Trevor Mason’s Post

There's been a lot of discussion lately, & understandably so, on the lack of liquidity for LPs & what reckoning that may bring for fund managers (secondary fund anyone?!?). Many have characterized the IPO or M&A markets as "lukewarm" at best & before I saw this chart, I would have agreed. But this data surprised me. The number of M&A exits hasn't grown vs. the post-COVID mania of '21 & '22, but it's not declining either. The growth in exits in '23 & '24 is still ~2x or ~3x vs. '19 & '20! According to Peter Walker, of the ~42k startups currently on Carta only 288 were acquired in 2024, an exit rate of just 0.7% 😳. It's still just as difficult as ever out there, but there are reasons for optimism & a case to be made for resiliency if you look hard enough.

Really cool to see #AnnArbor-based Voxel51 raising a $30MM Series B, led by Bessemer Venture Partners. What does Voxel do? Enterprise #AI models rely on huge data sets across different modalities to power outputs, but the underlying infrastructure can be overlooked. That's where Voxel plays, providing an "orchestration layer to help machine learning teams centralize, manage, and prepare the large volumes of data required to build AI applications." Did I mention that the founders have University of Michigan ties? Go Blue! https://lnkd.in/g9QpfjaH

These are GREAT programs for Michigan-based startups, regardless of industry, to not only accelerate progress but also get access to the capital you need to seize momentum. Applications close in just 10 days!

Raising a #venturecapital fund right now is incredibly difficult...unless you're Andreessen Horowitz. ���� Axios reported yesterday that the eponymous fund closed an eye watering $7.2B in new capital & instead of focusing on stage, will focus on sectors. For example: $3.75B focused on growth 📈 $2.25B for AI infrastructure & AI apps 👨💻 $600MM for "American Dynamism" 🇺🇲 $600MM for gaming 🎮 VC is dead 💀. Long live VC! 🤑 Kudos to Kia Kokalitcheva for the scoop 🙌

You don’t have to like it, but finance is the universal language of business. Even for startups. There’s a world of difference between what makes sense to include in a model for a startup vs. a publicly traded company, but those nuances don’t mean you throw the exercise away entirely. Startups need financial models as a backstop to the story they are telling about growth & how they will eventually make money. Because businesses make money, hobbies don’t, & I don’t invest in hobbies. In mature companies, the model is the story. There’s no better way to test the feasibility of a startup’s story than with a financial model. All of the startup’s key “need to believes” manifest themselves there in an inescapable way. Models are the treasure map to trust, which is what investing in startups is about anyway. As others have pointed out, good models do not need to be endlessly complex or cover some arbitrary 5-year timeline. Instead, focus on the elements that make the most sense for you & know them cold. Know where your model is sensitive & why. Know that you’ll never really “finish” your model & make peace with that (this can be a sobering reality for some). Your model will be iterative, and it should be as you measure and learn.

🤔 insights from Peter Walker & the folks at Carta on rolling GP capital calls. "The rolling 3-month average of called capital crossed $1 billion in November 2023 for the first time 16 months." Speaking of liquidity opening up, Reddit, Inc.'s shares were up nearly 50% on the first day of trading post-IPO. Astera Labs' shares rose more than 70%, valuing the company at close to $9 billion. Hopefully signs of broader momentum in #VC.

I had a conversation this morning with a Midwest founder who happened to be in LA at the moment for a conference. “How’s the weather?!?” I joked, expecting his response to make me jealous against the backdrop of the late-February day in Michigan I would experience. “It’s actually nicer there than it is here” he quipped. It was 66 in LA today; 71 in Ann Arbor. It was 73 in Detroit, Flint, & Saginaw, setting each city’s all-time record high for February. Gaylord, Michigan, one of the state’s popular ski destinations, reached 66. The low will be 13 degrees there tomorrow & there’s a “medium to high chance” the city receives at least 4” of snow. The ice skating rink at Millennium Park in downtown Chicago melted. A few brave souls even tried swimming in Lake Michigan (photos courtesy of the The New York Times). After my founder conversation, I picked my Jeep up from the dealership after an oil change & it was so nice outside that I took the tops out. Normally I’d be ecstatic – nothing beats catching some vitamin D in the Jeep. But not on February 27th. Today felt like an ominous harbinger of #climatechange things to come. According to Climate.gov., 2023 was the warmest year on record since 1850, when global record keeping began. Nor is 2023 an outlier: the 10 warmest years in the nearly 175 years that officials have been keeping track have all occurred in the past decade. We’re on a torrid pace. If I could magically waive my fundraising wand & start a new #VC fund tomorrow, then it wouldn’t be focused on #AI, or #FinTech, or #SaaS. It’s #ClimateTech & it’s not close. 

I really enjoyed getting to know the M3D team & seeing its tech up close throughout this investment process. It's rare to see such mature tech at this stage & I can't wait to see how their intraoperative imaging solution arms surgeons with even more tools to improve patient outcomes. 🚀

Ok hiring managers, which one of you is it?!? I've been asked some non-traditional interview questions, but this one takes the 🍰 🥇 🏆 ...btw, are you a 🏴☠️ or 👮♂️? cc: Adam Karpiak