Kenny Jen

The IPO markets continue to show signs of improvement. Last month saw more positive IPOs, with grocery shopping app Ibotta and data security firm Rubrik both experiencing positive debuts on the public markets. The continued strengthening of the IPO market is a cause for optimism for VC-backed startups – many of whom have struggled to raise funds in recent years as investors have sat on record amounts of dry powder. Successfully raising funds still demands financial excellence, however. And if your startup needs support strengthening its accounting and finance function, our team is here to help. Learn more: https://hubs.ly/Q02wlTq70 #gsquared #gsquaredpartners #gsquaredCFO #chieffinancialofficer #cfo #accounting #fractionalcfo #ceo #virtualcfo #business #entrepreneur #parttimecfo #smallbusiness #chiefexecutiveofficer #finance

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🚀 The Myth vs. Reality of Startup Success 🚀 **What most think you need:** 🌟 Celebrity investors 💸 Throwing cash at top-tier talent 💰 Bags of venture capital 🏢 A trendy office with an endless supply of beer 📰 Buzz in TechCrunch or Economic Times **But, here's the real deal:** 🎯 Tackling a problem that screams for a solution 💪 Unwavering courage 🕰️ Endless patience 📚 Embracing lessons from every fall 🔁 Iteration until perfection 🚫 Refusing to quit 📈 Scaling by embracing the mundane 🙅‍♂️ Saying no to distractions 👀 Overcoming the FOMO and greed trap 🤝 Surrounding yourself with believers Success isn't about the glitz; it's the grind that counts.

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Advice for consumer brands raising later stage rounds: Valuation may be more about your investor’s target return and view of exit value than revenue / ebitda multiples Remember that in CPG there are few exits over $500m Knowing this, most private investors want to underwrite $200-500m exits and don’t want to earn less than 2x That means raising at $150m pre-money in most categories will be very hard Set your expectations right before you go out to raise, you don’t want a busted process Often the solution is insiders who want to increase ownership / exposure if even if means <2x on last money in

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🚀 Biggest VC-Backed M&A Exit in 2024: Auditing platform provider AuditBoard was recently acquired by software investor Hg for over $3 billion. This deal stands out as the largest purchase of a U.S. private, venture-backed company this year. 🎉 Founded in 2014, AuditBoard is a cloud-based platform that transforms audit, risk, compliance, and ESG management. Despite flying under the radar, the Cerritos, California-based company boasts an enviable track record, with over $200 million in annual revenue and profitability. Notably, AuditBoard raised a total of $43.6 million in venture funding over its decade of operations, with its last round led by Battery Ventures in 2018. M&A windows can be slow to open, but when they do, they create nice opportunities for exits. Let’s keep an eye on what’s next! 💼🔍 #MergersAndAcquisitions #MandA #AuditBoard #VC #VentureCapital #VCBackedExit #TechNews #BusinessGrowth #IndustryInsights

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Why do search fund investors insist on searchers making a financial model? There are at least five reasons: 1. They want to know if the business you plan to buy can actually afford to pay off the "loan" they're going to give you, plus have some ROI for the next few years. 2. They want to see if your math is rigorous and if the business is likely to generate enough cash to meet your expectations. 3. They would like to see that you understand the details, interplay and opportunities in the business you're about to buy. 4. It's a forcing function to get on the same page with you about what you're going to do if the business grows slower (or faster) than expected and what you'll do if it needs to be sold sooner than you hoped. 5. They're not investing in the story, they're investing in the financials. If you can't model it, you're probably not going to be able to execute it. It's inefficient, time-consuming and usually imprecise. But it actually helps you and the investor understand what might happen next.

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Big rounds are back. VC Funding is flowing. In April, there were 28 fundraising rounds announced with >$10M in funding. We've seen private market (pre-launch) deals valued >$3B recently. Private Markets are hot. Public Market comps (FDVs) are hot. But who will buy our multi-billion dollar bags? Deal Flow Digest April w/: - Recap of largest web3 funding rounds - Airtable with ALL the data - Hackathons & Demo Days - VC Fundraises Read more here: https://lnkd.in/g7V4KrAj

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Executive Edge | Issue Two: Suite Success. Should a case study approach be used to successfully hire C-level talent? ------- If you're a #cfo currently working in private equity, venture capital (or other investor types), or, you're a business seeking to hire transformational finance talent Camino Search specialises in head-hunting & consulting for investor-backed tech businesses. Globally. #fd #saas #pe #privateequity

