Arpan Ajmera

Summary: Trucks Venture Capital has announced a new $70 million fund to support early-stage startups in the transportation industry. Led by co-founder Reilly Brennan, the firm plans to invest in a diverse range of companies, including those working on autonomous vehicle tech, electric air taxis, and mobility data platforms. This is the firm's largest fund to date and its investment strategy has evolved to focus on great founders rather than specific sectors or ideas. Key takeaways: Trucks VC has a new $70 million fund to invest in early-stage transportation startups. The firm's investment strategy has shifted to focus on great founders rather than specific sectors or ideas. Previous investments from the new fund include charger installation-as-a-service startup Treehouse and zero-emissions jet aircraft company JetZero. Counter arguments: Some may argue that focusing on great founders rather than specific sectors or ideas may limit the firm's potential for success. The transportation industry is constantly changing and evolving, making it a risky investment for any venture capital firm. #startups #venturecapital #transportation

6

1 Comment

"Simply put, there is too much capital seeking too few opportunities, particularly at the seed stage. Multi-stage firms have eliminated pricing discipline at seed stage and the proliferation of seed firms has made the task of investing at this stage as competitive as it’s ever been, leading me to believe that indexed seed investing in today’s environment will produce poor returns. What does this mean for today’s environment? It’s never been more important to break away from median performance. While there is risk in breaking away from the pack, the risk (at least performance wise) of staying part of the herd is simply far worse. Median returns for the recent vintages are simply terrible. One could argue that funds are still in their j-curve phases, but I suspect this doesn’t explain the divergence we’re seeing between GOOD performers and GREAT performers. More than ever before, it’s clear to me that playing the same game as everyone else will not work, so fund managers should question whether they are really capable of being in the top 5% of whatever strategy they are employing. From a LP perspective, allocators should likely ask the same of their managers and consider whether allocating to indexed mega funds or indexing across too broad of a portfolio of managers is tenable in achieving their return targets." https://lnkd.in/g8GqHY-P

5

リアルテックホールディングスはUntroDに名称変更します。 この社名変更に込めた意味は、未踏の資本主義の実現です。 従来の資本主義では投資対象とならなかった、だが価値があると我々が信じる（情緒的に価値があると皆さんが感じてはいる）領域にまで資金を呼び込む、その呼び水としての開拓者という決意の表明でもあります。 理想の実現に歩みを止めず、進み続けたいと思います。 Real Tech Holdings Co., Ltd. has relaunched as "UntroD," a company pioneering uncharted territories in capitalism. As of June 3, 2024, Real Tech Holdings Co., Ltd. has changed its name to "UntroD Capital Japan Co., Ltd.". We are also pleased to announce that we have redesigned our website to embody our company mission. UntroD, which means "未踏 untrodden," will continue to be the first to step into uncharted territories of capitalism, where there is a societal need but no established mechanism for capital flow, such as the deep tech domain. By investing and proving economic viability, UntroD will continue to create a flow of capital and human resources. https://untrod.inc/

10

Check out my recent post on why President Trump is the forcing function for us to solve the “Missing Middle” and catch the industrial Tsunami of onshoring coming to the US!

84

9 Comments

A definite worthwhile short read that succinctly explains the current profile of VC investing in a historical context. Nurturing innovation should matter to all of us, wherever we operate, so it is important that the investing community does so as well.

7

4 Comments

I recently saw this metric from Carta’s 1Q24 VC Fund Report, which is very concerning. DPI... is nowhere to be found in earlier vintages that probably should start showing DPI. Funding early-stage projects is great, but ultimately, these venture dollars need to exit their investments and pay back their limited partners. That’s where the metric Distributed to Paid-In Capital (DPI) comes in. While managing a fund, we get interim measures during the life of the fund (e.g. IRR, MOIC), but ultimately, “you can’t eat IRR.” If you want to build a lasting venture capital organization, you need to start showing DPI for your fund. Keep in mind that this is traditional VC data from Carta, and is not strictly crypto venture. Crypto venture tends to get liquidity earlier (tokens) and things tend to go parabolic sooner (faster, more unicorns) - but I’d wager that the data here is somewhat similar for Crypto VCs… Not as much DPI as there should be from these earlier vintages. Read the full article, as well as a recap of all the crypto fundraising rounds for August, here: https://lnkd.in/g3eVJ-iF

