Hugo Bernardo

3 years of pricing lessons at Equals condensed into one blog post. Since starting the company, we've tinkered a lot with pricing and packaging. It's one of the single most impactful levers early stage companies can pull. I think folks *don't* experiment with pricing enough, or take big enough bets when they do. We've tried free. We've tried completely sales led. We've tried not listing pricing on the site. Matt Hodges details all the plans we've had, why, and what we've learned in our latest installment on Wrap Text. https://lnkd.in/ecckEDba

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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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This part of my conversation with Joao Barbosa, co-founder at the world’s leading wellness platform Gympass (now Wellhub) valued at $2.4 is a testament to the fact that nothing big actually started big 👇 It took Gympass 5 pivots and 2 near death experiences to find the business model that works and is scalable across the globe What I found really interesting is the framework that the team had around pivots - the tripod approach towards creating value. This approach could benefit many founders especially in marketplace kinda businesses Head over to our channels on Spotify, Apple and YouTube to watch / listen to the full conversation link in comment 🔗 The J Curve #thejcurvepodcast #podcastrecommendation #gympass #pivot #entrepreneurship #founder #venturecapital

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Another awesome investor dinner, this time with 2x exited founder Sahin Boydas of Claros Farm. Claros has pioneered "generative nature," a revolutionary soilless farming method with 10x less water usage. Using affordable hardware, advanced AI, proprietary liquids, and bacteria, Claros enhances their products' nutritional content. For example, their strawberries contain 190% of daily recommended Vitamin C and can be grown much more cost-effectively compared to vertical & traditional farms. Website: https://www.clarosfarm.com It was great to hear the Q&A from CPG and tech investors alike. A tech leader from Silicon Valley, Sahin presented a bold vision for tech-enabled scalability while remaining humble to the advice of experienced CPG operators and investors. Claros' round is already 50%+ closed. Reach out for an intro if interested. -- At Supernova Dinners, we hyper-curate your exact investor persona for a private event with you. Investors arrive having already reviewed your deck and already been vetted as accredited, actively deploying, and matching your target industry and growth stage. We'll coach you on a 15min pitch, 45min Q&A, and then treat everyone to a buffet-style private chef dinner in a gorgeous luxury home. By lowering the barrier to entry, we're building a nationwide network of HNW private investors who invest directly into companies and funds as LPs. Website: https://lnkd.in/gukzKfD9 #investors #supernova #astronomic #austintx

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🌟Innovative VC Firm Overcomes Exits Drought with Secondary Sales🌟 ⛵Navigating a challenging landscape where exits are scarce, Santa Barbara Venture Partners (SBVP) has pioneered a novel approach to sustain its growth and attract investors for its second fund: secondary sales. Instead of waiting for traditional exits like IPOs or acquisitions, SBVP opted to sell shares of its portfolio companies, demonstrating its ability to generate returns for investors and stand out in a competitive market. 🎤According to Dan Engel, founder and managing partner of SBVP, these secondary transactions have been a game-changer, sparking investor interest and bolstering the firm's credibility. By leveraging its recent successes, including a lucrative stake in sports-betting company DraftKings Inc.' acquisition of digital lottery app Jackpocket, SBVP seized the opportunity to return profits to its limited partners (LPs) and pave the way for its second fund. 💡Engel highlighted the challenges faced by young VC firms in raising subsequent funds, particularly amid a downturn in exit activity and heightened investor scrutiny. With traditional exit routes becoming increasingly elusive, the pressure is on for firms to demonstrate tangible returns and establish a track record of success. ✨"For us, secondary sales have been a game-changer. They've helped us return profits to our LPs and attract investors for our second fund," said Dan Engel. 💰For SBVP, the decision to pursue secondary sales was driven by the need to provide liquidity to LPs and validate its investment thesis in the eyes of prospective investors. By strategically offloading portions of its holdings in high-performing portfolio companies like Bark Technologies and Rad AI, SBVP not only generated substantial returns but also bolstered investor confidence in its ability to deliver results. ⚠Despite the complexities and potential stigma associated with early share sales, Engel emphasized the importance of prioritizing investor returns and seizing opportunities to unlock value for stakeholders. With a focus on profitability and transparency, SBVP remains committed to its mission of delivering sustainable growth and maximizing returns for its LPs. 🔍 "Returning profits to our investors is our top priority. By strategically selling shares, we're proving our commitment to delivering results and driving value for our stakeholders," added Engel. As SBVP continues to explore secondary transactions and expand its investor base, the firm stands as a testament to innovation and resilience in the face of market challenges. 🚀 ✅ Looking to raise capital for your #fund and increase the international pool of your LP #investors?   🤝 Need warm #LP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments?   ▶ G+QUANT's link for inquiries and fund decks: https://lnkd.in/gjC_EuTE #VCInnovation #SecondarySalesSuccess #InvestorReturns #ValueCreation 

