Gregg Kaplan

Very smart fellows solving a significant issue with an elegant solution.

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How to value a seed stage company? Who knows...(Well, Jack McQuire does but I had to fill in for him at the last minute for last week's Valuation Masterclass.) Here's a slide I prepared highlighting some of the recent seed rounds we have led and supported. Two surefire valuation methods: comparables (i.e. numerous rational references to companies similar to you) and the market (i.e. pitch as many investors as you can and see where they land). I have seen valuations double simply as a result of well-managed competitive processes. Governance, Terms, and War Stories sessions coming up. Register here: https://lnkd.in/ghJJpdR4

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Having a Cars and Capital event tomorrow in Southern California with Oren Klaff. If you want to join message me. https://lnkd.in/gDQ4D39u Oren Klaff Bridger Pennington #InvestorEvent #FamilyOffice #InvestmentOpportunity #CarlsbadEvent #PrivateEquity #WealthManagement #InvestmentConference #CapitalRaising #NetworkingEvent #IndustryLeaders #FinancialGrowth #InvestorsMeetup #WealthBuilding #BusinessGrowth #InvestmentForum

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An interesting article below, that demonstrates out how San Diego is punching above its weight.  And how Connect's strategy and execution over time, contintues to be central to that success. The article describes the current state of the market in Seattle.  (And i love Seattle.) It's a market that we tend to track with relative to venture fundings.  They used to kick our butts, we outraised them each of the last three years.  This despite the fact they have 3x as many funds there, and 9x the amount of resident capital there. (per pitchbook) Some key takeaways:  * They continue to compare themselves to SIlicon Valley. Instead, we leverage our proximity. *They whine there's not enough local investors (see note above - they have more than us). We bring over 200 VCs to SD annually! * They say founders are not connected with one another. We bring CEOs together regularly, in a variety of ways - private dinners and through our Springboard program. * They say they need to elevate their image on a national & international stage. Why we created and continue to build Five.Ten.Thirty (aka Inno Day).  * And the last paragraph - they need to concentrate on making their region a great place to live. Our mantra: "It's about Better, not Bigger." (See XEO, TL Fund). THANK YOU FOR ALL OF YOUR SUPPORT. WE ARE ON A MISSION TOGETHER!!!  (Comments, whining, suggestions on SD always welcome.) https://lnkd.in/g6Rq_f2Y

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I've sat on both sides of the M&A table dozens of times. Having a differentiated product with a defensible moat in a healthy market is critically important. Full stop. However, don't under-estimate the importance of demonstrating to the buyer that you have a deep, genuine understanding of your business. For example... Be able to clearly articulate why strategic decisions were made in the past. (What was your rationale? What adjustments did you make and why? What did you learn?) Be able to logically and reasonably describe how and why gross margins, growth rates, profitability, retention rates, etc. will improve over time. Know the language of your buyer...e.g. if you're a SaaS business seeking an investment from Private Equity, you must know what they mean by bookings, net revenue retention, gross margins, CAC, payback, cash EBITDA, etc. Further, when asked about these things, your ability to answer immediately with confidence and specificity ("$24.2M" is a MUCH better answer than "I think it's about $24 or $25M...but I can confirm with our investment banker"). This instills a level of comfort with the buyer, which generates real value in how excited they will get about the investment / acquisition and maybe even the price they're willing to pay. It may feel superficial, but someone that is going to write a check for tens or hundreds of millions of dollars wants to feel confident that you and your team are locked in on the economic engine of your business and can speak to it in black-and-white metrics. Obviously, I can't scientifically put a number or percentage to what this is worth, but I can tell you that I've been in the room with the people writing the big checks and have been engaged in the deal team debates on whether or not to buy and at what price. A seller that knows the "secret sauce" of their business, the levers that can be pulled, and the data that tells the objective story greatly increases the likelihood of a fast and high-value outcome. ************ P.S. Even if you don't plan to sell or take on a majority investment, run your business like you are. Your leadership team's ability to speak a common, data-driven language will allow you to make better decisions faster.

