Joe Du Bey

It is a great privledge to be backing Stella Garber for a second time, as well as her sensational co-founders Brian Schmidt and Justin Gallagher. It’s also great to working with Index Ventures again, too. One thing I have learned in my venture career is that humans are lazy, and software that does simple things can feel like magic. Hoop uses AI to automatically harvest to do items from all of your communication channels. Today it’s single player, and in the future it will be your whole team. Read more about why we invested: https://lnkd.in/geTy-kyZ

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🏢 Big Moves in SF Commercial Real Estate! Intuit & Capital One 🏢 Two major financial firms are making strategic relocations within San Francisco: - Capital One is reducing its office space by two-thirds, moving from 201 3rd St. to 40,000 sq. ft. at 100 California St. This deal includes significant improvements to the new location, enhancing tenant experiences with new outdoor spaces and on-site amenities. - Intuit is downsizing from 200,000 sq. ft. at 22 4th St. to 36,500 sq. ft. at 505 Howard St. The move aims to leverage San Francisco's diverse talent pool while optimizing their workspace for future growth. These moves highlight the dynamic nature of SF's commercial real estate market and the need for adaptable, strategic office solutions. At Resource, we specialize in guiding companies through such transitions, ensuring seamless relocations and optimized space utilization. 🔗 Discover more about our tailored real estate services: yourresource.com #SFRealEstate #CommercialRealEstate #CapitalOne #Intuit #OfficeRelocation #RealEstateStrategy #ResourceCRE

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🚀 It’s a big day at Hoop! We’re excited to share we’ve raised $5m led by Index Ventures with participation from Origin Ventures, Chingona Ventures, Divergent Capital, and an inspiring group of angel investors. Two years ago, Justin, Brian, and I got together and started brainstorming. We had worked together as early executives at Trello for 7.5 years! We wanted to recreate the magic of the early days of Trello and respond to the epidemic of distraction we were seeing in the workplace. When I left Atlassian, I was in back-to-back meetings most days. Slack was constantly buzzing. My whole day was spent going between apps and praying I wouldn’t miss something important. I would wake up in the middle of the night remembering that DM I forgot to respond to. In an age of AI, this kind of mental fatigue across tools drains humans of our energy to do the work that really matters: the focused and creative work that comes when we can feel secure that we’re on top of all important work. Hoop is the product I wish I had. It connects to Zoom, Google Meet, Slack and email and automatically captures tasks for me using AI. It then centralizes everything in one spot so I never miss a task. Our vision is to rethink task management with an AI first principles mindset. There’s so much we can do now that we couldn’t have imagined back when we were building Trello. It’s an exciting time to be building in the space, and we’ve got a world class team taking on this challenge. Now’s the time to try Hoop out and let us know what you think! We couldn’t be more grateful for all the amazing support from our community, investors, and friends. Let’s go team! 👏🏼 Special thanks to our investors for all their belief and support - Damir Becirovic Neil Rimer Katie Shea Samara Mejia Hernandez Jason Heltzer Andy Dunn Wade Foster Linda Lian Michael Pryor Kristen Habacht Elizabeth Hall Barry Clark Nikita Miller Mihika Kapoor Jiaona Zhang (JZ) Maggie Adhami-Boynton Sonia Sahney Nagar Sean Harper Darren Murph Mike Arauz Job van der Voort Annie Duke Jay Simons Maria Christopoulos Katris Ezra Galston Sheel Mohnot Ilya Fushman #futureofwork #ai #startups #fundraising

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This is what the hotel of an emerging manager SHOULD look like - Disciplined fund size - Align incentives with LPs so you only win if they win - Invest every $ you have in your team and infrastructure - Know that you have not earned ANYTHING until you have returned $ to LPs

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Do you know how many hyper-growth public software companies are growing by over 40% this year? According to the latest June Guggenheim report… Zero. Not a single public SaaS company is growing over 40%. Do you know how many are growing their next twelve months (NTM) revenue over 30%? Also, zero! With that context, I was strategizing with my team on the most impactful ways companies can change their growth trajectory, and one thing we landed on solving immediately was time to integrate. If a company growing at 30% can pull in all net new integrations and thus revenue by just 1 month over the course of the year, it can increase its growth rate by almost 5%. For simplicity, assuming a $100M annual revenue, a 10% discount rate, and a 5-year valuation period, using a DCF, the company’s present value would not be 5% more valuable, but closer to 20% more valuable for all shareholders. The power of compounded growth rates. Game changer, and with just the smallest adjustments. That’s why smart companies are investing heavily in new customer onboarding and no-code, low-code technologies, like lightweight agents, hosted or embedded UIs, and more. The Socure team is ahead of the curve—ask our people about what we’re building and how we can help you accelerate your revenue growth.