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Greed and Fear, AI (adoption) style. In investments we're used to talking about greed vs fear, now we're seeing this same pendulum applies when it comes to consumer sentiment towards AI adoption. Concern is fear, that's obvious, and if you think about it a bit excitement comes from a form of greed in this case: the excitement for AI is because people hope it will help them do more with less time and effort invested - a greed for precious resources (which can be translated to money as well). Consumers need to invest some time, effort, as well as money in order to come up the AI learning curve (learning the right tools and how to prompt them). Playing around with AI is one thing, seriously using it professionally or personally is a bigger step that will be affected by the greed vs fear. It's too bad Pew Research Center didn't separate out professionals' opinions in a professional capacity (link to findings in the first comment), but still they find that for the first time the majority of Americans are concerned. The increase in concern (fear) happens just as research is starting to demonstrate that AI is making people more productive, which should have fueled excitement (greed). According to Ipsos, two thirds of people think AI will profoundly change their daily life in 3-5 years. Almost half say it already has (link in second comment). Interesting... And now this entire post rewritten by LI's AI: Greed and fear are familiar concepts in the world of investments, but did you know that they also apply to AI adoption? Consumer sentiment towards AI is swinging back and forth between concern and excitement. Concern is fear, and excitement is a form of greed. People hope that AI will help them do more with less time and effort invested, a greed for precious resources. However, investing in AI requires time, effort, and money to learn the right tools and how to use them. Playing around with AI is one thing, but seriously using it professionally or personally is a bigger step that will be affected by the greed vs fear pendulum. According to Pew Research Center, for the first time, the majority of Americans are concerned about AI. This increase in concern happens just as research is starting to demonstrate that AI is making people more productive, which should have fueled excitement. Ipsos reports that two-thirds of people think AI will profoundly change their daily life in 3-5 years, and almost half say it already has. What are your thoughts on the fear vs greed of AI adoption? Share your opinions in the comments. #AI #fear_greed #investment #genAI

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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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At last week’s ClimateTech Coffee 🚲 Bryan White and I were joined by Kimberly Gilbert, PhD to hear about her work on Carbon Neutralization and Ocean Storage (CNOS) through her company pHathom. Here’s a recap: The ocean naturally absorbs CO2 over time, but we’ve added so much that the ocean has become increasingly acidic. Ocean pH has dropped from 8.2 to 8.1 globally over the last hundred years, and as pH drops it becomes harder for coral-based organisms to form shells. To combat this, Ocean Alkalinity Enhancement (OAE) is an intervention that both reverses ocean acidification and removes CO2 from the atmosphere. Challenges with traditional OAE: - When you add the alkalinity into the ocean, it spreads out. It’s hard to measure the change in pH. - You don’t know exactly when the extra CO2 will be absorbed. Modeling and measurement companies are trying to help with this problem. Advantages of CNOS: - Co2 is captured directly at a coastal power plant or refinery, and then the concentrated Co2 is pumped into water that has limestone (and/or other alkaline materials) in it.  - This means the Co2 is dissolved onsite and the pH can be equilibrated onsite, which makes accurate measurement more feasible. Factors that affect progress:  - We’ll start seeing more companies enter in this space as the chemistry and its impacts are better understood and seen as safe  - Local and national permitting are a huge bottleneck - On the international permitting level, the London Protocol has a blanket ban on ocean geoengineering for anything except for research. There were good reasons for doing that, but it’s unclear who decides when that can change and the circumstances under which the ban is lifted. (Note: pHathom is not doing geoengineering; it’s doing water treatment on-site and releasing it back as ocean water) Open questions for the category/technology: - Can they come up with enough low-cost alkalinity sources, and get them in a way that doesn’t cause additional environmental damage or Co2 emissions?  - This approach will require pumping a lot of water. How much will that cost and how can the cost be driven down?  - Putting 100 plants’ worth of bicarbonate into the ocean is likely fine for ocean health relative to the climate benefit, but what is the point where the tradeoffs cross over? Some groups doing good work in this space:  [C]Worthy Carbon to Sea Initiative  University Research: UC Santa Barbara, University of Tasmania, GEOMAR, Dalhousie University, Scripps Join us for the next one in May! Details coming soon, and you can get updates by subscribing to the series page here: https://lnkd.in/g7DTGm2V

