T.J. Rylander

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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In overconnected environments dominant suppliers rapidly emerge and many become monopolies — think Google, Facebook, Microsoft, and Apple. When that happens, it is hard to wrestle free of a situation. http://ow.ly/YR5f30prqAF #CloudComputing #data #internet

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Some additional charts on the aggregate hyperscaler data from Q1. The charts below show 1) The aggregate net new ARR added on q quarterly basis. Q1 is always a seasonal low 2) The YoY growth in net new ARR in Q1. Q1 '23 was the "bottom" with AWS actually adding negative net new ARR (ie they shrunk), so the YoY comp is the "easiest" for the aggregate bucket.

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ISP Strategic Leadership, Engineering, and Operations As an organization scales, there is often a need to separate strategic technology leadership under the CTO from internal execution under engineering and operations management. This allows the CTO to focus on outward-facing duties while enabling streamlined operational efficiency. However, it's crucial to recognize the differing motivations and needs of these distinct technical roles. On one hand, engineers thrive on tackling interesting, challenging projects that push their abilities and knowledge. They value working alongside capable peers, genuine recognition of technical accomplishments, and contributing to products/services that reach the market. In contrast, operations teams should strive for repeatable processes, continual improvement, and driving efficiency at scale. Their priorities revolve around standardizing workflows, minimizing disruptions, and incrementally optimizing existing systems and procedures to maintain consistent service delivery as the company grows. An effective organizational structure acknowledges this dichotomy, fostering an environment that fuels engineering innovation while providing operations with the stability and process-orientation they require. Striking this balance enables the company to stay agile and innovative through its engineering efforts, while simultaneously scaling operational execution in a reliable and repeatable manner. Competitive compensation remains an important motivator across both domains. By properly aligning structural elements, motivational factors, and leadership priorities, a rapidly growing ISP can position itself to attract and retain top talent across engineering and operations, driving sustainable growth and success in the dynamic technology landscape.

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THE 2025 Planet43 NAVIGATOR / MENTOR / EIR REALITY CHECK (Because what gets measured shapes what we build next) Part 1: Your Delivery Truth - Hard numbers only - no fluff: - Scorecards completed: ___ - Founder meetings held: ___ vs required - Investment memo submitted: ___ required Average response time to founder emergencies: ___ hours Part 2: The Value Exchange Let's get uncomfortably specific: - Number of meaningful intros made (that replied): ___ - Deals in active discussion from your network: $___ - Technical roadblocks you actually solved: ___ - Hours spent in deep work vs. casual chats: / Part 3: The Mirror Moment - Raw truth time - rate yourself 1-5: - Showed up fully prepared: ___ - Delivered on promises made: ___ - Opened your real network: ___ - Added more value than friction: ___ Part 4: The Founder Impact For each founder you worked with: - Startup A: - Critical problems solved: ___ - Opportunities unlocked: $___ - Time to first value-add: ___ days - Would they want you as an investor? Y/N Startup B: [Repeat above] Startup C: [Repeat above] Part 5: The Gut Check Complete these sentences with brutal honesty: - "I could have delivered more value if..." - "The program would work better if..." - "The founder I failed most was... because..." - "My real value to Planet43 was..." The Redemption Corner - What would you do differently if we ran this again? Be specific. Sometimes the best feedback comes from making people uncomfortable with their own metrics. Remember: This isn't about feeling good - it's about building better. Each question should make an EIR/NAVIGATOR/MENTOR pause and really think about their contribution to the ecosystem we're building. Remember: The real magic of acceleration often happens 6-18 months after a program ends.  Reflections like this provide both immediate actionable insights and data points we can track over time to measure true impact. Together, we rise!

