Henry Ward

Fin Capital’s Fintech CEO Pulse Report is out! We surveyed over 50 CEOs and C-suite leaders of private companies from our portfolio and the broader fintech industry during June and July 2024 to get a quick pulse on what’s top of mind for fintech’s leaders. Here are some key takeaways: Optimism in the Air: More than 60% of CEOs reported being bullish or highly bullish on the fintech industry for the second half of 2024. Regulatory Changes on the Horizon: CEOs identified Cryptocurrency, Open Banking, and Buy Now Pay Later as the top three sectors likely to see increased regulation by the end of 2024. CEOs Want Business Development Support: Beyond capital and fundraising, business development support emerged as the top area where CEOs seek investor assistance.For more insights, including comments from my colleagues Ren Riley, Logan Allin, Matthew D. Mann, CFA, and Stephanie Perez, check out the full report here: https://lnkd.in/euHK8-9B

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LP Tip #20 out of #50: To re-up or not to re-up A re-up refers to an LP making an additional investment in a fund where they previously invested. Before we dive in I want to share that there are reasons an LP may not to re-up which are not in your control. Here is a short list: ➡️ The LP may have evolved their strategy and needs to scale back the #️⃣ of funds they invested in.   ➡️ The LP was never set up to re-up in the first place. ➡️ The LP could be an individual that found themselves in a cash crunch and overly exposed to venture.  I'm assuming that when you got your investment that the LP explicitly told you they do re-ups. Please do not assume they do. My expectation is also that the LP dug in to properly underwrite the fund. 🏴 Re-ups are not automatic. An LP will have to re-underwrite each fund. The speed of the re-up also depends on how much work was done in the initial investment, who led the investment, level of confidence there existed when that investment was done, and current pipeline of funds. There are 4 flags that may cause an LP to walk away. 1️⃣ Partner Breakups/Changes and Team Turnover:  The biggest risk in Partnerships are whether the Partners will stay together. One LP gave me a framework on how to think through this issue that has stuck with me. Partnership is like a marriage. If one feels there is potential for a breakup, does one believe it will be an amicable breakup? Or, does one believe the spouses will never talk again? If it is an amicable split that is manageable. The Partners can find a way to support the fund. Then the question becomes whether the LP wants to back the Partner/s that remain.  If there is high team turnover. The LP will want to investigate because team stability is used as a proxy for firm sustainability and ability to scale. 2️⃣ Fund Does not Execute on what they Sold the LP:  The LP “bought” something specific and typically it is because they were missing this strategy or wanted exposure to a strategy for the portfolio they were constructing. An institutional LP will invest and write a detailed investment memo flagging all the things you said you were going to do and then go back and compare when you come back to ask for money. If for example you pitched a generalist seed stage fund and you show up asking for money sharing that you invested in deeptech at A that will cause alarm. The same can be said for the number of companies you promised to invest in or check sizes you wrote. If there are big differences LPs will want to know why. 3️⃣ Bad Actions  The fund manager/s does something that is unethical. This is a no go for an LP.  What if the situation is not clearcut? This is different for everyone and requires discussions b/w GP and LP, but most LPs don't want headline risk. 4️⃣ Continuous Underperformance  If it's early days an LP will look at some key indicators to see how you are progressing over time.

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Pleased to share that Fin Capital’s Fintech CEO Pulse Report is out! Fin Capital surveyed over 50 CEOs and C-suite leaders of private companies from our portfolio and the broader fintech industry during June and July 2024 to get a quick pulse on what’s top of mind for fintech’s leaders. Here are some key takeaways: - Optimism in the Air: More than 60% of CEOs reported being bullish or highly bullish on the fintech industry for the second half of 2024. - Regulatory Changes on the Horizon: CEOs identified Cryptocurrency, Open Banking, and Buy Now Pay Later as the top three sectors likely to see increased regulation by the end of 2024. - Headwinds persist. Despite overall bullishness on fintech, CEOs report a weak IPO environment and flag that macroeconomic volatility, regulation, and high interest rates remain top challenges for their companies. However, with abating inflation, CEO’s believe we could see rate cuts begin in September, which could positively affect asset values and market buoyancy, including the IPO window. For more insights, including comments from Logan Allin, Christian Ostberg, Matthew D. Mann, CFA, and Stephanie Perez, check out the full report here: https://lnkd.in/gK6usfwM

