Allen Burt

I’ve advised dozens of early stage startups, and as a founder, grown my own startup to a multi million dollar run rate. GTM planning intimidates founders across the board but it’s actually not as complicated as you think! Here’s what to focus on: ▶ Market Segmentation and Targeting    ◾ Identifying and prioritizing the right market segments is fundamental to everything else. ◾ Who is your target market and audience? ▶ Value Proposition ◾ Clearly articulating why customers should choose your product is essential for differentiation and sales. ◾ What is your message? ▶ Product-Market Fit ◾ Ensuring your product actually solves real customer problems is critical for long-term success. ◾ How do you know people want to buy what you’re selling? Have you talked to your customers or potential customers? ▶ Customer Acquisition Strategy ◾ Defining how you'll reach and convert your target customers is vital for growth. ◾ What channels will you use to find customers? ▶ Pricing Strategy ◾ Getting pricing right impacts both customer acquisition and revenue sustainability. ◾ What are customers willing to pay for your product or service? Could you cross-sell or upsell? The key to building an effective GTM strategy is about having a clear focus that defines who you're selling to, what you're selling, why it's valuable, how you'll reach customers, and how you'll make money.  For all of the GTM experts out there: share your thoughts, lessons, and advice in the comments! What have you learned from your own GTM journey?

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Valuations are starting to (only slightly) be in check. Investors looking for revenue, quality of revenue, margins, and repeatable GTM. This has the best founders focused on what matters, and reaching out to their Boards and advisors for real advice and guidance. Good stuff.

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Participating Vs Non-Participating Liquidation Preference. This is a topic that a lot of folks don't understand very well, explaining via a simple example below: Assumptions: Investor 1 - Owns 10% of the company for $10 Founders - Own 90% of the company Total share value and price - $100, $1 per share Purchase offer for company - $20 Participating Liq Pref: Investors receive $10, being their investment amount. $20 - $10 leaves $10 to be split. Investors receive a further $1 (10% of $10) Founders receive $10 - $1 = $9 Non-Participating Liq Pref Investors have an option of exercising their preference, receiving $10 OR Investors can convert and receive $ equal to shareholding, 10% of $20 = $2 Investors will choose to receive $10 Founders receive $20 - $10 = $10 This is a base example of how non-participating is significantly more founder friendly, especially for non-exceptional exit outcomes (also the defacto at Artha Group) #venturecapital #startups #founders

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Tons of new business owners are missing out. You can get up to $100,000 in AWS credit (as in, no-payback) to build a proof-of-concept if you have an idea and a website. AWS Activate is the program. If you're a founder and you're looking to build cost-effectively before you have paying clients, check it out.

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Hot take: I think startups die because the founders stop having fun doing them I recently listened to this podcast on Lennys Podcast called "Lessons from 1,000+ YC startups: Resilience, tar pit ideas, pivoting, more" with Dalton Caldwell, a managing director at Y Combinator. He's probably seen more startups go through the journey than any other person in the world. He talks about how the main thing that separates the startups that die and the startups that become successful is not necessarily skill, experience, runway, or any of the other typical factors we may think about. It's the irrational perseverance of the founders who, despite confronting near-death experiences with their startup, still continue. And that irrational perseverance comes from their true love of their customers, their product, their team or a combination of all. They are STILL having fun despite the challenges. AirBnB is a great example of this where they nearly died 3 times and all signs should've pointed to shutting down. But they just loved working with each other and did anything they could do stay alive - even famously selling Obama O's cereal. And we've had a few pivots as as company as well and had moments where I had to question...is this all worth it? Yet, time and time again, I keep coming back to how much I love working with our team, and love solving problems for our customers. I am deeply committed to creating the tools of tomorrow that empower investors to take control of their financial lives. I am personally on a mission to help investors in Singapore aggregate and automate their personal finances across any account they hold - banks, CPF, brokerages, crypto, real estate and more. I would love to hear what other's think of this as well - if the main question we should be asking ourselves as founder is..."are we still having fun building this company?"