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Learn how to fine-tune your product to meet market demands with strategic customer conversations and data-driven feedback mechanisms 👇 ➡ 𝗜𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄𝗲𝗲: Brian Long, CEO & Co-Founder at Attentive 🔌 𝗜𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄𝗲𝗿: Nick Moran, General Partner at New Stack Ventures and Nate Pierotti, Principal at New Stack Ventures ✏ “The Playbook to Finding Product-Market Fit, When Founders Should Begin to Scale, and Lessons from Building Attentive” ⭐ 𝗦𝗮𝘃𝗲 𝘁𝗶𝗺𝗲 𝗯𝘆 𝘁𝗮𝗹𝗸𝗶𝗻𝗴 𝘁𝗼 𝗮 𝘁𝗿𝗲𝗺𝗲𝗻𝗱𝗼𝘂𝘀 𝗮𝗺𝗼𝘂𝗻𝘁 𝗼𝗳 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀: 💬 "I think that what we got right were two things. One, I think that we talked to a tremendous amount of customers, before we started building things. So we learned to hear their problems, hear their issues, and then start building and assaulting those, you know, rather than kind of just jumping right into build-build-build, so that saved us a lot of time." ⭐ 𝗚𝗲𝘁 𝗾𝘂𝗮𝗻𝘁𝗶𝘁𝗮𝘁𝗶𝘃𝗲 𝘀𝗰𝗼𝗿𝗲𝘀 𝗳𝗿𝗼𝗺 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀, 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝗾𝘂𝗮𝗹𝗶𝘁𝗮𝘁𝗶𝘃𝗲 𝗳𝗲𝗲𝗱𝗯𝗮𝗰𝗸, 𝘁𝗼 𝗼𝘃𝗲𝗿𝗰𝗼𝗺𝗲 𝗽𝗼𝗹𝗶𝘁𝗲𝗻𝗲𝘀𝘀 𝗯𝗶𝗮𝘀: 💬 "I think you're also looking at things like NPS, you know… because if that number starts dropping, it's often because you're no longer solving the problem." ⭐ 𝗧𝗮𝗸𝗲 𝗮 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝘃𝗶𝗲𝘄 𝗮𝗻𝗱 𝗵𝗮𝘃𝗲 𝗮 𝘁𝗵𝗲𝘀𝗶𝘀 𝗮𝗯𝗼𝘂𝘁 𝘄𝗵𝗲𝗿𝗲 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗶𝘀 𝗴𝗼𝗶𝗻𝗴 𝘄𝗵𝗲𝗻 𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝘁𝗵𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝘆: 💬 "I think that we've taken an even longer term focus. We know what can be big. And we know it's dangerous to start getting an ego to think you can do things because it's always very hard. You've always got to think towards taking a longer term view, having a thesis around that view, and then understand how the pieces can come together for success." ───── 👉 Follow me, Alexander Small, for tactics and strategies for building startups from industry-leading Founders, Operators and Investors

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Ibotta, Inc., a platform that helps CPG brands deliver promotions to millions of consumers went public today, and you probably didn't hear about it. My guess as to why? It hasn't raised money from any big-name VC firms with big marketing teams. Ibotta was started 12 years ago after Bryan Leach saw someone take a photo of a receipt for an expense report and realized there were tons of interesting data contained in that picture that was going to waste. Fast forward 13 years and Ibotta is a profitable, fast-growing business helping over 2,400 of the most notable brands like Kraft Heinz, General Mills, and Unilever. They touch over 91% of US households... Ibotta offers shoppers cash-back on in-store purchases funded by its advertisers, while also collecting all sorts of valuable data like cart makeup and much much more. They've paid out over $1.8B to consumers over the course of the company Quick 2023 Numbers: Revenue: $320M (+52%) Gross Margin: 86% (best in class despite not being traditional "SaaS") Net Income Margin: 12% (a quick turn around from a $50m loss in 2022) Adjusted EBIDTA Margin: 26% In 2022, they inked a MASSIVE partnership with Walmart that made up for a huge amount of 2023 growth via 3rd Party revenue. As a part of that deal, Walmart also owns a significant amount of the company There are some fun case studies in the S1 showing off some hot up-and-coming brands as well including poppi and Chomps. When you dig deeper, one of the more concerning parts of the business is the revenue concentration inside of Walmart, but with their significant ownership %, it's unlikely they go anywhere. Seed investors paid $0.74.share and it's going public at $88/share so that's a pretty good day at the office. Excited to see how this trades!

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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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Parker just posted Rippling's new fundraising memo. It's the manifesto for compound startups and one of our initial inspirations for building Atlas. Here's a nugget that I really liked that summarizes how we feel about the competitive advantage of all-in-one startups over vertical startups (in customer support especially): "When we build corporate cards, we're not innovating on the way we issue corporate cards (through Stripe issuing or Marqeta) or the way we scan and extract metadata from receipts (which is mostly a vendor relationship for us today). We're going to win on the capabilities we have that are common to all Rippling products—the integration with the rest of Rippling and with employee data, the platform capabilities, and the common UX described above." Here's the full doc: https://lnkd.in/gYH59HVZ