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Want a front-row seat to the frontier of tech? We’ve got the role (or two) for you! We’re expanding our frontier-tech team at Blackbird by hiring a Frontier Tech Investments Associate and Foundry Fellows! Got questions? We've got answers... 1️⃣ What are the roles? 🧪 Associate = a full-time VC investment gig in our Blackbird Investments team, working directly with me. We’re looking for someone with a science and/or engineering background and more curiosity than they can handle. You’ll grow your own investment brand and practice, support our portfolio founders, and will help build Foundry, our early-stage frontier-tech accelerator. ✨ Foundry Fellow = a casual/contract gig in our Blackbird Investments team, ~15h per week for 3 months. The Fellowship is ideal for PhD students and ECRs who want to learn more about startups and VC. You’ll go deep on emerging areas relevant to your expertise (or curiosity!), get a front-row seat to groundbreaking companies in those areas, build out your non-academic network, and develop a solid writing practice. 2️⃣ Why are you hiring? We love frontier tech, and we’re ready to grow our team. 3️⃣ Wow, it’s so great that you’re starting to look at deep tech! Look, we get it: we don’t make a lot of noise about our frontier tech investing. Buuuut we’ve been deep-tech investors since we backed Tim Kentley-Klay to found Zoox back in 2014—we’ve been on incredible journeys with PsiQuantum (building the world's first utility-scale quantum computer right here in Australia!), Inventia Life Science (transforming drug discovery with high-fidelity cell models), Remedy Robotics (surgical robots for remote endovascular procedures), Opto Biosystems (minimally-invasive neural implants to treat cancer), and more. We believe that frontier technologies, and great frontier-tech investing, will be part of the solutions to the greatest problems humanity faces today. 4️⃣ When do applications close? May 31st at 11:59pm AEST. 5️⃣ I have more questions! I’m sure you do! Clare Birch and I are hosting an AMA to answer any and all questions about these roles. Want to know what a week in the life of our team looks like? What’s keeping us up at night? What our ideal candidate looks like? Come along and find out - registration link in the comments 👇 Apply for these roles: Associate - https://lnkd.in/gCfj4EUJ Foundry Fellowships - https://lnkd.in/gj6ATZVZ If you know anyone that we should meet, send me their details! Cameron Elise Ben Andrew Robin Joseph Adelaide James Olivia Lucinda Raghav Jesse Christie Mohamed Tom Amee Pablo Haya Loong Hon Joshua Benjamin Megan Harry Denzil Matthew Diana Daniel Tom Deanna Justin Amar Lilly Stone Thomas

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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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Q3 is out and Q4 is in!  This is a great read about Base10's strategic switch showcasing how Carta is simplifying fund administration for emerging managers, which is especially important now rolling into the year-end busy season. 

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Today, GTMfund’s is excited to announce to launch of Operator, its first incubated company. Max Altschuler (founder of GTMfund) teamed up with co-founder Adam M. (design engineer and 0-1 builder) and co-founder Mark Kosoglow (Outreach employee #1 and former SVP of Global Sales) to create Operator.ai alongside an insanely talented team Pleasant Middelhof, Jeremy Jonas, Carl Gunderson. We've entered a period called “The Great Ignore”. Spam and irrelevant, poorly-automated outbound campaigns are running rampant.   Operator gives you an easy-to-use Growth Engineer that allows you to build and enrich lists with accurate data, and run experiments and queries using AI to generate highly targeted outreach.    Check out their website to get updates, early access, and see how they are taking the world back to 2 touches meant to attract buyers into conversations that convert, instead of 20 touches meant to make sure you hit your activity number: https://www.operator.ai/

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The state of venture capital is wild right now. We are witnessing a surge of innovation across the spectrum: - Funds merging - VC doing PE - PE doing VC - Secondary funds - Buyout funds - Spin-out funds - Debt funds - Continuation funds - Infrastructure funds - GP turnover - Hard Tech surging - Family Office uptick

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Kettleborough VC has been active for ~6 years, invested in ~30 companies, gone through ~80 funding rounds, witnessed ~12 exits including ~4 instances of partial principal erosion, seen ~4 seed to $100M journeys, tracking ~29% XIRR across the portfolio. A couple of IPOs from the portfolio surely seem very much in line ahead.

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For a young software company, what does a dream end-market look like? A few great signals off the top of my head: ▶️ Low NPS of incumbent solutions ▶️ Lots of manual / lightly-digitized processes ▶️ Many buyers (i.e. top 3 don't control the market) ▶️ High ability to pay (decent margins and trendlines) What else should be on the short list???

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🚀 PrivTech is one week away, and we only have a few spots left. We designed this conference to deliver a multi-value experience for LP's. While many AGM's cover familiar performance metrics and quarterly updates, they often fall short in offering the deep insights and learning opportunities that truly empower LP's. Our goal is to go beyond the numbers, providing a strategic view into the sectors we invest in and the trends shaping them. PrivTech brings together over 100+ private tech investors, industry experts, LP's, family offices, RIA's, corporate venture teams, and downstream GP's — creating a nexus for insight sharing and powerful connections. By gathering this incredible group, we're able to share knowledge of the markets we serve and add value in unique ways. This moment is critical. AI is moving too fast for soundbites alone, and spending a single day to take stock and prepare for the next wave of AI-driven value creation — the Applied Layer — is worth every minute. Together, we're witnessing the dawn of another industrial revolution, and conversations like these help shape our thinking, acting, and investing. Don't miss out. Join us for a transformative day! DM me as soon as possible if you have interest in joining. #PrivTech #Seed #VentureCapital #Investing #ArtificialIntelligence #AppliedAI #Networking #Innovation

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Robinhood's stock closed yesterday above its 2021 IPO price for the first time in 3 years. Vlad Tenev leadership has been steadfast in the years after the GameStop saga. Moments like that coupled with the ‘22 market correction were hard things to manage a large team through, but he did it. Most importantly, he got them back to doing what they do best: shipping beautiful, industry-leading financial products at a crazy pace. He announced recently on a podcast they now have 8 product lines doing over $100m+. The laws of compounding will be in their favor. It will inevitably be a $100b+ company.