25

2 Comments

LP Tip #20 out of #50: To re-up or not to re-up A re-up refers to an LP making an additional investment in a fund where they previously invested. Before we dive in I want to share that there are reasons an LP may not to re-up which are not in your control. Here is a short list: ➡️ The LP may have evolved their strategy and needs to scale back the #️⃣ of funds they invested in.   ➡️ The LP was never set up to re-up in the first place. ➡️ The LP could be an individual that found themselves in a cash crunch and overly exposed to venture.  I'm assuming that when you got your investment that the LP explicitly told you they do re-ups. Please do not assume they do. My expectation is also that the LP dug in to properly underwrite the fund. 🏴 Re-ups are not automatic. An LP will have to re-underwrite each fund. The speed of the re-up also depends on how much work was done in the initial investment, who led the investment, level of confidence there existed when that investment was done, and current pipeline of funds. There are 4 flags that may cause an LP to walk away. 1️⃣ Partner Breakups/Changes and Team Turnover:  The biggest risk in Partnerships are whether the Partners will stay together. One LP gave me a framework on how to think through this issue that has stuck with me. Partnership is like a marriage. If one feels there is potential for a breakup, does one believe it will be an amicable breakup? Or, does one believe the spouses will never talk again? If it is an amicable split that is manageable. The Partners can find a way to support the fund. Then the question becomes whether the LP wants to back the Partner/s that remain.  If there is high team turnover. The LP will want to investigate because team stability is used as a proxy for firm sustainability and ability to scale. 2️⃣ Fund Does not Execute on what they Sold the LP:  The LP “bought” something specific and typically it is because they were missing this strategy or wanted exposure to a strategy for the portfolio they were constructing. An institutional LP will invest and write a detailed investment memo flagging all the things you said you were going to do and then go back and compare when you come back to ask for money. If for example you pitched a generalist seed stage fund and you show up asking for money sharing that you invested in deeptech at A that will cause alarm. The same can be said for the number of companies you promised to invest in or check sizes you wrote. If there are big differences LPs will want to know why. 3️⃣ Bad Actions  The fund manager/s does something that is unethical. This is a no go for an LP.  What if the situation is not clearcut? This is different for everyone and requires discussions b/w GP and LP, but most LPs don't want headline risk. 4️⃣ Continuous Underperformance  If it's early days an LP will look at some key indicators to see how you are progressing over time.

17

Thirteen percent of venture GPs don’t plan to raise another fund as the LP pullback spoils fundraising efforts, according to PitchBook’s semiannual VC Tech Survey. That’s double the rate in H1 2023, when 6% said they had no plans to raise another fund. Nearly half of venture firms—44% of those surveyed in mid-2023—had previously pushed back their plans to re-enter the fundraising process, as institutional investors became increasingly concerned with overexposure to the asset class. Overall, venture GPs are more optimistic about fundraising and the IPO market than they were a year ago, according to our H1 2024 Tech Survey analyst note. GPs are mostly expecting asset valuations to get more attractive over the next month—which is supporting market activity, though still at subdued levels. While AI remains a top area of focus, investors have expressed concern of overinvestment. Interest rates remain a key determiner of market activity, as well as the need for founders to temper their valuation expectations. While several managers have pushed out fundraising plans or ruled out opening another fund, the majority cited no changes to current fundraising plans.  #fundraising #investments #Capitalraising #privatequity #emergingmanagers #venturecapitalists #familyoffices #USA #Fundmangers #emergingmangers #earlysatge #hedgefunds #AI #Fintech #Biotech #SoloGps #VCs #GPs #LPs #LimitedPartners #Funds #Investing #Networking #Generalpartners #emergingGPs #Principal #Venturepartner #Anylist #Associate