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Today, we had a productive gathering in San Francisco with top management from Five Star Bank - California and several of my VC colleagues to discuss current market challenges. It was an enriching conversation with a diverse group of individuals representing various types of funds, and the open-minded team from Five Star Bank. Here are a few key points from our discussion: - Inequality in Funding: We addressed the funding disparities between male and female founders. It's notably harder for female founders to raise funds, especially now as startup funding decreases. However, there are funds specifically targeting minority and underrepresented founders to support their innovative ideas and products. Our Vibranium Venture Capital team has always been dedicated to helping those in need, focusing on immigrant founders looking to relocate their businesses to the Bay Area. - Banking Challenges: A major topic was the situations with Silicon Valley Bank and First Republic Bank, which not only created gaps in specific banking products for startups and VC funds, but also led to serious trust issues. What our ecosystem is looking for in my couple of points?  - Banking Flexibility: Many banks lack flexibility, often requiring founders to be physically present and have extensive documentation to open accounts. This is why many immigrant founders, who are new to the U.S., turn to Neo Banks for their speed, flexibility, and simpler requirements.  - Trust Rebuilding: Trust can be rebuilt through personal relationships. Knowing there’s a person at the bank you can call to solve immediate issues like wire transfers or document retrievals can significantly enhance trust. - Use of Ai and Streamlining Due Diligence: We also touched on inefficiencies in the due diligence process between startups and VCs. I shared that we are developing an AI-powered platform INNOVERA.AI to streamline this process, enrich data, and synchronize founders and investors faster, thus increasing funding success through data-driven decisions. We agreed to meet again as this journey is just starting, and there are many opportunities to make this ecosystem more efficient. We aim for a win-win approach that allows founders to focus more on their companies and VCs on effective deal-making. We hope these meetings continue to bring ecosystem players closer together and further establish San Francisco and the Bay Area as the AI capital of the world. More updates to come! Was happy to see. James Beckwith, Brian💥 Sparkes , Irene Montalvo, Renzo Luján , Jennifer Vancini, and many others. Attn to: Daniel Kozlov, Kamran Elahian, Pedram Mokrian, Marilynn Ahern, Ella Shukho, Galina Dremova, Valentina Podgainaia (Pidgaina)

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The #1 Factor to Determine Max Valuation in Micro SaaS...is debt financing. Here's why, plus a free valuation calculator... Most buyers in the $500,000 to $2 million valuation range use SBA loans, which come with specific requirements. The SBA requires a Debt Service Coverage Ratio (DSCR) of 1.25, meaning the company needs $1.25 of income for every $1 of debt payments. In simpler terms, the key question is: Can the business afford itself? Does the Micro SaaS firm generate enough income to cover the loan needed to buy the business? As the valuation rises, so do the loan and debt payments. At some point, the valuation requires a loan that breaks the DSCR requirements. The upper limit of a Micro SaaS valuation is ultimately determined by the maximum loan a buyer can secure based on the company's income. Here's a simple calculator to illustrate this concept, helping us all determine valuation more accurately based on the real world 👇 #microsaas #acquisitionentrepreneur #saasgrowth

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Great analysis by the AGC team on SaaS public company comps. It's worth a look as we recalibrate mid-way through earnings season. The analysis aligns with the broader Nasdaq equity performance, where the Mag 7 (or fab 4 now :-)) have shown more resilience than the rest of the market. #AGC #SaaS #EarningsSeason #Nasdaq #EquityPerformance

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I believe two of the big winners over the next 10 years in the SMB category will be PE who are rolling up the businesses and GenAI powered software that makes running these businesses significantly more turnkey and/or profitable. Thanks for having me on Jay Kapoor. If you want spicy takes fast forward to 25 min mark. If you want to get deep in market analysis buckle in for the whole thing. https://lnkd.in/d8M7Jyrx

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Should I use only equity for my search fund acquisition? 👇 If you can convince enough shareholders to part with their cash in order to purchase a company, this is the simplest way to go. A few thoughts: 1. Equity carries no covenants or external limits on how you and your team run the company. 2. Since there’s no debt, you have a higher risk tolerance. 3. Equity investors are patient. Debt holders are not. 4. Investors get well rewarded for shared success. If you do well, they do very well. This can make it easier to raise capital. 5. Some companies are not a good fit for debt. Lenders like predictable cash flow, hard assets and a history of profitability. 6. Equity is easy to raise compared to debt, which involves due diligence, counterparty risk, and tight terms. On the other hand, equity is expensive. You will have to give away the value of the money up front, and more.

