Jonathan Sills

Big announcement below! 👇 Let's talk about the current state of GP-LP affairs: 🤯Emerging VC managers have absolutely exploded over the past 5 years. 📈 At the same time, more and more data has surfaced that shows that emerging VC firms tend to outperform larger, established firms. 🤔 All of this has made it intriguing but tough for LPs to know where to direct their attention. 🛍 GPs frequently meet LPs at conferences who are window shopping but not committed to the asset class or emerging managers. 🧾 And both crews get overwhelmed by transactional convos. So Sydney Paige Thomas and I created Abundance. Abundance is a private, nomination-based retreat for active LPs and top emerging GPs to form new experiences together and build lasting relationships. Why Abundance? Abundance is knowing that there is more than enough for more than one to succeed. And a single win within a community is a win for the community itself. The journey of an emerging VC manager from 1st close to final close or Fund 1 to Fund 2 is (1) communal and (2) requires an abundant mindset. LPs look for structure and confidence to feel comfortable investing in early VC firms. Yet many of the feeds we scroll and conferences we attend reinforce inherent power dynamics and transactional thinking, which allows scarcity mindset to creep in for emerging GPs. Some of the best events I’ve attended have been intentionally non-transactional, e.g. Camp Hustle, Recast Summit, and other GPs’ AGMs. The fundraising success stories we see usually involve a community (usually of other GPs & LPs) coming together to support and open doors for the emerging GP. We designed Abundance to be an immersive gathering that fosters these connections. Starting tonight, ~100 GPs and LPs are descending upon Seattle for the inaugural Abundance retreat. This has been under wraps for months and I can’t wait to see it come to life! Thanks in advance to our awesome sponsors who were the earliest believers in this vision: Sydecar, Amazon Web Services (AWS), Gunderson Dettmer, & Zelda Ventures. And shoutout to my dad Ed Illig for logo design & Halle Kaplan-Allen being the first sponsor to say yes 🤩 Presented by The Council Capital & Symphonic Capital.

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Founder intuition eats unit economics for breakfast. Yet, understanding go-to-market fundamentals is necessary before raising and deploying capital. A helpful question to ask is "how much do we spend per $1 new ARR?” (Screenshot is from our dashboard at Unloc) It's a useful metric that indicates how a business will likely perform after raising capital, and more importantly that helps founders calibrate spend. But beware: Spreadsheets are only theoretical and never capture reality. Founder intuition is the true leading indicator. Founder mode all the way.

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There are no more easy wins. You have to be as creative about building your business as you are about building your product. That means defensibility, network effects, speed... My colleague Pete Flint on a strategy that's not used enough: https://lnkd.in/gr_ycDQ8 Pete Flint NFX

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new episode alert: Magnite $MGNI CEO Michael Barrett breaks down the future of independent ad tech. we talk competing with Google, why The Trade Desk won, and what actually works in M&A. Plus some great insights on leading turnarounds: https://lnkd.in/eAKc84Qi

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Back in 1997, The New York Times highlighted a “Roundtable in Multimedia” attended by senior media executives. They lamented that apart from a few exceptions like pornography websites and Amazon, no one had cracked the code for a viable 'interactive' media business model. Fast forward to 2024, and Fable has launched Showrunner, a revolutionary platform known as the “Netflix of AI" , which allows users to create their own TV shows with just a few prompts. 📺✨ The way we create and consume content has evolved dramatically. But what does "interactive media" really mean today? We break it down, exploring how it intersects with massive shifts in technology, culture, and new media. And how with a growing "Swipe before Type" generation, there is now an ingrained expectation of interactivity in all digital experiences. We dive into the future of interactive media and gaming and see where we're headed next! Link in comments. #InteractiveMedia #Gaming #AI #TechRevolution #ContentCreation #NewMedia