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We love seeing founders be able to keep their equity and take advantage of non-dilutive funding sources⚒️. We're excited to collaborate with Stacy Chin, PhD leader of KeepYourEquity.co, who has secured over $15M in SBIR/STTR grants for startups across various sectors. She's written a guest blog post sharing her insights on navigating the competitive landscape of grant funding 💰. Some highlights: ❇️ Understanding SBIR/STTR: A lifeline for startups, offering up to $2 million in non-dilutive funding! ⏺️ Learning how to overcome hurdles and capitalize on the golden opportunity. ❇️ Gaining essential tips on outlining your go-to-market strategy, choosing the right program, and preparing thoroughly. ⏺️ Benefiting from Stacy Chin's 10+ years of grant writing experience and her extensive track record in securing funding for startups. Read More in the blog post linked in the comment below 👇🏾 #SBIR #STTR #GrantFunding #StartupSuccess #SmallBusiness #KeepYourEquityCo #ShayCPA #cpafirm #techaccountants #startupaccountants #techstartup #techcompany #nondilutivefunding

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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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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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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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📈 Venture Growth: Largest Deals and Market Insights from second half of May! 📉 Bittersweet fortnight in the venture capital world as data points to an opening IPO window while new raises and overall exits get pummeled! Dive into my latest blog post for in-depth analysis of the biggest deals and market trends from recent weeks: 🚀 Key Highlights: - **AI Funding Boom:** Despite an overall VC funding slowdown, AI startups are attracting significant investments. - **Biotech Bonanza:** Companies like AltruBio and Ubiquity Bio secured substantial funding for drug discovery and treatment. - **IPO Window Opening:** Renaissance Capital's IPO ETF is outperforming, with strong debuts for companies like Reddit and Rubrik. - **VC Challenges:** Despite high AI valuations, slow exits and a rise in flat and down rounds are impacting VC fund returns. - **Dry Powder Dilemma:** Despite a surplus of uninvested capital, VC fundraising lags behind 2023 levels. - **Hydrogen Hype:** Startups focusing on low-emission hydrogen technologies are experiencing a funding surge. 🌟 **Mega-Deal Round Up:** - xAI ($6bn) - Anduril ($1.5bn) - ScaleAI ($1bn) - Vantage Data Centers ($750m Debt) - PolyAI ($500m) - Flipkart ($350m) - Ubiquity Bio ($300m) 🚀 **Upcoming Deals:** - Cohere (AI): $500m-$1bn - Cresta: $650m - Poolside AI (AI for developers): $450m 📈 **Upcoming IPOs:** - CoreWeave - Raspberry Pi ❗️ **Big Bankruptcy Signals:** - Brilliant - Stability AI - Cazoo 🔑 **Key Venture-Growth Funds:** - RedBird Capital Bonus! Why pension funds are avoiding VC and how much money does AI really make? Full blog post: https://lnkd.in/ep2VDkx5 #VC, #tech, #markets, #IPOwindow

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It’s crazy - when you enter the startup game there’s no “crash course” on employee equity. We essentially trade four years of our lives for an illiquid bet on a single stock that may make us extraordinarily wealthy. But we fail to understand the basic mechanics of these strange wealth instruments. So I wrote an entire series on employee equity. But before we get to that - two things I want to make clear: 1) Employee equity is NOT too difficult for you to understand. You do NOT have to be a “finance person”. You ARE smart enough. 2) It’s silly to just PUNT on this stuff because you don’t want to ask the “dumb” questions. So fear not! I’ll ask (and answer!) them for you. If you work at a startup but don't understand: -What a 409a is -How stock options are taxed -How secondary sales go down Then you might be leaving money on the table. Let's change that. Check out the series here: mostlymetrics.com

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The face you make when you realize that you have become pretty good at sourcing off-market opportunities and have private equity and family office investors ready to back you, but you don’t have enough talent to take advantage of those opportunities. With that said, if you know of anyone in the commercial bakery, dry cleaning, food distribution, or commercial laundry space who is looking for board and/or C-level opportunities, please let me know. #boardadvisor #clevel #executives #commercialbakery #commerciallaundry #drycleaning #fooddistribution #privateequity #investmentbanking