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New VCs aren't joining the game. First time VC investments are at an all time low. While this is not ideal for some startups who will have less access to capital it's a long term positive for the entire industry. Things got way too hot a few years ago and too many new VCs piled in, raising valuations to a point where ROI was near impossible on some deals. I feel like every celebrity had their own fund. Now we're probably over-correcting on the other side, but hopefully will find market equilibrium soon. We're seeing consistent demand increase for our portfolio companies deals since the nadir. To learn more about our early stage tech portfolio in South and Southeast Asia as well as our fund go here: https://lnkd.in/gfxsVB4A

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How to pitch: The company has zero traction —> “We’re early” You only have 2 customers —> “We’re working with design partners” You currently have no revenue but hoping some pipeline finally closes —> “we’re on track to exit this year at $3M ARR” You’re in the natural kill zone of a FAANG —> “We view them as partners rather than competitors” There’s no way the tech can actually work —>“We’re manifesting the future” And of course: One of your developers uses Co-Pilot to write some front end code —> “We’re an AI company”

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Fundraising advice for new VC fund managers: Increase your minimums 2.5x-5x. This often leads to better results, as many first-time LPs tend to do the minimum. Remember, you can always make exceptions for "strategic" investors.

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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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After building 5 businesses over 20 years, I launched a VC fund with 2 friends & colleagues. Since then, we've funded 15+ companies & deployed over $20M, backed by a powerful community of founder/operator LPs. Here's our story, and how you can create your own VC fund in 2024: In 2021, my dear friends & fellow founders Josh, Kurt & I were hanging out in Mexico. We discussed our experiences as entrepreneurs & what our dreams were for the future. It was clear that supporting founders was a key priority. So we decided to build a new kind of investment firm. We pooled together 60+ experienced founders, operators & friends to invest in tomorrow's top entrepreneurs. And called it The Family Fund & Founder Community. Would you love to do this? Let's dive into how to create your own VC fund: 1. Invest first Invest for 5-10 years & create a successful track record. Whether this is angel investing with your own money or serving as an investor for another firm, you have to cut your teeth on the street. Josh and I had been angel investing for ~10 years before launching F3C. 2. Build a network Build a network of people who trust you & like doing business with you. Raising money from people primarily comes down to trust, and trust is created through: (a) Competence: People must believe you have the skills/access/intelligence to invest in the right companies. (b) Authenticity: They must feel that they’re dealing with the authentic you and someone comfortable in their skin. (c) Empathy: Care for others and want the best for them, not just for yourself. 3. Access is king Put yourself in a position where you have great access. Regardless of what people tell you, access to the best deals still matters most when it comes to investing. If you don’t have access, nothing else really matters. Here's how to create access: Put yourself at the intersection of where deals happen. This is either at an existing PE/VC firm or in another type of company whose business is to be around founders before or after they’ve raised money. 4. Gain specific expertise in a field Note: Just because you're a great founder or company builder doesn't mean you'll be a great investor (founders are often too optimistic when they first invest). But deep experience & expertise where you're investing is a requirement. My partner Kurt built & sold Vital proteins. He is a CPG product, manufacturing & brand wizard. My partner Josh is a master of community, talent & connection. The best I’ve seen. And I live & breathe marketing, GTM strategy & scale (with an obsession around health/wellness which is where we invest). What's your advantage? This isn’t an exhaustive list, but it can get you started on the right track. — If you enjoy this, ♻️ repost to help your network. Follow me Sean Kelly for more insights on health, investing & entrepreneurship. To learn how to achieve breakout founder performance sign-up for my free weekly newsletter: https://get.founderiv.com

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1% of VC backed startups will make it past $100M ARR But does that make the other 99% a failure? Let’s dig in to the numbers… I was fortunate to have Chris Tottman introduce me to Stephen Millard who analyzed 117K startups founded between 2005 and 2022 → Of those 117K startups founded → 31% (37K) were VC backed → 12% (13K) raised $3M+ Of those 13K startups, 1.8% (243) either made it past $100M ARR and/or achieved a $1B+ exit → 0.5% (71) had a $1B+ exit without reaching $100M ARR → 1.2% (168) made it past $100M ARR → 109 of the 168 did it <10 years I was excited to talk to Stephen because he shares my deep belief… 💡 Every company is a snowflake, but we should be able to identify the key operating markers of (capital efficient) venture scale growth to give startups a better roadmap and increase the probability of success Okay... Let’s talk about the two elephants in the room 🐘 Why do VCs care about $100M if only 1% make it there? 🐘 Does that make the other 99% a failure? -------- 🐘 Why do VCs care about $1M to $100M in 7 to 10 years? Because venture capital is a power law game They understand that a VERY small % of companies will make it to $100M and they’re job is to figure out which ones have a better chance of getting there So that’s the lens they look through Now… Because there’s a lot of future risk with every startup, betting on anything less than a *potential* to reach $100M would put a glass ceiling on their fund that goes against their power law objectives Series A is the inflection point of the venture scale curve and where VCs are trying to build conviction on a startups *potential* to reach $100M -------- 🐘 But does that make the other 99% a failure? Absolutely not ❌ I like how Stephen phrased it: many companies have great outcomes at smaller revenues, especially if they have not raised too much capital and / or strike a balance between growth and profitability And this has become my life’s work over the past 5 years… → I don’t believe venture is a $100M or bust binary game But we need clearer milestones to truly understand where we are in the journey that we can check ourselves against every month/quarter/year so we can continually make better informed decision on a go-forward basis The chances of becoming a pro athlete is <1% in any given field But that doesn’t mean we tell kids not to dream of the big leagues? Of course not... But it does mean we need to help them re-evaluate their chances of making it every month/quarter/year -------- Okay, so where can you start? Focus on unlocking milestones and keep your cap table as light as possible until you're ready for step 3️⃣ 1️⃣ Problem Solution Fit 2️⃣ Go to Market Fit - unlocks Series A 3️⃣ Scale PMF #1 - Series A use of funds 4️⃣ Scale PMF #2 -- ♻️ Repost to help a founder in your network Click 'visit my website' at the top of this post to register for my free Unlock your Series A session on how to navigate VC expectations in this market

