‎Dillon ‎Harindiran

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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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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🎉 20VC Closes Fund III at $400M to Back Next-Gen Startups London-based venture capital firm 20VC, led by Founder and Managing Partner Harry Stebbings, has closed its third fund at a remarkable $400 million. Known for combining venture capital expertise with a powerful media platform, the firm continues to solidify its position at the forefront of the startup ecosystem. 💰 The Fund Breakdown: - $125M allocated for Seed investments, ranging from $100K to $3M. - $275M dedicated to Series A investments, ranging from $5M to $15M. Backers of the fund include renowned institutions such as MIT Investment Management Company, Horsley Bridge Partners, and RIT Capital Partners plc. 🚀 The 20VC Difference 20VC operates three sub-funds: 20Sales, 20Growth, and 20Product—each supported by top-tier experts from global tech giants. These specialists actively assist portfolio companies in scaling and achieving their full potential. The firm's innovative approach extends beyond traditional VC, leveraging its media platform, which features in-depth conversations with prominent figures from the business and venture capital worlds, fostering a unique blend of investment and insight. 🌟 Key Team Members Harry Stebbings – Founder & Managing Partner Kieran Hill – Partner, Pre-Seed & Seed Paul Bonnet – General Partner, Series A & Growth This latest fund positions 20VC to further support transformative startups, enabling them to grow from the earliest stages to impactful global players. ✅ Looking to raise capital for your #VCfund?   🤝 Need warm #LP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments (Series A/Series B)?   ▶ Please use G+QUANT's link for inquiries and fund decks, or send your inquiry directly to [email protected] #VentureCapital #20VC #StartupFunding #SeedStage #SeriesA #VCNews #Innovation #TechInvestments #StartupEcosystem #Founders

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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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An underappreciated factor in UK VC right now, is the number of firms *only* investing in portfolio companies. ** The effect of funds, particularly the larger/later-stage funds, concentrating their funds on portfolio companies has a dramatic effect on the market. Because the new deals to later-stage funds, are likely the portfolio companies of earlier stage funds. And if the former falls/reduces/stops; the earlier stage funds have to devote more capital to their portfolio than was originally modelled. And it gums up the entire system. And it’s currently affecting all levels of funding, from growth down to seed stage funds. #founders #vcfunding #startups ** I’ve used ‘only’ as a catch all for 100% allocation to portfolio (as some funds are) through to significantly increased levels of portfolio funding (as the majority are).

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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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🚨 Fundraising Alert 🚨 Top tier companies raising Pre-Seed to Series A in the next 6 months should apply to Focal where they can pitch almost all their prospective investors at once. Demo day is on May 16th. ✅ Applying takes 7 mins ✅ Previous applicants raised from funds like Sequoia, Balderton, Episode 1, Lightspeed and GV. ✅ Even if you find fundraising easy, this is a way to build added momentum. You can apply here: https://lnkd.in/eTdTtSw7

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What ‘VC’ means to me: I’ve had people compare our approach at Tin Men Capital to private equity. Largely because we: -Construct a very focused portfolio -Look keenly at positive unit economics/ pathway to profitability -Keenly involved with supporting our founders scale -Are not reliant on unicorns to deliver returns for the fund Which some consider to be radically different from how most VC funds operate. The reason we take this approach is because we have high conviction. That Southeast Asia needs it’s own investing approach. That what’s worked in the US might not work here. In light of all this, our portfolios have delivered above benchmark returns. We expect that to continue. ‘VC’ to me means calculated risks and being flexible to adapt approaches ‘VC’ to me means doing right by the ecosystem for its longevity ‘VC’ to me is delivering returns ethically with a nett positive for everyone ‘VC’ to me means giving back when we’ve succeeded There are many general partners I respect and consistently test our ideas with. I believe we’ve found gems in a class of startups in the region. What people label us is not important to us. Our mission remains the same: -Seed the next generation of regional and global champions -Deliver strong returns/ DPIs -Collectively build a strong and unique venture ecosystem in Southeast Asia. What does a ‘VC’ mean to you?

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NDAs are dead. If you are a founder sending an NDA before you share what you are working on, not only is an NDA dead, put your pitch is DOA as well. VCs look at hundreds of deals and by in large don’t sign NDAs. Why? Plain and simple it’s because it puts restrictions on ability to make some investments, seek out and evaluate others, or advising companies already in their portfolio. Why would a VC ever do that if thier job is to evaluate the best and place capital for thier LPs. The answer is never. So… if you feel you need an NDA… you prob don’t need to be pitching VCs in the first place. If you want something in place, try a friendly confidentiality agreement. That basically just says “this info is sensitive, just for us looking at this transaction and if it doesn’t work out you never talked to us, keep the name and info under wraps, cool?”. Easy.

