Mark Begert

#ProjectForABillion Today, in our regular column, I want to talk about the Cariloop project, which raised $20 million in a Series C round this spring. The lead investor was ABS Capital, which is also known for its investments in PowerReviews (recently exited) and LabConnect. But let's get back to the project in the Mental Health category. By the way, if psychologists ever asked me how to get rich and build a capitalized business, I would recommend working in their specialty and creating projects for corporations in the psychological and mental health category. In 2023, $435.2 billion was directed to this industry (this includes all project investments, not just venture capital). While there are still some managers in Russia (and elsewhere) who don't believe that a depressed employee who sleeps poorly, is torn between caring for children, and walks on the parapet at night is unlikely to create high results and a sustainable team, managers of almost all large corporations around the world are paying just as much attention to mental health as to physical health. Maybe these naive people are indeed investing half a trillion dollars so that employees can more efficiently scold their parents and school teachers? I've heard that silly version too. Cariloop is a platform where each employee is assigned a Care Coach with whom they can share or, in light cases, delegate the search for solutions to problems (although the platform indicates various types of problems, medical issues are most often mentioned in examples) not only for the user but also for their family members: children or even parents. A Care Coach can help navigate the healthcare system, provide educational support (about diseases, care methods), emotional support, and, if needed, legal or financial assistance. Special emphasis is placed on the fact that health coaches interact with each other and exchange information (how they do this without violating confidentiality, I will clarify later). I will not dwell in detail on the business efficiency claimed by the startup. It is clear that there are very beautiful infographics and analytics on the website about how much employee efficiency and, consequently, business efficiency improve when interacting with such a service solution. Check it if you want. I am skeptical about trying to measure the impact of employees' psychological health on business in numbers. However, evaluating the results of a business managed by psychologically unhealthy employees in numbers is much easier. We can start from there. *This is not an investment recommendation. **This is not a project the author has invested in (yep, it's required now). ***This is not a project I've been studying in detail for 10 years; it's just my subjective assessment of one of the most interesting projects that raised a round in the reporting period.

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VC exits next 10 years - much fewer IPOs - much smaller strategic M&A - PE will become the norm I explain in this clip how it will affect VC Full episode: https://lnkd.in/gaJ-TWZE

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How is AI transforming the future of defense and warfare, and what role does Austin play in this evolution? On today’s Austin Next episode, I sat down with Charlie B., Founder and CEO of both Valkyrie and their newest spinout, Valkyrie Andromeda, to discuss not just the technological advancements shaping modern warfare, but also the philosophical, inspirational, and cultural underpinnings behind those advancements. Episode Highlights: 🌟 What is Andromeda? Synthesizing large volumes of information quickly and accurately to make informed decisions. 🎥 Media Narratives: How pop culture and media, from Terminator to Oppenheimer, shape public perception of technology. 🤝 Industry & Defense: History has shown that industry and defense have always been intertwined, with modern tech entrepreneurs playing roles similar to past industrialists. 🔢 Probabilistic Thinking: The critical role of thinking in probabilities and confidence intervals to manage high levels of uncertainty. 🔮 Intelligence Community in Austin: "I think the next thing for Austin...we're going to see a big push to support the intelligence community the way we've seen a big push to support the defense community." ⬇️ Find links to the full episode in the comments. What’s Next?

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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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Thrilled to share the achievement of one of my investments: Atomontage Inc., a revolutionary deep-tech company developing groundbreaking 🤯 Atomontage's Virtual Matter technology that represents a paradigm shift in 3D content streaming and collaboration, allowing for entirely new ways to stream and interact that can be used for example in social gaming experiences as described in the article bellow 🎮 . And guess what? It’s not just for gamers. Atomontage’s technology allows completely different user experiences of everything from architectural walkthroughs to medical simulations or any other applications where real-time 3D interaction is of utmost importance. You can guess the type of classified applications 😀. 👩‍⚕️Their technology is the future for 3D real-time interaction and let's see if my bullish assumption on Atomontage's potential to disrupt the industry will materialize. 🚀 #venturecapital #startupinvestor #deeptech #gaming #3Dcontent https://lnkd.in/ePAFtT7x

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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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🚀 "Corporate Venture Capital: Navigating the New Normal" 📈 🌟"More than 70 new CVC units started in 2023, and the number of corporate venture capital organizations grew 10x over the last decade," shares Sneha Sanghrajka Shah, EVP at SEI, highlighting the rapid expansion of corporate venture capital (CVC). 📈From unexpected players like Anheuser-Busch, General Motors, to tech giants, CVCs are reshaping the startup ecosystem, with as many as 2,000 active units worldwide—a tenfold increase over the last decade. 🌪Yet, as Patrick Eggen, founding partner at Counterpart Ventures, points out, the CVC terrain isn't without its challenges. While AI investments surge, CVCs face a mixed environment, with some scaling back while others forge ahead. "As interest rates remain high and economic volatility persists, a corporate parent supporting a CVC right now might be hesitant to experiment or take risks," says Eggen.🔮 🎯However, seasoned investors like Matt Sueoka of Amex Ventures remain optimistic, foreseeing continued growth and evolution in the sector. In a landscape marked by change and opportunity, CVCs are poised to play a pivotal role in driving innovation and shaping the future of entrepreneurship. 💼🚀 ✅ 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 #CorporateVentureCapital #Innovation #StartupEcosystem #AIInvestments #BusinessStrategy 🌍💡