11

2 Comments

Are #VC exits in standstill and what does it mean for the #CPG companies? Just a handful of large VC-backed companies have gone public since Q1 2022, exiting at only $70bn cumulative worth. i) less than the value recorded in any quarter in the record-breaking 2021 ii) staggering 90.5% decline from 2021’s record highs of $750bn iii) and more importantly the first time the figure has dipped below $100bn since 2016 What does it mean for CPGs? 1. Strategic Acquisitions: As VC-backed companies struggle to justify their high valuations or demonstrate the necessary fundamentals for IPOs, they may get forced to sell at lower price point to a strategic acquirer, and #FMCG players are well-positioned to capitalize on this lack trend 2. Investment opportunities for CVCs: smaller rounds and less competition may enable CPG companies to get stake in the most promising start-ups that would otherwise be quickly scooped by Sequoias and Tigers of this world ;) 3. Less 'well-funded' competition for incumbents: less exits and lower valuations means the large upstarts challenging leading FMCGs will need to be more frugal with resources potentially stifling investments As the saying goes, “In every crisis lies an opportunity.” CPG leaders who will navigate the best this environment may end up winning disproportionally (as we were writing on the topic) FMCG CEOs: 2023 M&A Report – Seven Key Learnings & Seven Predictions For 2024 https://lnkd.in/dT5A-jGZ To receive the corresponding deck, pl. leave your name in comment To get all our insights, follow us/ subscribe to our CEOs newsletter: https://lnkd.in/eR8vDpvE #strategy #zerobasedgrowth #mergersandacquisitions Frederic Fernandez & Associates

15

2 Comments

Does the incoming administration adjust the landscape for VC in the South? Three trends for family offices and VC investors to consider: https://lnkd.in/dVhVvuND

6

Seed VCs are turning to new ‘pro rata’ funds that help them compete with the big firms Alpha Partners, SignalRank and now SaaS Ventures help seed VCs pay for shares when big VCs try to price — or push — them out Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets that gives them the right to buy more shares in a portfolio company during consequent funding rounds to maintain an ownership percentage and avoid dilution. Still, while these rights are not exactly “earned,” they can be expensive. One of the latest trends in VC investing these days are funds dedicated to helping seed VCs exercise their pro rata rights. https://lnkd.in/dRM3RvdA By Christine Hall

13

Summary: Bolt's CEO has threatened legal action against an investment bank involved in their recent fundraising efforts, claiming they signed a binding term sheet for $200 million but did not follow through. Key takeaways: Bolt's CEO believes there was miscommunication at Silverbear Capital, one of their lead investors, leading to confusion about the fundraising deal. A leaked term sheet showed Bolt trying to raise $200 million in equity and $250 million in marketing credits, with a unique pay-to-play structure. The involvement of Silverbear Capital and The London Fund in the deal remains unclear. Counter arguments: Silverbear Capital's partner insists there was no miscommunication and the deal was never discussed or approved. The London Fund has confirmed discussions with Bolt's management but denies any finalized transaction. #venturecapital

2

Last week, I had the pleasure of moderating a discussion on navigating FOAK in climate tech at the Greentown Labs Summit in Boston (which had >600 people!!). Here’s a quick rundown of what was shared by Katherine St. James of Spring Lane Capital, Paris Smalls, PhD of Eden GeoPower, and Hannah Friedman of Planeteer Capital: 🌱 What is the definition of FOAK? We discussed how the term can be controversial - it's almost too general because it doesn't identify what kind of "First" FOAK refers to - first team project? First geography? First of a technology in a sector? First time for the integration of a system? It's also too specific because it has the word "first" in it, which can be anathema to later stage / project finance investors. 💰 Partnerships for Funding FOAK Projects We discussed how important it is to build a blended capital stack & use off-balance sheet capital for a project so you're not using the most expensive equity dollars to fund an infrastructure project with low-ish IRR. We also talked through being creative about using corporate partners to provide in-kind services or ink some agreement (at least an LOI) to attract this funding. 🏛 Role of Government We talked about how government capital is seen by investors & how it can be catalytic for FOAK. Government capital can provide validation that a startup has passed a rigorous diligence process by a third party - and incentives like grants or credits can help improve returns for the first project- but it's important to be doing this in conjunction with getting customer validation and to be able to present line of sight to competitive economics without concessionary capital. 👥 Advice for FOAK startups The panelists offered some very specific pieces of advice for startups going through FOAK: how to get creative with things like revenue sharing agreements or convertible notes, getting smart with project development early on (like with DeveloperU), being careful about using FOAK too liberally with certain investor groups, getting the right commercialization / FOAK talent in and around you early Huge thanks to the panelists and the team at Greentown Labs (Jill Kirkpatrick, Julia Travaglini, Aisling Carlson, etc you rocked it!!) for hosting this discussion on bridging the FOAK gap. Also immensely enjoyed the rest of the agenda. Check out the full recap & videos here: https://lnkd.in/d9ApYe9Y #ClimateTech #FOAK #ClimateFinance #ProjectDevelopment #GreenTech #CleanEnergy