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An interesting article below, that demonstrates out how San Diego is punching above its weight.  And how Connect's strategy and execution over time, contintues to be central to that success. The article describes the current state of the market in Seattle.  (And i love Seattle.) It's a market that we tend to track with relative to venture fundings.  They used to kick our butts, we outraised them each of the last three years.  This despite the fact they have 3x as many funds there, and 9x the amount of resident capital there. (per pitchbook) Some key takeaways:  * They continue to compare themselves to SIlicon Valley. Instead, we leverage our proximity. *They whine there's not enough local investors (see note above - they have more than us). We bring over 200 VCs to SD annually! * They say founders are not connected with one another. We bring CEOs together regularly, in a variety of ways - private dinners and through our Springboard program. * They say they need to elevate their image on a national & international stage. Why we created and continue to build Five.Ten.Thirty (aka Inno Day).  * And the last paragraph - they need to concentrate on making their region a great place to live. Our mantra: "It's about Better, not Bigger." (See XEO, TL Fund). THANK YOU FOR ALL OF YOUR SUPPORT. WE ARE ON A MISSION TOGETHER!!!  (Comments, whining, suggestions on SD always welcome.) https://lnkd.in/g6Rq_f2Y

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What do you do as a founder, when you're no longer VC-backable, but are too small for private equity? Join us on May 23rd for a fireside talk with Andrew Chang, where we will explore the venturePE financing model, the gap in the funding markets that we address and how back companies that need that extra push and operating muscle. Lauren Bonner Jonathan Jetmundsen MBM Capital #fundraising #venturePE

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How I model the Pro Forma Balance Sheet in 7 steps 👇 𝟭. 𝗦𝗲𝗹𝗹𝗲𝗿 𝗧𝗮𝗸𝗲𝘀 𝗖𝗮𝘀𝗵 𝗮𝘁 𝗖𝗹𝗼𝘀𝗲 Seller keeps the existing cash because it's value they previously created and doesn't belong to the new buyer. (Often times this is excess cash, not all cash) Steps: Reduces cash, reduces Retained Earnings. ~~~ 𝗧𝗟;𝗗𝗥: grab the template here 👉 https://lnkd.in/ex6BKa4E ~~~ 𝟮. 𝗡𝗲𝘄 𝗘𝗾𝘂𝗶𝘁𝘆 Buyer brings new equity to purchase the business. Steps: Equity up, Cash up 𝟯. 𝗡𝗲𝘄 𝗗𝗲𝗯𝘁 Buyer also brought new debt to purchase the business. Steps: Debt up, Cash up 𝟰. 𝗣𝗮𝘆𝗼𝗳𝗳 𝗢𝗹𝗱 𝗘𝗾𝘂𝗶𝘁𝘆 (𝗮𝗸𝗮 𝗯𝘂𝘆 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀) The cash from the new equity & debt goes to purchase the existing business. Any premium above the equity value is recorded as Goodwill. Steps: Old Equity Paid Off, Goodwill Calculated, Cash goes out (this is "The Purchase") How to calculate Goodwill: Enterprise Value (+) Cash (-) Debt = FMV of Equity (-) Book Value of Existing Equity = Goodwill 𝟱. 𝗣𝗮𝘆𝗼𝗳𝗳 𝗢𝗹𝗱 𝗗𝗲𝗯𝘁 Similar to step 4, new debt comes in, old debt goes away. Steps: Reduce old debt, reduce cash 𝟲. 𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻 𝗙𝗲𝗲𝘀 These are an expense for the new buyer (to get the deal done), so it immediately hits Retained Earnings. Steps: Retained Earnings down, Cash down 𝟳. 𝗗𝗲𝗯𝘁 𝗙𝗲𝗲𝘀 Under the "old method," you would record the deferred financing fees as an asset. Today they're recorded as either a contra-liability or asset depending on the type of debt. The impact on the P&L is the same (amortization), so I often prefer the "old method" to keep my model cleaner. Steps: asset up, cash down 𝗪𝗮𝘁𝗰𝗵 𝘁𝗵𝗲 𝗖𝗮𝘀𝗵 In every step, you can see how the cash immediately flows in and subsequently flows out in order to complete the purchase. The ending result is the "Pro Forma Balance Sheet" that reflects the new debt, new equity, and cash balance for the buyer ($500k in this case). ~~~ 👋 Hey, I'm Chris Reilly, thanks for reading. ➕ Follow me to learn Financial Modeling for the middle-market.