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Just finished reading "The Next Giant Leap" by Space Capital - a pioneering VC investing in the emerging Space Economy. The report speaks to how SpaceX’s Starship is more than just the most powerful rocket ever built—it is poised to reshape the global space economy in profound ways. With its immense payload capacity, reusable design, and lower cost per launch, Starship will unlock entirely new industries and transform existing business models. But how should industries and businesses evolve to align with this paradigm shift? 📈 Rethinking Business Strategies & Supply Chains - For businesses, Starship represents an era of mass-production over precision engineering. This means moving away from the focus on mass efficiency toward cost-effective, redundant, and scalable production. - In terms of supply chains, this opens opportunities for new players in manufacturing, materials, and space components. The demand for off-the-shelf parts and non-aerospace suppliers will rise dramatically. 💡 New Use Cases & Opportunities   The opportunities Starship unlocks go beyond launching satellites. - In-space manufacturing of high-value products like pharmaceuticals and advanced materials that cannot be created on Earth. - Mega-constellations of satellites for global broadband, expanding on what Starlink has already begun. - In-orbit assembly and servicing, allowing for larger space structures like telescopes or even habitats to be built in orbit, radically reducing costs. - Lunar infrastructure and resource extraction will become more viable, paving the way for sustainable human presence on the Moon and, eventually, Mars. 📊 What Should Businesses Do Now?   1. Embrace Redundancy & Scale – Instead of focusing on one-off, high-cost solutions, businesses should embrace redundancy and mass production.    2. Simplify Design – With Starship’s payload capacity, there is less pressure to optimize for mass efficiency. Simplified, scalable designs will allow for faster production and iteration cycles, akin to how SpaceX rapidly tests and evolves Starship itself. 3. Develop Strategic Partnerships – Collaborating with forward-thinking space startups, suppliers, and even non-aerospace sectors will be essential to capitalize on the opportunities Starship provides. 🌌 A New Era of Innovation   Starship will democratize access to space, lowering the barriers for businesses to create and scale. The next decade will witness breakthroughs in scientific exploration, energy production, and in-space transportation that we can only begin to imagine today. #SpaceEconomy #Starship #Innovation #SupplyChain #Manufacturing #SpaceTech #Entrepreneurship #FutureOfSpace https://lnkd.in/gNdbwXdq

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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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Outrider just raised $62M to scale up in autonomous yard operations. This is noteworthy because one of the best use cases for autonomous transportation is in closed-loop transportation networks, where there is not a risk of hitting pedestrians. We've seen self-driving tractors in mines, military applications, and now yard operations. Outrider's investors include Koch Disruptive Technologies, New Enterprise Associates (NEA), 8VC, ARK Investment Management LLC, B37 Ventures, FM Capital, Interwoven Ventures, NVIDIA's nVentures, and Prologis Ventures. Some of these firms are strategics, e.g. Prologis, who can help with adoption. Kudos to Andrew Smith and all involved. The future is bright for transportation innovation! #supplychain #transportation #technology #investment https://lnkd.in/eZ9t7Zhy

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Ross Haleliuk posted the fantastic article below. This is the world where I live day-to-day. At TechOperators, we invest mostly in early-stage cyber, but we do things a little differently, and we believe there are ways to invest successfully outside of pure Power Law math. The article argues that many security problems are too small for VC. I agree. I often try to convince bootstrapped founders not to raise venture because doing so can turn a successful, slow-growing bootstrapped company into a failed venture-backed company because, despite a large infusion of capital, it couldn't double every year. VC is not monolithic--not by stage, strategy, or style. Venture is often equated with "Tier 1 Venture". Ross argues that VC is not always great for early-stage cyber--and he is right. Bootstrapping AND VC work when incentives are aligned. Does it work for an early-stage VC with a <$200M fund to invest in several early companies at reasonable valuations, setting up the conditions for reasonable exits that pay off for both investors and founders? Yes. Does it work for $800M funds investing in seed stage at $100M+ valuations? Well, that depends! Power law says it does (for VC), but the unfortunate externality is that these rounds destroy companies and founder equity more often than not. There is a role for patient capital in this ecosystem to fuel successful companies that retain exit optionality as they scale--driving exit value for both founders and investors.

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Check out my recent post on why President Trump is the forcing function for us to solve the “Missing Middle” and catch the industrial Tsunami of onshoring coming to the US!

