Matt Domenici’s Post

Failure is not the end but a necessary step towards success. Every failed company fails in its own unique way, making each story a valuable lesson. #Braid raised $10 million in 5 years before shutting down. Learn from their failure and check out this insightful post by Amanda Peyton at https://lnkd.in/d8F-49zK. Remember, sharing these stories is critical to learning and improving.

It's a thing of beauty in this business when you seed a company and they execute to a tee. That's the case with our Work-Bench portfolio company AuthZed which just announced their $12M Series A led by Mark Crane of General Catalyst. The company possesses 3 attributes that contributed to this raise: ⚡ Incredible development velocity 🤝 Relentless customer focus 😎 Hiring a best in class team 𝗕𝘂𝘁 𝘁𝗵𝗲𝗿𝗲'𝘀 𝗮𝗻𝗼𝘁𝗵𝗲𝗿 𝗸𝗲𝘆 𝗲𝗹𝗲𝗺𝗲𝗻𝘁 𝘁𝗵𝗮𝘁 𝗳𝗮𝗰𝘁𝗼𝗿𝗲𝗱 𝗶𝗻 𝗵𝗲𝗿𝗲: 𝗣𝗮𝘁𝗶𝗲𝗻𝗰𝗲 The company got going in earnest in 2021, a time when VC dollars seemed to fall from the sky and founders couldn't seem to spend it fast enough. That's not the case with Jacob Moshenko, Joseph S., and Jimmy Zelinskie though as they made sure to "nail it before they scale it." We've had the benefit of knowing the founders for the past decade and seeing the thoughtfulness in which they build product and get it in customers' hands (including some of the largest tech and financial services companies in the world) has been incredible to witness. As their co-founder/CEO Jake put it: "The overwhelming pattern during the COVID ZIRP years was to over-hire, and then when the market forces shifted, to panic. Where most companies might try to raise money when things aren’t working, at AuthZed we’re raising money because things are clearly working" Check out Jake's full post on the AuthZed blog (and linked in the comments) Congrats to the team! Onwards and upwards 🚀

Most founders should not raise money. Especially first time founders. The discipline and resilience that is formed as a result of building on hard mode pays dividends far into the future. When I started my business in 2016, there was a cohort of first time founders who raised money and who bootstrapped. As of today, none of the businesses that raised money are still operating. Those who raised made fancy hires, got a nice office, and spent money on things that didn't really matter. Those who bootstrapped focused on unit economics and cash flow, building a very important muscle often overlooked. Beyond a lack of financial discipline, founders who raised money adopted a mindset of growth at all costs. But as the market shifted to favour profitability, they (and their business models) were unable to adapt. I'm not against raising money, but it should be done thoughtfully and for the right reasons. Generally to accelerate growth with a business model that makes sense. Very few businesses need to raise money to get to PMF. Assume you're not one of the few and find a way. The lessons you'll learn will be worth it.

The #1 mistake i see in the fundraising decks of startup founders is not making the ask clear. It sets up the stage, makes a strong case and then just leaves it wide open. 1. Make it obvious that you are asking for money and how much you are raising 2. Include some basic info like what the min participation amount would be, if it is a priced round or a CCD and what terms (some high level stuff) so that folks can come back to you with the appropriate answer. Don't leave things hanging. Founders are not the greatest of closers, but you don't get what you don't ask for. And most angels would assume you are looking to raise the amount as one cheque or so, whereas if you indicate that the min participation amount would be 5L, you'd have more participation.

For an early-stage startup, how do you attract talented people and offer them a reasonable compensation package? Working Answer: Aside from cash components like base salary and bonuses based off certain performance milestones or varying metrics, equity compensation is the third typical bucket, and it is often a driver in rounding out a reasonable compensation package for a startup who probably cannot offer market terms like a middle market (and larger) company) can offer. In this instance, we are talking stock options. For all of you, are you seeing any particular or noticeable trends with regard to the size of the stock option pool? Just curious what everyone is seeing out there. Related, I am also cross-referencing Carta’s release of company data on varying sizes of the option pool for companies at different revenue stages, I am including this data as-is and without further commentary. https://lnkd.in/g6xhYs9v

Fundraising is tough. Especially throughout the Summer break. To make it a little easier, we're planning an angel investor party 🥂 So, if you know a founder who is fundraising, let them know. If that's you, leave a comment, and I'll contact you. Or apply on angel.novabook.com We're working out the details, but think: 📅 mid-August 😇 active investors 🏠 Marylebone, London 💰 founders raising £250k - £5m 📜 no pitches or crowd Q&A, just relaxed 121 networking At Novabook, we want to support founders beyond our accounting services, and fundraising is definitely one way to do this. One criterion is that you must be "investable"—ideally, you have a powerhouse team, a working product version, initial traction, positive customer feedback, a growing pipeline, or other proof that you're ready to throw more fuel on the fire.... but that's the ideal case. More details to follow soon.