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Awesome to chat about Team Equity with startup leaders today at William Buck. Equity can be a great motivator for startups and growth companies, when you have the right compliance structure, balanced with awesome communication and culture. A great team equity plan involves Founders and executives buying into and setting a winning strategy and culture, and finance, legal, and people operations bringing it all together! Thanks Jack Qi and 😎Alex Millar from Hudled for being awesome partners and putting this on! Cake Equity Callum Davidson Kim H.

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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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Don't just book recurring revenue any old way. There's a right and wrong way to do it. Many think ARR and annual run rate are interchangeable. But that's not how the best do it. Instead, proper revenue recognition is critical for valuation. Here are 7 steps that will help you get it right: 1. Understand the difference between booking and recognizing revenue. 2. Calculate ARR based on subscription term, not billings. 3. Don't confuse ARR with annual run rate. 4. Recognize revenue evenly over the subscription term. 5. Ensure your recognition method can withstand due diligence. 6. Train your team on compliant recognition practices. 7. Monitor revenue recognition accuracy every accounting period. You'll know you're doing it right when your SaaS valuation soars. Remember — you're not just booking recurring revenue. You're building a highly valuable SaaS business.

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This is fascinating. My two portfolio companies on the fastest path to Series A have kept the leanest teams. Both of them are lingering around cash flow positive on a monthly basis. One is growing gangbusters, one is growing nicely. Good data below to show that these activities are being rewarded. We're still in cockroach times. Also fwiw, I'm constantly amazed by and learning from Peter Walker. If you're interested in the data of venture funding (AND IF YOU'RE A FOUNDER, YOU SHOULD BE), then follow Peter.

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Why does sizing the accidental investor segment matter? 🏠 This topic haunted me for nearly a decade.  Sitting in startups, thinking through our go-to-market for retail real estate investors, trying to define ideal customer profiles and size the total addressable market.  It was always some massive hypothetical number. Most data aggregators size investors by researching public property records, combine matching absentee entities, then group based on units.  John Burns Research and Consulting recently posted about sizing  ‘small investors’ at 1-9, followed by 10-99, 100-999, and 1000+ properties owned.  Small investors made up 77% of the total single-family rental owners.  If you’re a founder of a real estate investment product/service this sounds like gold.  🛑 it gets worse from here. Intentional investor - someone that purchased the property with the sole intent of renting.  Doesn’t matter short or long.  It’s all about intent. Accidental investor - everything else.  Vacation, second, inherited, primary turned rental.  They didn’t buy the home to rent out and generate income initially.  Real estate startups will fail because of this inherent misunderstanding of intent.  Some of my own personal experience, albeit anecdotal, to support my opinion. 1.) In 2018, we spun up a B2B SaaS business from HomeUnion called InvestimateROI.  We white-labeled our investor portal for property management companies and prospected their customer base with the goal of selling more properties > adding doors for the property manager.  Failed miserably, using the exact same sales process we used with HomeUnion that converted intentional investors every day. Why?  We learned that 7 out of 10 owner's, best case, were accidental.  This was across 40 property management companies including in hot investment markets like Austin, Charlotte, and Atlanta among others.  Industry pm leaders in some of these areas. 2.) We repositioned Mynd as a full service investment company in 2021 with the intent of becoming the Coinbase for real estate investors.  Onboard investors via property management, up/cross sell more driving customer lifetime value.  Failed miserably, again.  Root cause, 7 out of 10 owner’s, best case, were accidental.  Experience aside, if the segment was so large, why in the world would Roofstock basically abandon their retail go-to-market after becoming the incumbent in the space? 🧐 I find it hard to believe that this is all coincidence.  In an effort to save venture capital/founders from chasing this elusive intentional investor, we took a swing bringing this topic to the surface in the latest edition of proptext.  🔗 in the comments. And for property managers?  This might be the best time ever to be one.  The amount of people moving out of their primary not willing to give up that 3% mortgage will be worth paying attention to.  But let’s be clear…many of these owners are not investors. #realestate #proptech #investing #sfr

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