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"one of his seed-round investors didn’t even want to meet before writing a check. ‘No need, I saw your deck. Send me the wiring info.’ And he wired $200,000.”... That was the glory era of hot new CPG brands. When interest rates were low and investors were looking everywhere, anywhere for yield. Today it is much harder. The reliable Facebook Ads + Shopify combo doesn't work nearly as well, the big cos are muscling their way in, and shelf space is harder than ever to get. "For years, the buzz around Me & the Bees lemonade just kept growing. The Austin-based company charmed its way into recent startup lore with the tale of its young founder, Mikaila Ulmer, getting stung by a bee at the tender age of 4 and then deciding to sell family-recipe lemonade with honey in it to bring attention to the issue of plunging honeybee populations. What started as a family project in 2009 made it from a few local youth-entrepreneurship fairs all the way to a deal with Daymond John on Shark Tank in 2015. It was a business fairy tale, with nationwide distribution in the largest grocery chains, international press attention for Ulmer, and a spot in the 2022 Inc. Regionals as the 36th-fastest-growing company in the Southwest. The H-E-B, the large grocery chain missed a purchase order. And another. Then another..." Interesting analysis of the space in an article by Tom Foster this month's Inc Magazine. Link below. P.S. Why didn't Mikaila turn into the superhero Bee-Woman? 😂 #cpg #shopify #brands #marketing #venturecapital #startups

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Why we invested: Gratsi Wine 🍷💸 We led the seed round of Gratsi back in November of '22. At the time, they had zero distribution and their ecommerce revenue was modest. But we were blown away and ultimately decided to partner with the team for a few key reasons: 1. Metrics and efficiency: the underlying metrics of the business were unlike anything we've seen in the space. Gratsi's ability to acquire and retain customers (online and in retail) is unrivaled. 2. Potential for premium boxed wine: we remain convinced that premium boxed wine will continue to become one of the most important categories in the wine space. The volume, margin, and customer experience implications are massive. 3. Founder vision and execution: Stephen Vlahos has been executing relentlessly against his vision since day 1. As we met and got to know Stephen in the early days, it quickly became obvious to us that he would stop at nothing in his mission to build one of the most important wine companies in the world. It's been an amazing two years for Gratsi since we invested and I'm incredibly proud of what the team has accomplished. But I'm perhaps even more excited for the years to come. This team is truly just getting started. Exciting times ahead for Gratsi and the team! cc: Top Shelf Ventures Noah Slakter Jason Sherman

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📣 Introducing Forerunner's Source of Truth on Marketplaces 📣 The marketplace business model has undeniably stood the test of time. Some of the largest public consumer tech companies are marketplaces, and with over $190B total revenue and $570B total valuation, marketplaces have produced a breadth and depth of small- and large-cap outcomes that rival software. However, the model has fallen out of favor with investors in recent years — marketplaces that went on to raise a Series A are down ~85% since the 2015 peak. We know not all marketplaces are created equal, but we believe the slow down may be detached from public market data and see marketplaces as the ideal, and perhaps only, model to deliver on certain consumer value propositions at scale. We analyzed data for 30+ public and 80+ private marketplaces to put our hypotheses and market sentiment to the test. We looked at how marketplaces stack up to each other as well as leading subscription and software public companies. What did we find? 💰 Marketplaces are rewarded in the public markets even when they are not capital efficient pre-IPO 🏆 Service and product-based companies can both be successful, though the latter is often challenged when holding inventory 🤝 Medium to high degree of management typically strikes the right balance of value creation and value capture 💫 Marketplaces with supply variety as a feature are more common and typically have more compelling financials Curious to learn more? Link to our full report in the comments. Thank you to Dan Hockenmaier, Casey Winters, and Bill Fox for trading notes with us as we created the report.

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Roblox has been Hindenburged. Cause for concern? Yes. But a slam dunk short? Not convinced. Here's my immediate thoughts on some of the points: Overinflated Metrics: 24%-42% of actual people DAU versus accounts. Roblox does disclose this, and has been asked about this as the report notes, but it does look misleading to call it "people" in other contexts IF the discrepancy is that much. Toxic (and worse) Content: This is bad. It's always horrible to see this kind of content on a platform with such young users. However it depends on how pervasive it is and how much is due to negligence from Roblox. Not clear to me they demonstrated that, but equally surprising to see how easy they could find explicit content. Never Made a Profit: This analysis seemed pretty surface level for a high growth company, I'd have liked to see more detail. Didn't look at bookings, took cash flow multiple from FactSet and just a comment on large stock based comp. Bookings growth largely tracks DAU growth so the issue would be with the absolute number. Overvalued vs Comparables: Looking at Take Two, EA, and Nintendo is overly simplistic. These are not similar businesses. Having said that, it's not an easy one to compare. https://lnkd.in/ekMiQiMA