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The scenario... You're raising a new VC fund and you know people that have investor platforms with, they say, tens of thousands investors all opted in, liquid and looking for new fund opportunities. You shoot over the fund info, docs and deal room. They list it on their platform and email the list. 4 weeks go by and crickets. The odds of that happening is crazy! Even a list of 100 people would get at least 1 inquiry. People fall for these things all the time and it doesn't matter if you're a fund, a startup, a real estate developer... most of these platforms are a joke and they'll just say that your fund, business or deal is somehow "outside of their norm" which is why it's not getting any traction. Do your research, ask for referrals from people who were successful and never pay without doing your due diligence!

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Does being a great VC = being a great manager ? Basically no.  Because the two are very different things.  (It’s not me, Kyle Harrison is saying so!) What's important for a VC can be summed up like that : "The two most important things are (1) performance, and (2) teamwork. But if you don't have number 1 then nothing else matters." Being a good VC is making the right investments to have a solid track record. The currency in VC is getting credit for getting deals done. This leaves little room for investors to train newcomers (ie. Associates/Analysts) because you don’t get recognition from that. So being a good manager isn’t valued as much as being a good investor. But problem is, building a solid track record is very different from building a long lasting investment firm, which can only be done by training associates and so being a good manager. David Haber compare the way VC are working with the way Chicago Bulls won championships in 1991-92 meaning winning on the back of 1 or 2 players (1 or 2 good investors) So the structural incentive rewards only deals getting done leaving on the side building a team that knows how to work together. Everything outside track record could be considered pointless. And that’s why VC can’t be considered as an apprenticeship business. But the the positive thing is, a lot of smart VC (ex: Sequoia Capital (US) or Serena (FR)) already know that training new generations is equally important as having a great track record if you want to survive on the long run. So remember as a VC, find great deals but don’t forget to find a great Associate that can succeed you ;) PS: I’m not going to say it but I could: Automate as much as possible to have time for your Associate. Many thanks to Kyle for this interesting piece! Link in comments 👇

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First Priority: Founder First duty: Protect The Founder at Foundership

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Numbers & insights from a deep tech venture studio that launched 11 companies (all are active) in the last 7 years, reaching £85M valuation across the portfolio: 1. Post Urban, initially bootstrapped by Luke Robinson, an academic with a PhD in physics from Cambridge, now operates with external funding from a UK-based fund. 2. Launched 5 companies during the first 5 years and 6 companies during the last 2 years. 3. All 11 completed pre-seed rounds; 1 of them got Series A, 2 of them are approaching their Series A. 4. The startups have collectively raised ~£25M in venture capital, in addition to receiving grants. The total valuation of the 11 companies is ~£85M, half of which have not yet undergone subsequent funding rounds. 5. Initial equity splits: the venture builder 20%, CEOs of startups 35% (vests over 4 years), CTOs – 20-25%, employees 10-15%. 6. The initial valuation of startups was £2 million, with £300K invested by the venture builder. The last 2 startups were at £3.5-4M initial valuation. 7. Building deep tech ventures requires significantly higher initial funding because these projects need more time to develop demonstrable products. Two portfolio companies hit £1M in ARR. 8. The venture builder has increased the capital for the last 2 startups to ensure they reach meaningful milestones. The CEOs of the startups were able to secure additional funding through their networks, £350K and £450K, respectively. 9. The deep tech investor pool is smaller than that for sectors like SaaS, which requires a stronger proof of concept and market readiness to attract funding. 10. 3-4 times, potential customers became investors in Post Urban Ventures. This is a great approach because it secures investment and validates the concept by gauging whether these potential customers truly believe in the solution and its market necessity. 11. They don't start with a technology or an idea; instead, they integrate insights about global problems and, by actively engaging with advisory boards, founders, and industry experts, identify pain points and align them with technological solutions. 12. They do not bring universities in as co-founders but source scientists or professors to contribute to research and development. This involves leveraging academic expertise to support the technical aspects of startup projects until a prototype is developed. 13. The studio maintains strong connections with major academic institutions, including Cambridge, Oxford, Imperial College, and UCL, supporting its deep tech focus and facilitating access to new technologies and potential founders. 14. Areas of focus in deep tech: AI (Knowledge Graphs, NLP, DNNs, Computer Vision, Edge AI, Active Learning), Quantum Technologies, Biotech, AgTech, Enterprise SaaS. Watch the full interview to gain insights into the portfolio companies, handling IP collaborations with universities, key challenges, and team construction: https://lnkd.in/dCi7fZ7G