55

5 Comments

Wonderful article about Emily Knight and the whole The Engine Accelerator team on the amazing work their doing changing the world with #ToughTech!

28

Q3 is out and Q4 is in!  This is a great read about Base10's strategic switch showcasing how Carta is simplifying fund administration for emerging managers, which is especially important now rolling into the year-end busy season. 

9

What should investors expect from the VC industry over the next 3-5 years when it comes to exits and performance? Rick Zullo, on X, has argued that there will be a greater divergence between VC funds, with the most successful ones producing even stronger performance, while the median fund return will reduce. I would agree with this as we are likely to see fewer, but typically larger, exits. It will become more important than ever to have meaningful exposure to the small number of winners that drive VC performance. We saw this divergence in VC fund performance very clearly after the 2008/09 financial crisis. As you can see from the chart below, it was the top-tier, established managers who make up our Core Manager cohort that massively outperformed as the market recovered. We have identified three key factors that we believe materially contributed to this outperformance: 1. Quality of portfolio companies. We know that VC is a power law asset class, but the distribution of returns is even more concentrated after a correction. The number of successful exits falls significantly and the small number of VCs able to back these companies will materially outperform. We usually see the best companies actually improve their competitive positioning during a correction. They become more capital efficient, increase market share and benefit from many of their competitors being unable to survive. 2. Availability of capital. In a downturn, even the very best companies will usually need to raise additional capital. As a VC, if you don't have the capital to support these companies and protect your ownership, then you are in trouble. The best VCs can still raise new funds even in the worst of markets and will have the capital to ensure their best companies survive. 3. Willingness to continue to invest during the most challenging periods. The best managers have the experience of managing through prior downturns as well as the confidence (and the capital) to take advantage of the opportunities that a correction creates. This means that they can double down on their best companies, often at attractive valuations, and also access market leaders they may have missed in prior rounds. We have seen a major flight to quality from LPs to date in 2024, with a small number of VCs responsible for the vast majority of capital raised. Unfortunately, this is shutting the stable door after the horse has bolted. Venture capital is a cyclical asset class - corrections are a feature, not a bug. This means that LPs need to construct a portfolio that not only captures the upside as the market rises, but is also resilient during a downturn.

76

3 Comments

This is quite interesting advice and also quite a non-consensus view in the B2B software world. Cross-border founders who are considering the US vs International incorporation question should consider this as valuable input.

12

1 Comment

Interesting data points here. Especially if you want to understand what’s up in VC.

4

Excited to announce our investment in Alta Resource Technologies alongside Leonardo Banchik (Voyager Ventures) with participation from Orion Resource Partners, Overture Ventures, and WovenEarth Ventures. Rare earths are critical in products from magnets to ceramics and it's important for the US to develop its own supply chain. While the US has some of the best rare earth resources, separating them has historically proven expensive and environmentally unfriendly. Alta through it's computationally designed and optimized proteins allows the US to bring back rare earth production with a cleaner, lower capex, and lower opex solution - and that's just the beginning. Congrats to Nathan Ratledge and the entire Alta team. Read more here: https://lnkd.in/gbGnAJn3

60

4 Comments