Ryan Bonifacino

Boards of Directors – How Relevant To The Business Is The Board? In 2014, activist investor Starboard Value successfully replaced all 12 directors on the board of Darden Restaurants. The following shows the Darden incumbent board at the time of Starboard's proxy fight, Starboard’s value creation plan initiatives, the Starboard director nominees and the before and after performance (revenue, EBITDA, EBITDA margin and stock price). Note especially the direct relevance of each Starboard nominee to the industry or some aspect of the value creation plan. How often do you see this level of relevance on public company boards?

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Darden Restaurants recently reported its quarterly results, showcasing resilience amidst a challenging environment. While Olive Garden faced a decline in same-store sales for the second consecutive quarter, Darden's overall performance remained steady, with earnings per share surpassing expectations at $2.65 and revenue reaching $2.96 billion. Looking forward to fiscal 2025, Darden projects a promising outlook with expected earnings per share between $9.40 and $9.60 and anticipated net sales of $11.8 billion to $11.9 billion. The company's LongHorn Steakhouse segment notably reported a 4% increase in same-store sales, underscoring Darden's effective management and operational strength. With plans to invest $550 million to $600 million in capital expenditures, Darden is poised to enhance its offerings and maintain its competitive edge in the market. Read More Here: https://lnkd.in/eFgDC97p #hospitality #restaurants #technology #innovation Branded Hospitality Ventures Angelo Fama Jr. John Espy Dave George Daryl L. Cunningham Lisa McDowell Robert Anderson Ali Charri

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Who will be the next supply chain consolidator? From 2011 to 2021, XPO scaled up from $70M to $20B, fueled by a combination of organic growth and 18 acquisitions. The model was extremely successful. But the supply chain ecosystem remains extremely fragmented. There is plenty of room for new consolidators to emerge as winners. In the food supply chain software arena, one emerging acquiror is GrubMarket Inc. They have built a network model to help food suppliers automate their relationships with their customers. GrubMarket has acquired over 100 companies to date. They are expecting to exceed $2B in annualized revenue. And they just announced their latest purchase: Butter 🧈, a SaaS platform to automate food distribution. Kudos to Mike Xu, Winston C., and all involved! #logistics #supplychain #consolidation https://lnkd.in/emY4wpsy

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Are #VC exits in standstill and what does it mean for the #CPG companies? Just a handful of large VC-backed companies have gone public since Q1 2022, exiting at only $70bn cumulative worth. i) less than the value recorded in any quarter in the record-breaking 2021 ii) staggering 90.5% decline from 2021’s record highs of $750bn iii) and more importantly the first time the figure has dipped below $100bn since 2016 What does it mean for CPGs? 1. Strategic Acquisitions: As VC-backed companies struggle to justify their high valuations or demonstrate the necessary fundamentals for IPOs, they may get forced to sell at lower price point to a strategic acquirer, and #FMCG players are well-positioned to capitalize on this lack trend 2. Investment opportunities for CVCs: smaller rounds and less competition may enable CPG companies to get stake in the most promising start-ups that would otherwise be quickly scooped by Sequoias and Tigers of this world ;) 3. Less 'well-funded' competition for incumbents: less exits and lower valuations means the large upstarts challenging leading FMCGs will need to be more frugal with resources potentially stifling investments As the saying goes, “In every crisis lies an opportunity.” CPG leaders who will navigate the best this environment may end up winning disproportionally (as we were writing on the topic) FMCG CEOs: 2023 M&A Report – Seven Key Learnings & Seven Predictions For 2024 https://lnkd.in/dT5A-jGZ To receive the corresponding deck, pl. leave your name in comment To get all our insights, follow us/ subscribe to our CEOs newsletter: https://lnkd.in/eR8vDpvE #strategy #zerobasedgrowth #mergersandacquisitions Frederic Fernandez & Associates

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Board of Directors - insights from "The Essays of Warren Buffett" Buffett’s principles for Boards of Directors emphasize the importance of independence, accountability, and a focus on long-term shareholder value: - Long-Term Focus: Boards should act in the long-term interest of shareholders - Board Composition: Boards with mostly outside directors and select members for business savvy, not prominence or diversity (PE insight: CROs on the Board) - Regular Evaluation: Outside directors should meet without the CEO to assess performance True Independence: Directors must have equity in the company to align with shareholders' interests P.S. This is a very insightful book structuring Warren Buffett's shareholder letters by specific categories - here are the top summary takeaways from the rest of the book: Investment Discipline – Maintain patience and discipline, avoiding speculative investments and market timing Business Quality – Seek businesses with a durable competitive advantage Management – High-quality, trustworthy management & look for managers who think like owners Corporate Governance – Transparent communication and fair treatment of all stakeholders Risk Management – Avoid excessive leverage and maintain a margin of safety to minimize risk and preserve capital Fundamentals – Focus on fundamentals rather than market trends Economic Earnings – Focus on economic earnings and free cash flow rather than accounting profits for a true picture of financial health Long-Term Focus – Long-term investments and value creation vs. short-term gains Capital Allocation – Efficient capital allocation is key - reinvest earnings wisely Market Irrationality – Recognize and capitalize on irrationality as "Mr.Market" can be inefficient in the short term #investing #markets #business #stocks #finance #pe #ceo