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✨ Breaking: Core Fund V and Opportunity Fund V Announces New Fund.- Core Fund V and Opportunity Fund V VC Airtree has launched a new venture capital investment fund, targeting $650 million. It consists of Core Fund V for early-stage startups at the Seed stage and Opportunity Fund V for backing Airtree's portfolio companies in later-stage, scale-up phases. They plan to invest in a dozen emerging startups annually. https://www.airtree.vc/ Please share to let other #Founders know For the ❤️ of Startups #Fusion42 #Startups#Venturecapital

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🖋️The Sir Alex Ferguson Playbook for Mastering VC Deal Sourcing One thing that I've spent more than 10,000 hours on is deal sourcing for early-stage VC. I believe I've developed a unique methodology for it, and in this recent SecondNewsletter, I wrote about how I learned from Sir Alex Ferguson to source VC deals. I also cover practical ways to source deals for those who are starting this career path. Read it here: https://lnkd.in/edvEsmVH #VentureCapital #DealSourcing #Investment #Leadership #Innovation #VC #Startups #Entrepreneurship #Networking #InvestmentStrategy

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Founders: Get Your First 5 Hires Right If you’ve started a new business, I would encourage you to talk to 10 experienced founders. Ask them what is most important to get right in those early days. I think you are likely to hear one message rise above the others: GET YOUR EARLY HIRES RIGHT For scaled-up companies, excellence in hiring is mission-critical. For earlier stage startups, it is nothing short of life-or-death. Even if you are an exceptional entrepreneur with a brilliant idea, a bad early hire (or even more, a bad cofounder decision) can tank you from the start. There are many reasons why founders make bad talent decisions early on. There are three that rise to the top: (1) OVERSELLING. As an early-stage founder, you are constantly selling your vision to everyone around you.  So when you meet people who might potentially join forces with you, it is tempting to blast them with your well-honed sales pitch. Not only does this sound a bit desperate, it also prevents you from doing the real work of VETTING talent. Keep in mind, a thorough vetting process is actually ATTRACTIVE to high performers, because it communicates your selectivity. High performers want to work with other high performers! (2) “BIRD IN THE HAND.” You have so many priorities as an early-stage founder. When you finally land on someone who can give you leverage, it is tempting to sign them up as quickly as possible so that you can get back to doing your day job. But hiring IS your day job. It’s your most important job. (3) SUBCONSCIOUS INFERIORITY. We have spoken to hundreds of founders about their journeys, and the early regrets and mistakes. When we talk about early hiring mistakes, we often hear something akin to “I had to take what I could get.” Even those who believe strongly in themselves and the power of their vision may harbor some insecurity that they must earn the right to top talent by hitting certain milestones. Not true. The world is full of incredibly talented individuals who are eager to jump in on the “ground floor.” It’s your job to find them, and this means (again) having the courage to ask people questions, from a place of deep curiosity. Over the past 10 years, we have trained thousands of leaders and hiring managers in scaled-up companies how to source, evaluate, sell and onboard top performers. We’ve also had the privilege of working with hundreds of early-stage founders and founding duos/trios/teams. In “scaled-up” land, our clients tell us stories about dramatic increases in hiring hit-rates. But with early stage companies, we hear stories about total breakthroughs. It is one of the reasons we have launched Talgo On Demand—to make hiring excellence accessible to companies with limited resources. If you’re an early-stage founder be warned—you will live or die by the first few talent decisions you make. And we would be honored to have the opportunity to help you make those decisions great ones!

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Founders rightly complain about a lack of transparency in VC 😠 This is particularly the case when it comes to legals and the information asymmetry between first time founders and professional investors To address this, we've just made our full term sheet downloadable from our website This isn't an overly simplified, one pager for marketing purposes, but the document we actually use for every investment we make We've also written a guide explaining the key terms, what you should accept and what to look out for We hope it helps demystify what should be one of the most exciting initial stages of the founder journey - getting funded 💰 Any questions, or anything you'd like us to share more about, please let me know in the comments #venturecapital #startups #fundraising #founders #entrepreneur #entrepreneurship #technology #innovation #business #ceo

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