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About to go live... Startup Studio portfolio VC fund. $8.5 mil. with room to oversubscribe. All deals warehoused and ready to allocate. Built in equity on day 1. Low 1 time management fee. $35k minimum investment. 506c so accredited investors only. GP's are personally invested. Multi tiered exit strategy in place. Liquidity options available at year 2. *** This presentation of Sidecar Portfolio Fund (the “Company”) is for information only and shall not constitute an offer to buy, sell, issue or subscribe for, or the solicitation of an offer to buy, sell or issue, or subscribe for any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.***

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Fundraising sucks. VCs often say no to investing in your company for so many reasons that have nothing to do with the actual quality of your company. One thing that was never intuitive to me as a founder but has become very obvious to me as an investor, is that timing, as much as anything else, is one of the biggest reasons VCs pass on investing in a startup. As a founder, I had always been told that deals go to die in summer months and around the winter holidays when investors’ kids are off for school breaks. Makes sense. When you’re competing against vacation, vacation is gonna win ten times out of ten. But as I became an investor, I saw that there were so many less obvious timing issues that kill deals too. If you’re a founder, you should watch out for these scenarios as they might save you some time or heartache going down the path with investors who are unlikely to invest in your company. 1. You pitch the VC when she is fundraising. Just like founders, VCs have to fundraise every 2-3 years, and when they do it, it can take up 50%-75% of their time and last for 12-18 months. During this time, they’re still typically investing in startups but chances are they are going to be more focused on closing their own fund than investing in your company. 2. You pitch the VC when she is already deep in diligence with another company. VCs will often look at companies in batches and stack rank the companies in their pipeline against one another. So for example, if a VC is pacing to invest in two deals per quarter, and you pitch her at the end of the quarter, when she is already far into diligence with a few other companies, it’s going to be hard to beat out those companies because the VC has already put in so much work on them and unless what you’re offering is significantly better, she is not going to want to start the entire process all over again. 3. You pitch the VC at the wrong time in their capital call schedule. Let’s say a VC has a $100M fund. She doesn’t actually have all $100M in the bank to invest at any given time. Typically she will “call” the capital from her own limited partners (“LPs”) over a period of 2-3 years. Some will call the capital from their LPs in real time when they have an investment they want to make. But many others are on a pre-set schedule where they’ve set expectations with their LPs that they are only going to to call capital at certain dates over a 2-3 year period. If you happen to pitch a VC at a time when she’s deployed all her existing capital and she’s not making a new capital call for 2-4 months, that VC is going to be more likely to just pass on the deal due to bad timing.

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MORE VCs SHOULD DO ENTERPRISE SALES Lately, I've seen many younger venture investors take new operating roles at startups. They are buying call options on their careers when the opportunity cost of being in VC is lower. I'm a big fan of this trend. It's going to make the next generation of investors more empathetic and impactful. However, most folks are going into product, strategy, and operational roles. There's nothing wrong with these spreadsheet-heavy jobs but we need more VCs in enterprise sales. The future of early stage cap tables will look like a village of helping hands, each investor bringing their own superpower and unique value add to the table. The contrarian way to invest in your career is to build a portfolio of diversified experiences in your 20s. And...you may also just love selling. Enterprise sales is not just a sales motion, but a set of experiences, principles, and systems that also apply to fundraising, selling your company, winning deals, hiring executives, leading teams, and countless other P2P-centric responsibilities. It is a foundational startup skillset like writing code. When you really immerse into enterprise sales, you see the world differently. You realize that every outcome you seek is not decided upon by one person but typically a group of people. You learn to build systems around people, process, and outcomes. You habitually forecast every scenario. You anticipate deals falling apart. You learn how to ask great questions. You learn the art of negotiation. You develop extrasensory perception for people. All of these are formative skillsets that will be accretive for your career. So if you're an investor contrarian enough to jump into enterprise sales, please reach out. Across my networks, I'd love to help you connect to some great startups hiring.