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How VCs Become Assholes https://buff.ly/3KIih1K by @NFX daily mantra for First-time VC Fund Managers “Some investors truly don’t know they’re being assholes. They live in a reality distortion field.” touché 🔥💰 #rafAIgual #founder #investor #building #relationship #vc #game

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Partnering with startups can help companies to "solve a product problem, create a new avenue for revenue, accelerate R&D, or accelerate time to market for a specific product," according to Otilia Barbuta, principal at HP Tech Ventures, the venture capital arm of HP. She was talking at a breakout session at Circularity 2024. "There are solutions in the market created by startups and in this circularity realm, I think it's more important than ever to partner with [them]." #climatetech #startups #climateVC

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That’s very accurate. PE Buyout Funds. Publicly traded parent companies with corporate VC arms scooping up the most profitable sector-specific subsidiaries. Fund of Funds get more popular and much more strategic. Family Offices dominate the landscape. Not investment advice.

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This film was made with OpenAI's Sora video generation app: A lot of people say Hollywood is in for a rude awakening. I’m more curious how the democratization of high quality videos will help smaller film and music studios contest the industry giants. And while I can recognize AI video still has a long way to go, I for one am a fan of the democratization of creativity. I love the idea of hundreds and thousands of creative human beings across the world having access to high quality resources without needing an absurd budget. But with everything there are downsides, and this is no different. But I want to know what you think! Do you think democratizing video and image generation is a good thing? If you want to learn more about breakthroughs like this and how you can use it to grow smart - I explore AI, innovation & strategy in my newsletter read by professionals and execs at the world's leading companies: www.scottcaputo.com

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Is SBF's Jail Sentence Long Enough? Watch the full episode here with special guest Danielle Marie: https://lnkd.in/ggniBAzF Watch or listen to the Briefly Creo Podcast on all platforms, including YouTube, Spotify, Apple Podcasts, Amazon, Audible, and Google Podcasts. Find us on socials @creolegalau Our website: https://creolegal.au #crypto #auslaw #cryptolaw #cryptoregulation #bitcoin #ethereum #blockchain #blockchainlaw #cryptocurrencies #cryptonews #crypto #FTX #SBF #sambankmanfried #sambankman #solana #fraud Music by Music Unlimited from Pixabay.

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Successful ventures that have achieved Product-Market Fit and have scaled their operations will probably face this new reality: 𝗧𝗵𝗲 𝗻𝗲𝗲𝗱 𝗳𝗼𝗿 𝗹𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 𝗳𝗿𝗼𝗺 𝗽𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀. As explained by Mark Suster, this liquidity is most likely to come from Private Equity firms, who have the expertise to evaluate companies based on long-term fundamentals, much like the approach taken by Warren Buffett (rather than the speculative one from crypto-traders 😉). Valuation is not a one-time event but a dynamic process that follows a chain-like logic, where each link is interconnected. An irrational (high) valuation early in the chain can have significant repercussions later on, leading to fewer financing or liquidity options - as professional investors will not accept it. You may avoid this by establishing a clear valuation roadmap that demonstrates a consistent risk/return rationale for each type of investor, from business angels and venture capitalists to Private Equity firms and the Public Market, spanning from the first funding round to the eventual public offering. #EntryPriceMatters #ValuationRoadmap #PrivateEquity

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US heatmap of fundraising activity. These are companies that have used shipshape.vc, where they are located, and how much they are raising. Any surprises? #usa #capitalraising #startups #fundraising #founders #venturecapital #investors #vc #vcfunding #technology #startup #tech 

