downside protection” to compensate for slow growth & inflated valuations of companies. We’re now starting to see some skeletons come out of the closet (and, ironically, they might be the driving force that will re-open the IPO window). First one out: ServiceTitan https://lnkd.in/eNMuPAe6 ps: despite the compounding IPO ratchet structure, I believe ServiceTitan is a solid company and, at the right price (factoring in all adjustments), it's a great deal!

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I'm excited to announce that Canapi Ventures has led OpenYield's seed round. OpenYield is redefining how bonds are traded and who gets to trade them. Despite being one of the largest global asset classes, fixed income has long lagged behind equities in terms of innovation. Outdated systems, fragmented liquidity, and barriers to access have made bond trading inefficient, opaque, and inaccessible to many, particularly retail investors.   OpenYield is changing that. By delivering an equity-like trading experience for bonds, the platform transforms the fixed income market into a space defined by transparency, efficiency, and access. With real-time pricing, seamless execution, and intuitive workflows, OpenYield is making bond trading easier and more effective for institutional players, market makers, and retail investors alike. This progress wouldn’t be possible without the exceptional leadership of Jonathan Birnbaum and Hilton Lipschitz, whose decades of experience in capital markets and fintech have earned them the right to build a category leader in this market. Also hard to believe that meeting Jonathan over 20 years ago led to this partnership today!   For Canapi’s network of financial institution LPs, OpenYield represents an exciting opportunity to enhance wealth platforms, attract new client assets, and deepen advisor relationships. As the competition for wealth clients intensifies, access to efficient fixed income trading will be a critical differentiator, delivering real value for customers and strengthening client loyalty. Thrilled to be partnering with Ben Savage and Ned Daoro at Clocktower Ventures. Shoutout to Harrison Kioko. More thoughts on our investment thesis here:

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We are so excited to announce our investment in Misha van Beek and Sebastian Janisch, CFA Janisch, and their company, Bayesline, Inc. Bayesline is a risk management software built for the speed of markets - not for the speed of humans. The challenge? The world is in constant flux, with countless interdependent variables changing all the time. Building and updating risk models can take days - or even weeks. An eternity in the world of asset management. Enter Misha and Sebastian. They’ve built an AI-powered platform capable of delivering risk assessments in seconds. For those old enough to remember, it feels like the introduction of spreadsheets with Lotus 1-2-3 (for Gen Z: Microsoft Excel) in the 1980s - revolutionizing financial planning and modeling forever. Their product is as transformative for traditional assets as it promises to be for digital ones. Creating something as sophisticated as Bayesline requires a rare blend of IT, risk management, and quantitative expertise - paired with experience at institutions like BlackRock and Bloomberg. During our due diligence, one expert estimated that only about 20 people worldwide possess the skill set to tackle what Misha and Sebastian are building. Now that’s a moat we like. We’re proud to join Misha and Sebastian on their journey alongside wonderful co-investors like Y Combinator, 468 Capital, and Multimodal Ventures. #bayesline #riskmanagement #blockchainfounderscapital #startup #venturecapital #fintech

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Today, we’re announcing our second fund of $450m to support our mission of partnering with early stage software companies that leverage technology discontinuities into go-to-market advantages. This marks the next chapter in our firm’s evolution. Since we launched Theory Ventures in 2023, we’ve gathered a wonderful team : Lauren DeMeuse, Spencer Farrar, Andy Triedman, Rafa Jara Simkin, Amber (., Arjun Mishra, & Kristin Beach. We have partnered with 8 marvelous founding teams, all using data to power the next wave of innovation across the Modern Data Stack, Artificial Intelligence, & Web3. We’ve grown our fund size to match the needs of founders in this market : average Series A rounds have increased 42% since our launch, a reflection of the growth potential of these software categories. I’m grateful to our team, our founders, & our limited partners for the continued support, & to Allie Garfinkle for sharing more about Theory (https://lnkd.in/gmD7zjSP).

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The Silver Tsunami is upon us, and it's reshaping the mergers and acquisitions landscape like never before. With an estimated $10 trillion in assets set to change hands over the next decade, driven by baby boomers retiring, the opportunity for savvy investors and entrepreneurs is immense. Currently, around 30,000 businesses sell annually, but with more than 8 million baby boomer-owned businesses expected to transition, the volume of transactions could increase tenfold. This is a monumental shift that smart buyers are already preparing for. You don't need to be a Wall Street titan to benefit from this trend; many of these businesses will transition to local entrepreneurs and small business owners. Are you ready to seize a piece of this $10 trillion wealth transfer? Position yourself strategically to take advantage of this unprecedented wave of opportunities. Engage with fellow professionals and explore how you can be part of this transformation. Not sure how? Let's talk about it! #SilverTsunami #MergersAndAcquisitions #BusinessOpportunities

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"Embracing the Pivot: How Investors Support Startups in Transition" Exploring the crucial role of adaptability in startups As investors, our role extends beyond funding—we must provide strategic guidance during these pivotal moments. Read more about navigating pivots in today's dynamic startup ecosystem: lool ventures Yaniv Golan Maya Azoulay Dina Walker Lena Young Roy Katzenelson Yair Kfir Maria Osipov

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