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VC platform teams rarely add meaningful value to portfolio companies. They’re mostly a tool for GPs to justify raising larger funds and collecting higher management fees.

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We are excited to back EnFi, Inc in their first round of financing. They just came out of stealth and announced a $7.5 million raise from our good friends at Unusual Ventures, Boston Seed Capital, Argon Ventures and us at Impellent Ventures. Scott Weller spoke with me about his new idea around revolutionizing credit risk analysis through AI, begrudgingly bemoaning getting pulled back into yet another startup :) He and Josh knew there had to be a better way to get risk analyzed fast at the level of the enterprise after the great SVB failing occurred and left thousands of founders scrambling away from their multi-covenant loans. They needed to move their money but couldn't because other financial institutions still relied on a clunky, long process of assessing loan-worthiness. Enter Enfi. I asked him to invest. Scott was another one of those entrepreneurs we'd back no matter what they were doing. It took a while to get him and the indomitable Joshua Summers to make room for us. But they finally relented, because I'm annoying. Very, very annoying. Like a chihuahua with a kazoo, except worse. Ask anyone... EnFi’s platform is revolutionizing credit risk analysis, underwriting and portfolio management through advanced AI and real-time monitoring for complex credit instruments. Their innovative approach to Continual Risk Analysis provides institutional and private lenders with deeper insights and automation, enhancing decision-making and risk management. Congratulations to co-founders Joshua Summers and Scott Weller, and the entire EnFi team. We are proud to be part of your journey and look forward to your continued success! #Fintech #AI #Lending #CreditRiskManagement #Innovation

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I read two good Substack posts earlier this week about Cash App Pay, one from Jevgenijs Kazanins and the second from Samir Desai. If your a payments nerd like me, you should check them both out. Some really interesting perspectives that obviously overlap with a substantial portion of the thesis behind Tandym. Networks, and the products that run on them, are getting disintermediated. It started in earnest with BNPL, and it’s only growing with experiences like Cash App Pay and (to a much smaller extent, for now) Tandym.

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LP Tip #12 of #50: A bad data room can undermine LP confidence  As I shared yesterday it is important to put effort into your data room. But it is also important to be aware of the mistakes some fund managers make when sharing their data room so you don’t make them.  The following 6 elements are what I believe make for a bad data room. 1️⃣ Numbers do not tie - Make sure the numbers you reference in your deck for example tie to your track record. You would be amazed at how often I find mistakes in performance calculations. Fund managers have the responsibility of managing other people’s money so it is important to get the numbers right.  2️⃣ Investments omitted from track record  - Please avoid cherry picking investments to make your angel or fund performance look better than it would be if you included all investments. If you want to present a sampling of investments then add a footnote.  3️⃣ Typos in materials  - I recognize that there will be minor imperfections in materials. But you do not want to be in a position where the majority of your documents have typos.  4️⃣ Disorganized documents - The data room navigation should be intuitive. The more time an LP is spending on finding where a document lives or reaching out to you to be pointed in the right direction impacts the diligence timeline.  5️⃣ Missing information - You want to have the right amount of information for an LP to properly do their job and underwrite you. Some LPs will do lighter diligence while others will want to dig in. I recommend creating a comprehensive data room with every document you think an LP could possibly need. And, then unlock what the LP requests and mention you have extra materials and ask if including those would be helpful to share.  6️⃣ Outdated materials - The diligence process can take a few months so you may want to ensure that your information is current. Tomorrow, I want to discuss communicating bad news to LPs. 

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Make sure your investors and funding partners don’t inadvertently kill your business. Beyond just putting cash into your company your funding partners need to fall into one of the three following buckets: 1. SWEET MONEY: funding that’s such a sweet deal you can’t possibly turn it down. Supportive grant programs with non-onerous funding requirements fall into this bucket. 2. SMART MONEY: people who can make connections, add legitimacy, guide you, and know how to execute investments with standard terms. Savvy angel investors and professional investors fall into this bucket. 3. SHHHHHH MONEY: silent investors who want to support you and are willing to lend a hand when asked fall into this bucket. Funding partners can create bad corporate structures, distract you from your customers, or create burdensome requirements and kill your company if you’re not careful. We’ve been very fortunate to have amazing funding partners, when I looked at why it’s so easy to work with them it’s because they fall into one of these three buckets.

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