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If you are a CPG founder interested in learning more about community rounds, this is a good 101 overview. Thanks to Daniel Scharff and the team at Startup CPG for hosting, and James Reina for sharing his personal experience of running a Wefunder community round for Jibby Coffee. Without question, the best slide of the deck screenshotted below. https://lnkd.in/gHyxFuDa

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So whether I’ve been pitching investors or customers or partners, I’ve realized Follow-ups have been ThE KEY to converting leads into loyal customers. Effective follow-ups keep the conversation moving forward, build trust, and ultimately close deals.I’m big on dog-fooding, so we’ve been using Criya’s AI for ALL our client engagement, crafting personalized follow-ups that have effectively been converting prospects into loyal customers. SO I have a “Virtual Buyer Room” for you sales peeps to use with 2 simple needs met 👉 Personalized Virtual Sales Rooms: So you and your reps provide a fully personalized every buyer’s experience 👉 Track hot leads: Analytics when prospects engage with your materials, so you can follow-up at the perfect moment. As always, I share all my new templates. Create a FREE account and you can access our Template Gallery! #criya #salesenablement #ai #aipoweredwebsite #aritificialintelligence #criyaai #followupcalls

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As we dive into 2024, the Series A fundraising landscape is becoming increasingly daunting. Investment standards are soaring, and fewer startups are making the cut. Series A investors are finding many seed stage companies too premature. The median valuation jump from seed to Series A skyrocketed from $19.5 million in Q1 2022 to $28.7 million in Q1 2024. Investors now demand stronger revenue performance, targeting $2 million to $3 million in ARR, up from $1 million to $2 million. Alarmingly, only 12% of Q1 2022 seed startups secured Series A funding within two years, down from 31.8% in Q1 2020. #venture #earlystage #seedtoseriesa #seed #seriesa #inspireglobalventures https://lnkd.in/gW4bkcNy

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A simple way to understand seed venture capital: a founder needs to build a company worth roughly 20x the size of the VC that invests in it. Here’s why: A typical seed stage fund has a 10-year life and will pitch its investors 12% a year (compounding) returns. That means it needs to 3x it’s fund over 10 years. Statistically, it’s likely going to achieve most of that from a single investment, which it will likely own roughly 15% of at exit. So for founders the math is simple. You need to convince a VC that you can build a company that is worth the Venture Capital Fund Size x 20 (or 3/15%) I.e. A $100mm seed fund will be betting you build a $2bn company. The bigger the fund the bigger the number. Keep this in mind when you are pitching.

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This is a great read by Sachin Rekhi that outlines the deliberate startup methodology. If you want to learn more - join me while I facilitate his Finding PMF course where we cover the methodology in depth, including case studies. Link to the course in the comments.

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Join Our Virtual Fund of Funds! 🚀 Looking for founders raising Family and Friends, Pre-Seed, or Seed Rounds? We're excited to announce the launch of xVentures' Virtual Fund of Funds, designed to connect you with the right investors to accelerate your journey. As a participating investor, you will also receive early access to innovative investment tools created by xVentures and our venture partners. Here's your chance to make a difference! Commit to viewing deal flow and allocate capital to the next generation of innovative startups. 💰 $5K (Angels) 💰 $20K (Angel Groups) 💰 $250K (Pre-Seed VCs) 💰 $1M (VCs) Express interest using our non-binding LOI. DM your email address for Dropbox Signature. Together, we can create a thriving ecosystem that drives innovation and growth. @Founders - please sign up at xventures dot ai for milestone investments. #venturecapital #startupfunding #innovation #entrepreneurship #xVentures

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To investors with concerns: Concern #1 - You fear losing your competitive edge ⚡ In our venture ecosystem, founders retain control over who they invite to their deal room, and investors can request access. This selective access ensures that high-quality, exclusive deals remain within controlled circles, preserving the competitive advantage. Concern #2 - There might be apprehensions about the dilution of deal quality and overexposure of top deals. ⚡Our system allows founders to manage visibility, ensuring only selected investors can see specific deals. Additionally, rigorous vetting processes will maintain high deal quality, preventing an influx of less vetted opportunities. Concern #3 - We need to reduce risk for investors. ⚡Our venture ecosystem is designed to de-risk startups and investors by leveraging AI-powered studios, an advanced business operating system, and revolutionary frameworks and tools. We provide comprehensive support through cutting-edge resources, experienced coaches, and strategic partnerships. This structured environment ensures tailored investment strategies that align with individual risk profiles, fostering confidence and success within the ecosystem. Concern #4 - A one-size-fits-all approach may not cater to the diverse needs of investors. ⚡The platform allows for customized deal flow subscriptions, enabling investors to filter deals based on their specific criteria such as industry, stage, or geography. This flexibility ensures that investors can focus on their areas of expertise and interest without being overwhelmed by irrelevant deals. The combination of controlled access, high-quality deal vetting, secure data management, and flexible customization ensures a robust and investor-friendly environment.

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