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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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If you're building a fintech startup, you likely know of this investor, but just in case... This week's findfunding.vc spotlight is on Neil Kapur from TTV Capital. He: 🛫 Is based in SF & Atlanta 💲 Has spent time at Google in consumer-facing payments & at two fintech startups  🏔️ Loves alpine mountaineering and has climbed Kilimanjaro, Denali, Rainier, and more!! Amongst founders, Neil and the team at TTV Capital , including Gardiner Garrard, Mark Johnson, Sean Banks, Lizzie Guynn, and Laney Lewis are known for saying “lift, not lean.” They believe that their job as investors is not to create work for founders, but instead ask the right questions and help navigate to the best outcomes. Knowing Neil well personally, he's not only my go-to person for anything related to fintech but I can also highly recommend having him on your cap table - he's the kind of human you want to have in your corner during both good times and bad. Make sure to: ✉️ Pitch him at nkapur@ttvcapital.com ➡️ Follow TTV Capital on LinkedIn For more, check out our funder spotlight card below along with TTV Capital's profile on findfunding.vc (link in comments).

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Reports of the Venture Capital Market's Demise Are Greatly Exaggerated "You can't raise capital right now." I hear this repeatedly. But it's all relative. In May, Pitchbook released a study (https://buff.ly/3ieuY9K ) showing that the U.S. venture market is at least as active now as it was in 2017, which itself was the most active since 2010 or so. In other words, there's a massive difference between "It's harder now than it was" and "It's impossible." But bear in mind that the VC market in 2022-3 was crazy high - between everyone scrambling to jump on digital transformation (remember when we all thought we'd be able to work from home forever?) and the mass market inflection point with artificial intelligence, there was bound to be lots of investment. Plus, we saw the uptick in the biotech space as the rapid development of the COVID vaccine forcefully proved the case for gene editing technology. Well, it turns out most of us have to be in an office at least part-time, and reality has set in with gene editing, which, while a promising technology, is a decade away from many drugs being launched on that platform. AI continues to be strong, with the markets increasingly worried that we are already in bubble territory. There was bound to be a cooling off. The venture market has also reconfigured. It is pulling back on risk and placing a priority on proven businesses over high-potential concepts. They are even willing to pay higher valuations for these opportunities. They are willing to accept lower returns that go with the lower risk. Even artificial intelligence deals are being held to this standard, though not as strictly. But if you've got a business that has some market proof in the form of customers, there's money out there, and probably at attractive valuations and terms. With this in mind, it may be the best time for you to raise money in quite some time. So, what do you do with your pre-revenue startup? You either figure out a way to make it current revenue, or you settle in for a long investor search and develop a survival plan. If your idea is great, there is still capital out there for you, but there's going to be more competition for it and fewer sources providing it. #unblakeable #venturecapital My name is Mike (Stage Name - Unblakeable) - Helping you win your best business decisions at your most critical moments. Liked this post? Want to see more? Ring the bell on my profile. Connect with me (also @unblakeable on Instagram, Facebook, and Twitter) Subscribe to my YouTube channel! https://buff.ly/3HNdUB6 Join the LinkedIn group "Unblakeable's Group That Doesn't Suck" Welcome!

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VC capital down 97%!!!! 😱😱😱 Is CPG venture capital dead? Not yet, but there is no doubt a big shake up is in the works. We are not just seeing brands go bankrupt, but there will be a large number of CPG venture capital firms move out of the space or close up completely. Let’s look at how we got here. Prior to 2010, the venture capital market for CPG did not exist. Most of the capital for brand development came from friends & families, and it wasn’t until brands grew to the magical PE threshold of $10m in revenue or $2m in EBITDA were brands able to access institutional capital. Then came the rise of digital marketing (DTC) and online based corporate infrastructure platform applications (quickbooks online, online banking, etc) in early 2010s that started leveling the playing field for consumer startups. The ability to bypass retailers and market directly to consumers reduced the impact of the large strategic stranglehold on brick & mortar distribution. Also, productivity gains through a distributed corporate infrastructure allowed for more professional manage without the traditional fully burden cost of a InHouse team all located in a single location. This rise tigger hypegrowth for that first cohort of brands, leading to a wave of strategic M&A from 2015 - 2019, first in big food & beverage and then followed by the diversitied groups such as P&G and Unilever. However, cracks were already showing. Most brands acquired during this time failed and strategics started changing there M&A strategy model, requiring brands to be larger before acquisition. The next phase brought the beauty and personal care wave, with food & beverage VCs diversifying into other categories. While this was happening, the amount of capital flowing into the market continued to accelerate. Then COVID hit… Instead of slowing the momentum, COVID super charged the capital flowing into consumer, with the early stage seeing a true bubble. COVID trends distorted and already distorted view of reality, as growth was unnaturally charged with capital in digital marketing without real customers being created, and it all hit reality with two major market changes. IOS change in May 21 and the increasing interest rate environment / quantum tightening reducing the investor liquidity for private capital. Fast forward to today, the venture capital dollars for CPG is back to where we were in 2010, practically zero. So what’s next? Over the past 10+ years there have been a massive infrastructure build to support early stage CPG that continues to allow for efficient brand development. There has also been a number of successful firms that have proven smart investors that can truly be value add can propel brands. So while the competition for capital is going to be fierce for years, those groups that do have deployable dollars will more than likely increase the probability of success for their portfolio companies. #cpg #venturecapital #cpginvesting