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Venture Studio model to build cash flow companies? It can beat VC IRR with fast cash return. 👇 Let’s unpack a hypothetical studio focused on building consulting companies. How might a startup studio that builds consulting firms work? Let’s start with a model of a single firm. The studio invests $500k for 50% share of the profits (founder salary included in costs), providing dedicated support in building, launching, and growing the firm. The goal is to become cash flow neutral in 18 months. If not, assume failure and zero funds are returned. Assume $1M in revenue by the end of year 3. Assume a profit margin of 60%. Assuming success and ZERO growth above the $1M in annual revenue, from year 3 on, the studio would receive $300k for it’s share of the $600k in profits. IRR for the 10 year span? 36% What happens if you factor in an annual growth rate of 25%? At the end of year 10, the consulting firm would have an annual revenue of $4.768M, profit of $2.861M, a distribution that year of $1.43M for an IRR of 49%. ❗49% IRR❗ But this is for building ONE firm with 100% success rate. Let’s apply the studio model and add in a failure rate. The studio raises a $5M fund to build 10 companies in 3 years on the same terms as above. Let’s keep the 25% annual growth with a year 10 revenue of $4.768M. Assuming a failure rate of 50% that return no money. Let’s assume 3 companies created in the first year with 2 surviving, 4 companies created in the second year with 1 surviving, and 3 created in the third year with 2 surviving. Returns to the studio begin in year 3 at $300k and growing to $5.836M in year 10. Total IRR? 25%. ❗25% IRR ❗ Interesting? 25% is on par with VC funds. Better than average VC fund returns too. Now imagine a more realistic $250k to start each company -> Double the IRR to 50%. Now Imagine using this approach with a focus on industries, demographics, or geographic areas -> Targeted Economic Development. Now imagine this with an evergreen investment fund to cycle the returns and continue building consulting firms with what would amount to a lucrative annuity payment to investors. Focusing on the VC path is not the only option for venture studios. 🤫BTW. This type of studio has been built and operated before. Successfully. If this model is of interest to you, let me know in the comments! #startupstudio #familyoffice #lp #entrepreneurship

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Fantastic event (and ecosystem) that Patrick Meier, PhD and his team at the Climate Robotics Network are creating. Highly recommend you check out the Climate Robotics Summit, done in partnership with EPFL, SOSV, Cybernetix Ventures, ETH Zürich, and Worcester Polytechnic Institute. I just had the pleasure of moderating a panel just now on investing in climate robotics, alongside Urvi Nagrani, Malini Samtani, Sashi Jayatileke and Fady Saad. Here are some of the key insights: 1) Applications for robotics to climate challenges (adaptation AND mitigation) are enormous: support to farmers as conditions for humans become too hot to farm for long hours, drones that help capture data on forests and wildlife, supporting with installation of maintenance in large solar fields, wind turbines, circular economy applications - e.g. de-manufacturing - to just name a few. 2) Investing in robotics is simply different - it doesn't fit the standard SAAS VC strategies, often having a lot of engineering input and require non-dilutive funding upfront - e.g. similar barriers to investing in hardware writ large. Thus, it sits in a bit of its own asset class, so investors and entrepreneurs alike need to understand how these solutions behave, esp. in the early-stages of building/testing. That said, there is a growing pool of funds that have been specializing in this area. 3) So how do we move robotics solutions up the TRL ladder faster? It can take a LONG time for any robotics solution to be truly market ready. Even when there is theoretical product-market fit doesn't mean that it's ready in investors' eyes. Lots of testing as well as setting proper expectations with customers is critical, and part of this long process. Non-dilutive funding is rare to find in most countries, but in the US in particular there is a growing pool of grant funding that can help. 4) Development finance institutions and donors have a critical role here, especially in vulnerable countries/communities: Robotics could have bit impact in supporting climate solutions in vulnerable communities, but we need to ensure that there is an enabling environment for these solutions, which means that the policy, academic, and traditional finance space (e.g. local commercial banks)

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There's a massive disconnect between VCs and Founders and it boils down to a differing perspective on two critical things: Timeline and Success Outcomes Timeline: VCs: Venture Capitalists typically think in timelines of 5-10 years. Their job is to understand various markets, where they're headed and then make decisions on what will be the key infrastructure in those spaces. They understand that there are going to be big shifts in their portfolio over the life of a fund and don't really get too bogged down on week to week things (unless they have to put a term sheet in!) Founders: Founders are flying by the seat of their pants, trying to make big things happen every day. They'll make projections for a few years but often think tactically about what's in front of them. They are often so busy putting out fires and operating on day-to-day basis that they don't have time to think about the next 2 years. Success Outcomes: VCs: Many VCs expect 75%+ of their portfolio to end up being worthless in the long run. The reason it's sometimes hard for them to care as much is because the success of their fund is not predicated on any one startup success (unless it 100x in which case it can return the fund in its entirety). I've heard of scenarios where VCs have acquired other fund's stakes in startups only to ignore founders because they didn't think those companies would be successful. Founders: This is their baby! They don't view failure as an option and want desperately to succeed. If it fails they likely will have spent years of their lives and hundreds of thousands on their dream to end up having to shut it down. VCs don't feel this pain nearly as viscerally as founders. When it comes to making an investment decision, this disconnect can drive a wedge between founders and investors because neither truly sees the other's perspective. VCs can be wildly successful being right 30% of the time. Founders get maybe a few chances to make it happen. #founders #startups #vcs

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