WHY DO WE PRAISE FUNDING OVER PROFITS AND PURPOSE? Congrats to Jonathan Barouch from Local Measure and Alisdair Faulkner of Darwinium for their fund raising successes. #Bravo But I have to ask a rhetorical question or two. Did they find the finance because they're "high-profile"? Are the businesses fundamentally sound? Are they profitable? We seem to laud those who raise big funds regardless of their performance, and growth is considered to be more important than profitability. And what of #purpose? Other than solving a customer problem, are these businesses for good, or are they just in it for the money? With 2500+ happy business customers Jonathan Barouch has the perfect opportunity to make a serious #GlobalImpact. Surely some feel good stories about how their community has transformed the lives of those far less fortunate than us would look great on their latest news page. Whadda ya reckon Jonathan Barouch? You up for doing some good? #MrSaaSSays - Tomorrow's businesses will all profit with purpose. https://lnkd.in/dyBg4RG2

Two months ago a TBC client had to fire all their employees. Last week they received a #termsheet. The wire hit today. Here are 2 things we did & some advice. 1. Re-evaluated terms. We knew that we’d have to raise a #downround based on the state of the company. We took a look at comps and decided what we were comfortable with regards to #valuation. We also identified other areas we would need to compromise on in #negotiations. Things like #boardseats wouldn’t be something we could holdfast to. 2. Re-worked #expenseprojections We took a look at our #UseofFunds. Obviously with no staff that was easier to do. But to make the deal work the investor needed to see and agree to the budget. So we re-evaluated where we planned on spending money and looked at what we needed to move the business forward. For example, instead of focusing on bringing on sales leads part-time we looked at where our customers were showing up and decided to allocate funding to travel to ensure we were exactly where our customers would be. The goal was to go to where the customers were so that we could ensure there was #ROI on money being brought into the business. 3. Advice: Understand that in markets like these, there will be #downrounds. A down round is when the value of a business when you are fundraising is below the valuation of a previous fundraise. IE. you raised a Pre-seed at $10M and you are raising your Seed at $8M. Word to the wise: Not only are there potential to be down rounds but investors are scrutinizing EVERYTHING. Do this: - Rework #projections that show how you plan to hit #profitability - Make sure all money coming into the business is going toward bringing in more revenue And that’s how we turned an investor’s no into a yes. TL;DR - Re-evaluate negotiation terms - Re-evaluate where and how you plan on spending the money - Make sure you have a plan for how any money in will turn into revenue and hit profitability Everybody’s business and situation is different but let me know if you have any questions about this process. Happy to provide my perspective below. #fundraising #startupcapital #seedround

A lot of founders feel lost after they’re done fundraising—especially if they succeeded. Now there’s pressure to spend the money they raised. 💸 There’s pressure to be accountable to investors.And they may need to develop new communication skills they never needed before. We’ve spoken to a lot of founders, and we boiled their advice down to 3 of the best tips to succeed after a raise. Find out what they are 👇 https://lnkd.in/gFmMMyX4

The ultimate guide on how to fail your fundraising If you’re a founder and you hate raising money from VCs This guide is for you 1) Start your fundraising when you need the money 2) Don’t have any traction—no client, no revenue, nothing! 3) Make your pitch deck super long: 20+ pages, 500 words per page 5) Ask your grandpa to take care of the design of the deck 4) Send cold emails to funds that don’t invest in your industry 5) Ask for VC introductions from people you don’t know 6) Go to startup meetups with founders who have never raised 7) Build a startup where your background is irrelevant. 8) Stop trying to find investors after one month  9) While you fundraise, stop working on your company 10) Don’t get your pitch deck reviewed; you know better  11) Don’t put investors on an update list after you meet them 12) During VC meetings, speak as much as you can 13) Don't track your VC outreach That’s it! if you follow those steps, I can guarantee you will never raise! Thanks, me later ---   Like this? I'm Benjamin. Click my name, follow, and 🔔