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First Amazon buys a datacenter powered by nuclear energy, then Microsoft buys #ThreeMileIsland, and now Alphabet Inc.'s Google strikes an agreement to buy up to seven #SMR's...is #nuclear the future #energy supply that will power #AI and #Cloud storage? #decarbonization #gigacorn #thegigacornhunter Climate Innovation Capital

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Re-industrialization is a trend currently taking place, globally, aimed at tackling the issues with having a global supply chain. As the graph shows, many of the skills needed to enable onshoring (or to "re-industrialize") are data + automation centered. Many of the leading Construction firm's have had this on their agendas for a while, as a means to give:   - reduced carbon footprints - surety of supply - issues such as geo-political conflicts + an over-reliance on a small number of trading partners has left some exposed - better visibility of supply inputs from a Governance / reporting perspective   This explains the notable uptick in the roll-out of data + automation led strategies, within major construction firms, we have seen over the last 12 months - as firms tackle input cost challenges + skill gaps.   Re-industrialization has also had a knock on effect with regards to #RealEstate sectors such as data centers and logistics - and the tech strategies + new techs in these sectors.   Reach out today to find out how we at The Proptech Connection can support you on your go to market tech strategy, in this changing landscape.   #futurism #Proptech #strategy Ivo van Breukelen Stuart Daun

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The future of VC is here: Scorecard.vc has relaunched with a TON of new updates! Free sign-up: http://scorecard.vc From automated matching and anonymous navigation to automatic deal syndication, KPI growth requests, and more, raising and deploying capital has become more efficient than ever. The result is a more powerful yet simplified experience, allowing Scorecard to act more like your VC virtual assistant. 🔥 🔥 🔥 Scorecard AutoPilot = Automated Matching 🔥 🔥 🔥 Our AutoPilot system will now find Investor thesis matches based for Startups, Funds, and SPVs raising capital, emailing you the results with quick actions to submit your review request. ✅✅✅ Anonymous + Verified Users = More Freedom & Trust ✅✅✅ All members on Scorecard are now fully anonymized, offering more freedom for Investors to review deals and engage with Startups, Funds, or SPVS raising capital. 👏👏👏 No More Profiles; Posts Only = Easier Navigation! 👏👏👏 Posts are free to create and used to run our scoring tech, and you only have to create your post once to start our automated matching. 🏁🏁🏁 Additional Investor Actions = More Updates 🏁🏁🏁 Investors can now anonymously view docs, request growth KPIs, soft-circle and syndicate deals, and message members raising capital ahead of requesting an introduction, and users will be anonymously updated with each Investor action. 🤝🤝🤝 Automated Deal Interest & Syndication = More Co-Investors! 🤝🤝🤝 For opportunities where Investors verify their interest, commit to invest, or deploy capital, Scorecard will automatically search for potential Co-Investors with a matching thesis to engage. ⚡⚡⚡ Credit System = More Value ⚡⚡⚡ Scorecard will now leverage a credit system for Startups, Funds, and SPVs raising capital. You will be given several free credits per month, and you can earn credits when new users sign up with your referral code. Members can also subscribe to an unlimited credit plan for an even more seamless experience. 📣📣📣 Scorecard Network = More Connections 📣📣📣 We will have some exciting updates soon, but our network of Investors, Startups, and Strategic Partners is growing quickly, with a “Source” tag to let you know where a member originated. We are even offering discounts and commissions to groups representing anyone in the VC space. We could not be more excited to launch Scorecard’s next stage of evolution. Know that we are continually focused on helping you succeed in VC, individually and as a community. Even more updates coming soon! Major thank you to our amazing team and community: Roger Derby Summer Crenshaw Navin Goyal MD Matt D.M. Watson, Ph.D., PMP Mike Torres LOUD Capital Buffy Alegria Ryan Retcher Darshan Vyas Nishad Parmar Marshall Kuremsky Blake Overlock Wolf Starr Jenny D, MD PhD Joey Glowacki Chad Warner Rory Billing Connor Billing Rivermint Capital Jesse Elliott LoudX