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Over the years I’ve seen the post going around in various forms of how Bessemer Venture Partners keeps a *robust* anti-portfolio on their website. It’s fun, self-aware, humbling, and differentiating. If you haven’t already, go have a look. (As an aside, I’ve been to their offices in Cambridge multiple times back in the day while visiting Kent Bennett, the venerable Felda Hardymon, my dear friend Steve Papa (if Steve was capable of “friendship”), and the young(er) founders of a company called Toast - Bessemer wallpapered their bathrooms with the rejection IRMs of said anti-portfolio). Anyone who has been in the game long enough probably has their own version. Companies they could have invested in, but passed on, only to be made a fool when said company later becomes a decacorn. My personal opinion - and I tend to think one that Bessemer shares - is 1) we all make mistakes, 2) we’re human and at times quite dumb, and 3) hell, at least we had access in the first place. Venture investing is about seeing as many amazing opportunities as you can, even if sometimes that means missing a few…dozen. Either that or I’m totally full of shit and we’re just plain idiots. What do I know. I’ve only been doing this for three years. ¯\_(ツ)_/¯ In any case, in the spirit of giving myself a Father’s Day gift of crow, which I plan to eat, here are some of mine: Toast: not sure if Steve P would have let me into his $4M or whatever it was round never mind the Seed or the A, but I feel like I could have convinced them. Steve F and Aman said they were going to fully rebuild a POS after running into integration nightmares with Micros, Aloha, et al, and I thought they were crazy. Old industry incumbents. Entrenched. Insert foot in mouth, and then pull it out and use it to kick my own ass. Klaviyo: TJ Mahoney was a pre-seed investor and he told me about it. Said AB was a stud. I passed without even talking to them. $8M valuation or around there I think. Shopify ecosystem play? Ew. Sigh. I’m a dumbass. Pillpack: mentored TJ a bit early when he was having some team stuff going on at Techstars. The hippie. $4M post or something. Said no. Whoops. Drizly: Nick Rellas kept stonewalling me, the little twerp, but pretty sure I had a small spot. Pat Kinsel would have got me in. Slept on it. Round closed. I’m an idiot. Draftkings: met Jason at a dinner and Ryan Moore told me to hop in at pre-seed - I already had a small play with a competitor. Jason and I became great friends (which we are to this day). Really knocked that one out of the park. Way to go, Phil! Good eye! Anyway, PLENTY more where that came from and I’m sure I’m currently in the process of creating one of the world’s most epic anti-portfolios at Impellent Ventures. But, again, c’est la vie. Better than sitting on the sidelines and wondering what could have been. At least I know what could have been - a gazillion more dollars than I have right now. Ah well. Batter up! *p.s. I’ve had some winners, too ;)

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Most founders don't think about how to get acquired at the beginning, but they should. As the Founder and Managing General Partner at Watertower Ventures, I've helped over 250 companies navigate M&A and create differentiated approaches to capital formation and fundraising. I'm getting a lot of DMs from talented founders seeking guidance on how to successfully fundraise from VCs and navigate M&A. So, I've opened up 5 exclusive 1:1 mentorship slots on Intro. What can we cover together? ✔️How to successfully fundraise from VCs ✔️Mergers & Acquisitions ✔️Which VC firms make sense for you ✔️How to SELL your company Honored to be on Intro alongside world-class experts like Alana C. Matthews (former EVP of Business Ops for the Dallas Stars), Kathryn Minshew (founder of The Muse, raised $50M+, 70M annual users, LinkedIn Top Voice), Debbie Millin (founding COO at G-P ($4.2B valuation)), & Dianna Cohen (founder @ Crown Affair, backed by Gwyneth Paltrow). Comment “interested” and secure your spot now: intro.co/dereknorton

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Tough to bring out the best in PE portfolio companies without bringing out the best in their leaders, eh? Most PE folks will nod in agreement. But tell me: What are you doing to equip, empower, and develop port-co leaders? And is it enough to give your firm an edge in this hyper-competitive PE market? If the answer is anything short of an emphatic "yes," check out the leadership accelerator we're working on. Details in the comments ⤵️

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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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"Does having a strategic matter? No. Of the 201 publicly traded tech companies we’ve monitored, only 33 of them had a strategic investor." This is a hard opinion but backed up by facts! #blossomstreetventures #venturecapital #strategicinvestors #financialinvestors #investmentstrategies