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Interesting findings from DocSend, which looked at successful and failed Seed and Pre-Seed pitch decks. "Successful seed decks in 2023 rearranged some of the classic building blocks: instead of foregrounding problem/solution sections, they often inserted the why now? section after an opening company purpose slide. They also tended to place their product and business model sections earlier slightly earlier in the narratives than unsuccessful decks." So timing, or "why now," was judged as even more important... If you want to learn more about why now, I have a book you will like. Links to the DocSend and the book in the comments.

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When we asked CPG founders who they wanted at Founderland... Their answer was clear: People who can help them grow their business & achieve their goals. Specifically: - The top retailers - The most founder-friendly investors, and - Other founders they can learn from and share with This conversation that I'm hosting at Founderland is a perfect representation of this group, plus one BIG bonus. We're also including Joel Toledano and ChargeUp.ai which is one of my favorite tech companies that is supporting consumer brands today. They automate the retail deduction and chargeback process for brands, saving them an insane amount of time and money. Such a cool co. Excited to teach, share and connect...and get some deals done, while of course having lots of fun. Joel Toledano Jen Zeszut Kim Coffin Deb Conklin

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At Forum we look at thousands of deals each year across our Accelerator and Pre-Seed funds but only end up investing in a little over 1% of those startups.  As an early stage VC, I am in the business of saying no to nearly every startup I meet, and while there is nuanced rationale for many of the startups I pass on, a vast majority of businesses that don’t meet the qualification to get funded typically fall into one of two buckets. ▪ First time founders have a tendency to go out to market too early to raise pre-seed capital ▪   I’m sure most founders have heard some iteration of this from VCs that ultimately pass on their business.  In some cases it's a blanket excuse covering up for other pass reasons- perhaps a VC doesn’t believe in a team or isn’t bullish on the market opportunity - but in many cases founders simply haven't proven enough to the market to warrant an investment. I meet many teams with an articulate vision for the product that they want to build, but they either haven't performed enough customer discovery to prove demand for their initial wedge product, or need to raise pre-seed capital to build out an MVP.  In those cases, pre-seed investors are unwilling to underwrite those risks.  To be default fundable, teams need to be able to keep costs low, perform extensive customer discovery, and ship some version of an early product - pilots and early paid customers are key. A huge piece of this is having founding engineering talent on the team. ▪Not every startup is a venture opportunity ▪ By definition, a venture backed business is solving a problem within a market opportunity so massive and so desperately needed, that its growth rate is off the charts.   It spreads like a weed, absorbing almost unlimited amounts of capital to fulfill demand within its customer base.   Each year there are maybe 20 companies launched that ultimately have venture scale outcomes. The bar to reach this rarified air is unfathomably high and the reality is the vast majority of founders simply aren’t building for opportunities that have the potential to be one of these generational companies. Many startup founders view VC as the only viable option for capitalizing their business, but not every great business is a venture business, and most successful founders never take VC dollars.  In order to reach an IPO/acquisition large enough to generate venture returns, a startup needs a credible path to $100s of millions in revenue. This is the standard by which early stage opportunities are evaluated. The flip side to this, and I share this feedback often with founders I meet that are building interesting business in non venture markets, if you are able to scale to $10- $20M in revenue that can be a massively successful outcome for a founder.  There are investors who focus on these type outcomes, namely lower middle market PE shops, and the typical path to those deals is a bootstrapped business or a friends/family capital raise.