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🔎 This is a well done analysis. 🔎 I gave a founder pretty similar advice yesterday about what to target and expect at the seed. And while I'm seeing founders raise seeds w/o any revenue, those founder are either repeat founders or strong pedigree founders (like AI Phd's with time at Google etc.). So for the typical founder, shooting for at least $250k in true ARR with 300%+ growth or more is a good target. And the more the more likely you are to raise funding. 🎯

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A lot of folks have been asking about how to get into angel investing, where to start, how to find and pick startups. This is also the best way to break into the startup / VC ecosystem, so wanted to post a quick thread below (not financial advice): Why angel invest? - Meet smart and amazing founders - Learn about the bleeding edge of tech - Be financially incentivized to advise / support companies - Work more closely with VCs - Financial upside in the winners Here's a few tips on how to get started: 1) Just get started The first investment is always the hardest. Is this the best company? How do I pick them? What if X (market, team, product, GTM, etc.) doesn't work? The best place to start is with your close network, people you trust that you think are the top 1% of people you've worked with in your career. If you have strong conviction in them, chances are that it's a good place to start. 2) Budget accordingly VC investing is risky already, angel investing is even more risky since you're dependent on other institutions to fully fund the company you're interested in for another 2-3 years to be default in the game. If you make great choices, your money will still be locked into good investments for a long time horizon, so be judicious about your budget. 3) Build a basket, start with what you know It's a common saying in VC that 2/3 of investments will go to zero, and a small % of investments will return the entire fund. This is true. Because of that you'll need more shots on goal, both to build your portfolio to maximize success and to get more reps in so that you yourself become a better angel investor. Start in the areas that you know well with people you know well, and then expand from there. Chris Dixon has a great post on the economics of VC from a decade ago that still rings true today. https://lnkd.in/gY2gSBFD 4) Follow a round You want to make sure your money isn't dead on arrival. If the company is a few months from running out of money, or isn't able to get a round together, then that's obviously existential to the health of the startup. Wait for an institutional investor to lead the round and establish some runway as a standard de-risking move. 5) Use SPVs if you need Special purpose vehicles or syndicates will bundle smaller angel investors into a larger single check to make it cleaner on the cap table. If you're writing smaller checks (<$5K) then these can be useful to reduce paperwork / legal for a small fee. Angel List and others have good resources for understanding these. 6) Be upfront about your commitment Founders may want you as an angel for your strategic advice, relationships, and support. Be thoughtful about how much time, network, and resources you want to commit, and be upfront about it. It's okay if you'll only chat once a quarter, but don't promise biweekly product discussions and go back on your word. Reputation is everything. What'd I miss?

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21 Ways to Kill Your Company Day 9: Poor Fundraising Strategy This means two things - be realistic about the benchmarks you need to unlock your next raise and then raise enough money to hit those milestones. Be great (and realistic) with financial planning. Don't forget those extra five months you typically need to raise. #21waystokillyourcompany #fundraising #venturecapital

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FOUNDERS STOP DEMOING On net, early stage founders should stop demoing their products on the first sales call. I've watched dozens of Fathom videos of pre-seed and seed stage founders I've invested in, and its the number one culprit for wasting time and derailing your sales motions. Your product demo is SACRED and should only be shown to qualified buyers. In complex sales, the goal of your first sales call is NOT to sell, but determine whether you are talking to a qualified prospect: an influential champion at a company with a real usage case, that will actually buy your product in a reasonable amount of time. Demoing can incite an excitable stakeholder with no power, and organizations with no real need, to progress a deal. This false sense of progress creates an escalating sense of sunk cost that makes it hard for founders to abandon the deal. You end up spending a ton of time in follow up hell chasing a bad prospective design partner. In the early stages, all you have is time and resource costs. Don't squander it chasing bad customers. While its tempting to use slides or a product demo as a crutch, it completely derails your ability to run a productive "discovery" call. FOCUS on the conversation and if necessary prepare a list of 20 questions, sequenced by batches, that unlocks true understanding of the stakeholder's role / power, their organization buying process, and whether they may have a real usage case and urgency to make a purchasing decision in the next 2 quarters. If they don't, throw them in your nurturing campaign and move on. Your time is better spent focusing on setting more meetings.

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Good state of SaaS here

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