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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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Seed to Series A has the biggest drop in valuation multiples → Seed has a median multiple of 13 to 53x → Series A sees a 10 to 24x multiple Which means that it’s possible to grow revenue AND still see flat round if you’re not focused on the right milestones Let’s run through an example so you know what to avoid That may or may not be similar to my experience 👀 ➡️ $4M Seed Round at a $20M post-money valuation To unlock your seed round, ideally you were able to show happy customers This is what I consider Problem Solution Fit So in this example... → that’s $500K ARR split across a few large accounts → so we raise a $4M seed round → at a $16M pre-money at a 32x multiple Giving us a $20M post-money valuation Now, we aren’t worth $20M right now This entire valuation is based on the future expected growth For your seed round, you tell a story on how the future will unfold (backed up by problem solution fit signals) and VCs pay a premium today for those future expectations ➡️ $20M pre-money Series A after 4x growth? So we’ve raised $4M in our Seed round and we’re ready to put that money to work 💪 But, VCs pay a premium at our Seed round for two things: → That we’ll figure out our go-to-market fit → And that it’ll translate to venture scale growth And remember, the higher your seed multiple… the higher the expectations at your Series A So in this example, let’s say in the first 12 months things are looking great → We add a few more big accounts → We expand your existing accounts → And we 2.8x revenues to $1.4M So far so good 🙌 But we haven’t quite figure out a repeatable & scalable go to market strategy In fact that growth was from different use cases, different products, across different segments and mostly from existing accounts that are now almost tapped out 😞 But that’s okay, because revenue went up right? So in the second 12 months we start to fall off the growth curve → We add a few more big accounts again → We expand our existing accounts again → But we only 1.4x revenues to $2M So that’s 4x revenues since our seed round But that was 24 months ago now and we’ve only grown 42% in the last 12 months At our Seed round VCs paid a premium 26x revenues. But we’ve missed both GTM fit and Venture Scale growth So we go from a healthy Seed valuation multiple to the low end of the Series A valuation multiple curve And end up with a flat round 🤯 This is obviously illustrative to hopefully give more clarity on why it’s important to focus on the milestones Hit those milestones... And even though the multiples drop, your valuation goes up 🚀 -- ♻️ Repost to help another founder Click 'visit my website' to register for my free 7 term sheets training session on how to get multiple term sheets from VCs

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As lenders to late and growth-stage companies, we're often asked: “What exactly do you look for in potential borrowers?" In my 30 years of experience working in the venture ecosystem, I’ve seen what qualifies some businesses to get the financing they need. Here is what we typically look for: ✔ Proven Business Model: Those with validated product-market fit, recurring revenue streams, and predictable cash flow are typically less risky and more likely to succeed in repaying their debt obligations. ✔ Stable and Diverse Customer Base: Borrowers with a stable and diverse customer base demonstrate a reduction in concentration risk and lower dependency on a single revenue source. ✔ Strong Management Team: At Runway, we look for entrepreneurs with a track record of success, industry expertise, and a clear ability to execute a business plan. A strong management team signals confidence to the lender that the business will be able to navigate challenges and drive business growth. ✔ Capital Efficiency: Startups that have effectively managed their capital resources, are clear on how the funding will be used, have minimized burn rate, and achieved meaningful milestones are strong candidates to utilize debt financing. ✔ Equity Backing: Previous equity financing by an established VC can provide additional validation of a company’s business model, market opportunity, and growth prospects. ✔ Exit Strategy: Those with a clear path to profitability and viable exit (such as through an initial public offering or strategic acquisition) provide assurance that the debt will be repaid in a timely manner. If you’re thinking about how to grow your business, and exploring debt as an option, keep this in mind!

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https://lnkd.in/e-Cc-PhA Just wrapped up a case study highlighting some successful value creation work for a vertical software company. After a funding event, it can be tough for management teams to align on which initiatives to tackle first. Here are a few tips from my experience: 📈 Prioritize Compounding Benefits Start with initiatives that enable or build capabilities. These early projects are not the most glamorous. The long term value is the momentum they create and tone they set. They pave the way for bigger wins down the line. 🚧 Address Bottlenecks We identified and fixed a major technical bottleneck in the sales funnel. This gave us an immediate boost to revenue and win rates. The less obvious win was a finding that our marketing efforts were more effective than we thought. Many opportunities fitting the ideal customer profiles were getting stuck at the bottleneck! ✴ Find the Triple Word Score Initiatives Focus on initiatives that add value across multiple valuation categories like revenue, margins, and multiple expansion. My favorites are those that improve operating leverage and scalable unit economics. Operating leverage improves as each dollar of increased revenue earns a little more Operating Margin (EBITDA) over time. In the case study, I renegotiated two of the largest variable cost supplier contracts, leading to immediate improvements in unit contribution margins and setting the stage for increasing margins as revenue grew. This is a valuable function of a durable business model. Most teams agree on what needs to be done, but not always on the order. Choose initiatives that start building a solid foundation for future investments or the Quick Wins with high impact. A few good articles that touch on the technical concepts.. Healthtech: Show Your Magic | Andreessen Horowitz  https://lnkd.in/eGkDnkiG The Gross Margin Problem - Bottom Up by David Sacks https://lnkd.in/e9J2Eqaa

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