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Friends, Q2 was a quarter of progress and learning for us at HawkTower, where we invest in early-stage startups applying breakthrough computing technologies to maximize California's natural resource markets. Our focus is on technology-enabled interventions (e.g., AI-enabled geospatial radars for lithium-ion batteries in the waste stream) for critical, market-level imperatives (e.g., disaster prevention) that can drive rapid commercial adoption (e.g., placed on every recycling truck in the world). Our current investment priorities are: - Agricultural productivity and efficiency - Biomanufacturing - Labor and mobility automation - Waste stream optimization and decarbonization - Disaster prevention and management Here’s a snapshot of what we’ve been up to: Milestones and Investments: - In late April, we officially launched our fund, filing with the SEC. Yay. - By June, we completed our first fund close ahead of schedule, with backing from family offices, foundations, high-net-worth individuals, and organizations aligned with California's future. - Our portfolio now includes three early-stage investments (Farm-ng, Agriful Software, and Nexstera Tech). Strategic Partnerships: - We believe that startups operating closer to their customers and resources, especially in agriculture and biomanufacturing, have a strategic advantage. For instance, the Salinas Valley, a major agricultural hub, is less than an hour from Silicon Valley and serves as a center of thought leadership in the convergence of agriculture and AI (from Western Growers, Taylor Farms, and others). - Similarly, the North San Joaquin Valley is emerging as a biotech and agtech innovation hub, and we are proud to support BEAM Circular, a startup hub for the circular bioeconomy. Key Relationships: - Karen Warner, CEO of BEAM Circular, joined HawkTower as a strategic advisor. - Jackie Cruz, Ed. D. Cruz, Hartnell College’s VP of Advancement, advises on Salinas Valley and workforce development. - Ben Palone from Western Growers, with his technical background in agriculture, became a trusted advisor. - Matthew Hoffman from Driscoll's Global R&D team provides insights on global agriculture, product positioning, and investment strategy. - We collaborated with Monterey Bay DART for workforce development and automation in agtech. - Dominic Milano and the Milano Technical Group from Merced collaborated on key initiatives and advised us on investments. - HawkTower is participating in Santa Cruz Works's accelerator cohort as a mentor and advisor. Thank you Doug Erickson. - We published an overview of entrepreneurship across the UC system with input from across the University of California system. Moving into the fall, we remain deeply committed to supporting founders shaping California's future natural resource markets. Stay tuned and be in touch! : ) Db

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Excited to announce our investment in Alta Resource Technologies alongside Leonardo Banchik (Voyager Ventures) with participation from Orion Resource Partners, Overture Ventures, and WovenEarth Ventures. Rare earths are critical in products from magnets to ceramics and it's important for the US to develop its own supply chain. While the US has some of the best rare earth resources, separating them has historically proven expensive and environmentally unfriendly. Alta through it's computationally designed and optimized proteins allows the US to bring back rare earth production with a cleaner, lower capex, and lower opex solution - and that's just the beginning. Congrats to Nathan Ratledge and the entire Alta team. Read more here: https://lnkd.in/gbGnAJn3

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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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This is quite interesting advice and also quite a non-consensus view in the B2B software world. Cross-border founders who are considering the US vs International incorporation question should consider this as valuable input.

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The Data Deluge: A Massive Opportunity for Industrial SaaS Did you know that an average internet user generates a whopping 1 terabyte (TB) of data weekly? Now, imagine the scale of a smart factory, which can churn out upwards of 5 petabytes (PB) per week! 🤯 This exponential growth in industrial data presents a massive opportunity for innovative SaaS solutions. As factories become increasingly interconnected and automated, the need for robust tools to manage, analyze, and extract value from this data becomes paramount. If you're a founder with a vision to transform the industrial landscape through cutting-edge technology, let's connect! #IndustrialSaaS #DigitalTransformation #InvestmentOpportunity

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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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