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I have to repost. First because performance metrics of #VC funds are finally gaining the importance they deserve, secondly because they’re quite misunderstood, and thirdly it explains what matters to LPs in a market where liquidity is king. ✖️ #TVPI is very important at the earlier stages of a fund- measuring the total value of an investment relative to the funds committed and compounding both realized and unrealized returns (NAV+distributions/paid-in capital). It is the metric that captures potential upside. ✖️ #DPI is the metric that matters when a fund reaches maturity. Unlike TVPI, DPI focuses on realized gains and cash distributions to LPs (distributions/paid-in capital). In a market like today where liquidity is king, DPI holds more weight.

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Regulatory clarity for responsible crypto innovation is emerging in the US and stands to catalyze the market adoption of such innovations. When regulations are clear, consumers and innovators all benefit. Financial Innovation and Technology for the 21st Century Act (#FIT21) is expected to pass with bipartisan support in Congress. FIT21 would redefine how securities issuers have to comply with existing federal law and Supreme Court precedent. The bill would create a new definition specific to digital assets, to identify when they're digital securities or digital commodities and whether the SEC or CFTC should be the primary spot market regulator. This collaborative approach signals a shift away from the current unclear, antiquated and antagonistic processes in some of the US regulatory agencies.

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Like other venture building groups, at 9point8 Collective we have our own methods of evaluating and screening for great leaders. Empathy is pretty high on the list, but maybe not for the reasons you might think. - Successful companies deliver for their customers. As a leader, it is hard to understand your customers -- who will almost certainly have an entirely different reality and worldview than you -- without empathy. When was the last time you saw a product launch and thought "wow I don't really get it but I can see how THEY would love it." It happens a lot. - Successful companies have loyal and capable employees. What drives a capable employee to eschew potentially more lucrative offers elsewhere? For most, it starts with being heard, appreciated, and valued. Again, empathy goes a long way here. - Empathy breeds humility. If someone fundamentally does not appreciate the perspective of others, how likely are they to truly test their own assumptions and seek out new perspectives? Hubris creates blind spots and blind spots create inefficiencies, then limitations, then weaknesses. Empathy is not the end all be all, but it's a simple and effective mechanism to learn, course-correct, and build momentum. #venturebuilding

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Such an excellent conversation this week. For those in venture capital, this is a must listen. https://lnkd.in/gQUgM8q9

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Key takeaways from VC Goat - Vinod Khosla podcast. - The firm cares more about working on interesting problems with large technical solutions rather than just maximizing IRR. The team is there because they believe in the mission. - Khosla assumes they've lost the money the day they invest, and then maximizes for the upside opportunity. He calls it "option value investing" rather than IRR investing. - Khosla has contrarian bets in AI (neuro-symbolic computing, probabilistic approaches), biotech, robotics, crypto, and more. - He believes aviation fuels, fusion energy, new transit systems, and other contrarian areas ignored by most investors will be huge opportunities. - Most large innovations come from outsiders, not industry insiders. Khosla looks for founders who can learn a business rapidly rather than have deep domain expertise. The Future Impact of AI - AI will be deflationary and increase productivity growth to 4% annually vs the typical 2% forecast. This will cause great abundance but also increasing income inequality. - Bipedal robots will take over most manufacturing and manual labor jobs within 20-25 years. This will free humans to be more creative and pursue their passions. - Education will shift from job training to creativity. Uniquely human elements like taste and curation will be most valued in an AI-enabled world. https://lnkd.in/gqBsmbks