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AI is changing the rules of consumer engagement. Many formerly dependable tactics for building consumer tech products are changing. Operators will need to "re-learn" how build consumer tech in the world of AI. Across our consumer portfolio companies and externally, here's where I'm seeing key areas of change (curious what others are seeing): **Acquisition** - Who the gatekeepers to distribution are > new ad platforms are being created by new gatekeepers owning eyeballs and content rights, at a time when old ones are struggling with privacy changes - How you acquire customers > with gatekeepers changing, a return to marketing basics (community building) and adopting new methods: new agent driven marketing recs - How consumers search > from keyword based search, to amazon or social media search, to consultative agent search **Consideration/Trust** - How consumers gain trust > did ai write that review? Did I just speak with a human or a bot? Was that a real video? Comments were the new product reviews in era of social media shopping. How AI surfaces “reviews" is changing - How customers express needs and intent > conversational intent iterates toward true needs versus assuming the user knows what they want now **Branding** How you brand mascots > from firm-wide level mascots (Geico, Duo) with personalities to live characters with customer service capability **Retention** - How you retain initial users + break cold start / chicken & egg problem > ai agents provide more chances at user engagement  - How you measure retention > human user organically retained or retained with the aid of an ai agent? **Engagement + Customer Service** - How you measure MAU + MTU - if agents are interacting with agents to purchase goods and services, and I as a human have multiple agents buying from the same site, how do end products measure me? - How you structure CX teams > AI and automated CX tools mean customer services issues only escalated for most serious issues - How you think about fraud > ai agents that transact have KYC, identity **Monetization** - How you monetize > usage based models tied to LLM calls  - How we pay for one-time versus recurring purchases > agents will need special permissions to pay for one-off purchases while recurring subscriptions will continue to look similar (paid with card on file at that merchant) **Building Product + Content** - How you prototype and build products > coding copilots and generative design software make for rapid, low-code or no-code prototyping   - How you conduct user research > Utilizing ai voice tools to call, conduct, and synthesize research  - The role of user generated content > AI can make amazing content so human content becomes more scarce, but harder to discover (sea of noise)

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Insightful look into bioplatform strategy, and what it takes to raise a Series A from my partner, Omri Amirav-Drory: https://lnkd.in/dFv7GbF6

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💡Benchmarks in the investment industry serve as a standard for measuring the performance of securities, mutual funds, or investment managers. They provide a reference point for analyzing allocation, risk, and return of a portfolio, enabling investors to make informed decisions. Thanks Peter Walker for keeping us all informed!! Can’t wait for this!! Follow and get on the waitlist for this one! #benchmarks #fundraising #Capitalraise #founders #womenshealth #femhealth #medtech #wellness

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Earlier this year, Forerunner put out a research report on how consumer startup performance stacks up to enterprise, based on an analysis of 7,800 post series B startups. We found that consumer startups go on to perform just as well — if not better — than their enterprise counterparts: as likely to go public, as likely to fetch 10x revenue multiples at IPO, and more likely to surpass the Rule of 40. We received lots of interest in the report and the underlying data, so today, we’re outsourcing the larger body of research we did to produce the analysis so people can look through the numbers themselves. As a part of this, we’ve also clarified how Forerunner defines a consumer company: 1) companies where the consumer pays for a product (”consumer-paid”), or 2. companies where revenue relies on consumer engagement, behaviors, or spend (”consumer-driven”). In this report, we compared both of these consumer categories to enterprise for a more specific view on how each performs — and to address those who might have wondered if the Shopify and Toasts of the world skew the numbers in favor of consumer (turns out, they don’t). Check out the full report in the comments and let us know what you think:

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Thrive is a silent killer of a channel. But driving velocity can be tricky. At least until yesterday. Thrive and Instacart have teamed up to provide Thrive Carrot Ads. Now you can drive velocity with a surgeon's scalpal. Oh, and if you're approaching Thrive's Innovation Program. This is your chance to secure a permanent spot on their digital shelf. If you're interested, feel free to DM me or book a call. (No, I cannot get you 𝙞𝙣𝙩𝙤 Thrive. But I can help you stay there.) ——— 🔹 We grow brands on Amazon. 🔹 We increase velocity in Whole Foods, Walmart, Target, Walgreens, CVS, Kroger, Sam's, COSTCO, and lots of other cool retailers. #cpg #cpggrowth #retailgrowth #retailvelocity #omnichannel #retail #amazonagency #retailmedia #shoppermarketing #instacart #thrive #thrivemarket #carrotads

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