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Well said, Olivia O'Sullivan. 💡People who know me know that I am passionate about ecosystem platforms. Executed well, it is a superpower applicable to many use cases. This is another. Sharing with the startups in my network. Choose partners to accelerate your journey wisely. 🚀 #platforms #acceleration

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The #1 Factor to Determine Max Valuation in Micro SaaS...is debt financing. Here's why, plus a free valuation calculator... Most buyers in the $500,000 to $2 million valuation range use SBA loans, which come with specific requirements. The SBA requires a Debt Service Coverage Ratio (DSCR) of 1.25, meaning the company needs $1.25 of income for every $1 of debt payments. In simpler terms, the key question is: Can the business afford itself? Does the Micro SaaS firm generate enough income to cover the loan needed to buy the business? As the valuation rises, so do the loan and debt payments. At some point, the valuation requires a loan that breaks the DSCR requirements. The upper limit of a Micro SaaS valuation is ultimately determined by the maximum loan a buyer can secure based on the company's income. Here's a simple calculator to illustrate this concept, helping us all determine valuation more accurately based on the real world 👇 #microsaas #acquisitionentrepreneur #saasgrowth

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California's economic strength has many roots, but one key factor is its stance against non-compete agreements. With very few exceptions, it has been unlawful for employers to enforce non-competes in California since 1872. Last week, the FTC banned non-competes nationally. While a lot of business leaders are freaking out, I'd like to welcome you all to the party -- even if you did get dragged here against your will and show up 152 years later. From a moral standpoint, banning non-competes nationally is obviously the right thing to do. Employees have families and financial needs. Limiting their career mobility through non-competes is rapacious corporate behavior. It's time to move away from a system that mimics indentured servitude and embrace one that empowers workers. But it's not just about fairness. There's a strong economic argument, too. Non-compete agreements stifle innovation and economic throughput, particularly in the knowledge economy. A free flow of talent fosters a more dynamic and productive market for all participants. But look, I get why so many business leaders are panicked. It's painful to invest time and energy in training an employee only to see them poached by a competitor. There is no way around that – but the solution is not to use your asymmetrical power as employer to force your employees to continue working for you or else go hungry. The solution is to create a compelling work environment -- one with strong compensation and intellectual nourishment and professional development for all your employees. It's not neuroscience. When employees feel like they're getting a great deal where they're at, they'll stay. And the ones who leave for a few extra nickels weren't long-term contributors who were going to move the needle for your business in any case. Learn. Do better. And always remember that the free market can only truly work when it flows in all directions. Ending non-compete agreements is a step towards a more vibrant and equitable economy for all. #management #talentacquisition #entrepreneurship

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Got a fundraising sea story for you . . . I've known Andrew Bialecki and Ed Hallen, Klaviyo co-founders, for >10 years. They personally helped me back when Klaviyo had ~10 employees. I was running marketing at a turnaround in Boston (Karmaloop--it had gone bankrupt). Klaviyo was a few doors down on Boylston street. Or Newbury. I can't quite remember. Our turnaround marketing team was FRUSTRATED. Karmaloop's email program was on some legacy platform (I won't mention it. . . we shouldn't speak ill of the dead). We couldn't do any of the lifecycle marketing we wanted to do . . . . . . and lifecycle marketing was critical to our turnaround thesis. It was the only way we were going to make it work. So after a particularly frustrating time trying to get a triggered email send to work, I threw up my hands, announced "I'm going next door," walked over to Klaviyo, and knocked on the door. Ed answered. Andrew waved--he was coding. "Hey, can your team help me migrate this beast onto your platform and make it sing? Like, this week?" Andrew and Ed bent over backwards for me and helped me get Karmaloop's 5M emails migrated and humming. It's not a stretch to say the turnaround (and the next ones) could only happen because of Klaviyo. I've stayed in touch with them ever since. They've given Michael Epstein and me advice over the years, been in our corner, and been a part of PostPilot journey. (PostPilot's original thesis was simple: "Klaviyo for direct mail." Now, it feels like the story's come full circle, because Andrew and Ed just invested in PostPilot's Series A. Like so many other things in my career, it all started with a turnaround. 