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Suppose you are a VC, Early investor, or CIO trying to keep your eye on the industry trends. In that case, you’ve probably heard already about hallucinations, context shifts, and accuracy measurement problems in LLMs. These scary concepts kill motivation to invest in LLM-based projects and build RnD departments. Are they really so scary? Yes, but just for now, you have a good strategy to cope with them. Is this strategy already known? Yes, old but still one of the most effective approaches- knowledge graphs in combination with fresh new RAGs will allow you to keep your models free of hallucinations, stable in accuracy, and easily adaptable for context change. Btw, do you know that knowledge graphs are seeing as one of the most impactful AI enables during this year?🙌🏻 How big companies like Deutsche Telekom and Microsoft are seeing the future of LLMs adoption you can find here https://lnkd.in/d4B3t56z

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Limited Partners (LPs) are holding on to their dollars in Q1 2024 which is impacting the new fund investments, a mere fraction of 2022 commitments. "For LPs, distributions are what matter, and our data shows how low those realized returns have dropped during the market slowdown. One of the data points that really sticks out this Q1 report is that just $9.3 billion of new fund commitments were closed, or rather, 5.0% of the 2022 annual high. With little capital to recycle into the market, LPs have come under further pressure in navigating their exposure to venture. Though the IPOs of Reddit and Astera Labs grabbed the spotlight during the quarter, total exit value reached just $18.4 billion, dampening the outlook of an increase to distribution rates just yet." Pitchbook #venturecapital #limitedpartners #ipos #venturefunds #familyoffices #FOFs #FOs

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As the Shasta Ventures approval deadline approaches, we're presented with a unique opportunity to observe the complexities and inherent conflicts in GP-led secondary transactions. This scenario sheds light on the considerable leverage GPs hold within the private equity infrastructure. According to the article, proposed continuation fund requires LPs to approve the transaction if they wish to roll their interests into the new structure—a stipulation that could be seen as putting undue pressure on LPs. This raises critical questions about the balance of power in private equity deals and the alignment of interests between GPs and LPs. What are your thoughts? Is it appropriate for GPs to demand such conditions for LPs to participate in a continuation fund? How do you see this impacting the broader private equity landscape and the perception of GP-led secondary transactions? Looking forward to hearing your insights and perspectives on this pivotal issue. #PrivateEquity #VentureCapital #InvestmentTrends #ShastaVentures #GPledSecondaries

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Want to be a Venture Capital Scout? Scout for Syndicate leads. I’m biased, but I think SPV/Syndicate leads are some of the best connections for VC scouts. As a syndicate lead, I’ve leaned into working with VC scouts the past 3-4 years. It's been a great way to gain unique access to deal flow and many of my most exciting portfolio companies have come from various “scouts”. Given the deal by deal investing strategy and ability to share carry with those who support sourcing & diligence, it’s become increasingly common for syndicate leads to actively partner with scouts and share carry or upside in the SPV. What’s in it for the scout? Deal x deal carry. While there are multiple traditional VC scout models that exist, the syndicate scout model is pretty straightforward. If you source a deal and support diligence, the syndicate lead is going to share some of the carry with the scout, and likely a more meaningful amount than a traditional venture fund. This is of course an SPV, so you are getting carry for the specific deal you sourced and not fund-level carry. A little more background on why the SPV model aligns with VC scout deal sourcing… Syndicate leads are structured (and many times set up) to invest in more companies than a traditional venture fund. In order to consistently bring LPs high quality deals, it makes sense to partner with folks in your network who have strong deal flow. Most times the carry split from syndicates will be more generous than that of a traditional venture fund. Syndicates do not necessarily have a certain number of portfolio companies they can invest in, meaning as long as they are getting access to quality deals that LPs want to participate in, then they will: 1) Be more likely to say yes and run the SPV into that investment and 2) Be more willing to provide a higher carry split, especially if you as a scout show you can repeat this with more future access In summary, if you are going to scout for venture funds, you might as well explore doing so with syndicates and capitalize on deal by deal carry/upside. Disclaimer: If you are scouting deals because you want to get into VC, working with traditional VCs is likely better from a networking standpoint, but if you are scouting to capitalize on carried interest/upside, I think the SPV lead route can be more attractive, and more frequently. -- Interested to see if you are a fit for our new Deal Sheet accredited investor product? Explore Deal Sheet to access 100-200+ of the best SPV startup (pre-seed to pre-IPO) investment opportunities per year. Deals are curated by Zachary Ginsburg & Alex Pattis (deployed > $200M across 750+ SPVs) across 50+ syndicate leads.

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Does brand matter for early stage companies? "this is what I think about when I think about branding (for early-stage companies). The creation of massive advantage through language, design, and imagination. The framing of evaluation criteria that force everyone else to be judged relative to you. A unique lens that guides every decision you make toward solidifying and continuing to establish your differences. And the building and strengthening of an emotional relationship that binds your most important stakeholders to you more strongly over time." New article up at Brand Capital: https://lnkd.in/esZZj9tH

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