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At an LP’s annual meeting: ~100 quality VC and growth equity firms gave brief overviews. <5 said they invest in consumer. The consumer is the engine of the economy and 2/3 of GDP but is a bad word. Watch - we’ll look back and this will be a great time to invest in consumer.

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When you are raising capital, are you focused on your immediate needs or long-term business goals? Whether it's bootstrapping, crowdfunding, or courting investors, each option shapes your company's trajectory. Consider Native Deodorant's story which launched with minimal outside funding, and sold for $100 million within 2.5 years. And the crazy part is the founder retained over 90% ownership! On the flip side, Juicero raised $120 million only to collapse when customers bypassed their high-tech juicer for a simpler, no-tech approach. Before chasing capital: 1. Reflect on why you need funding. 2. Determine how much you need. 3. Decide how much control you're willing to share. Remember, your investors should offer more than just money. Get strategic investors who broaden your network, offer mentorship, and add other value to your business. Seeking the perfect funding match is an essential strategic decision. How did you choose the right financial path for your startup? For more tips on #entrepreneurship and #investing, follow me, Ashesh Shah.

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I’m excited to publicly share something that has been in the works for a few months at the 9point8 Collective. We’ve launched our Virtual Studio! This is a program for early-stage companies that provides the coaching, development and venture-building tools they need to find traction and scale. The program is modeled off of the venture-building processes found inside #VentureStudios, which have delivered 2X IRR and exit 45% faster than traditional #VC-backed #startups over the last 10 years. Some of the secret sauce to this is that studios have found a way to validate strategies early on, de-risk execution, preserve and extend limited runway, and create efficient business models very fast. We at 9point8 are seasoned studio builders and are on a mission to bring this value to founding teams as they navigate their startup journeys. What we’ve done with the Virtual Studio is distill these key processes and techniques, add in our own expertise and best practices, and package them into a program which meets start-ups where they are. We are now opening up our Summer 2024 Cohort, slated to begin in July. Space is limited, so I’m sharing the opportunity with my network before we fill the cohort. Here are the details: -It’s a 3-month program which takes the founder through the key phases of venture-building and de-risking (refining target market, product-market fit, economics and financials, planning, and fundraising). -Founders can expect to achieve greater focus, improved operations and increased marketability to customers and investors. -The end results include collaboratively-drafted operational plans, commercial / investment pitch decks, and elevated management practices within the founding team. These draft off frameworks from 9point8's proprietary venture-building process: Targets Over Everything. -It’s built for founders facing (or approaching) a critical inflection point, where fresh perspectives and strategic management levers are critical. These might include fundraising preparation, new product launch, market expansion, and post-MVP scaling efforts. Why did we build this program? Because building a new company is really hard. 90(!) percent of startups fail, and even moderate risk reduction can create a huge lift to survival rate and eventual returns. The studio model is proven to drive greater venture success; our virtual program is extending that success to more and more teams. The program is highly collaborative and hands-on, so we only take on a few companies at a time. This is a great opportunity for founders who are looking to level-up their abilities when it comes to unlocking traction, growth, and an express lane to superior returns. If interested, please reach out immediately as we expect the program to be fully enrolled very soon! Blair Merlino Evan Allen Neal Ghosh

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What do you do as a founder, when you're no longer VC-backable, but are too small for private equity? Join us on May 23rd for a fireside talk with Andrew Chang, where we will explore the venturePE financing model, the gap in the funding markets that we address and how back companies that need that extra push and operating muscle. Lauren Bonner Jonathan Jetmundsen MBM Capital #fundraising #venturePE

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I'm excited to reshare this timeless episode of #Supermanagers featuring David O. Sacks, a member of the PayPal Mafia, founder of Yammer, Inc., and General Partner at Craft Ventures. David offers invaluable advice for CEOs, managers, founders, and anyone looking to elevate their organization. In this episode, David dives into:  - Introverted leadership - Managing hyper-growth - Knowing when to throw out processes  - And so much more. Don't miss out on his unique perspective and leadership journey. Tune in to learn from one of the best in the business! 🎧 Link in comments 👇

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