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Disclaimer: Please let me know if this is somehow meant to be satire! Apparently this is a legit new #aiproduct newly launched. The ad looks and…
Disclaimer: Please let me know if this is somehow meant to be satire! Apparently this is a legit new #aiproduct newly launched. The ad looks and…
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Paul Cohn
Great Sponsor-led secondary case study written in collaboration between my partner, Mike Blume and Derek Minno of Point Capital. Derek, a veteran in the VC/PE world, has been chronicling (on SecondaryLink) the GP-led VC and now PE sector. The case study provides a detailed perspective into a sponsor-led secondary and Tail End Capital Partners' approach to these investments. The case study documents Tail End's first investment, made in August, 2021 and also Tail End's first full exit in early 2024. Tail End has actually returned 97% of capital across our first three (of eight) investments proving out the velocity of capital in the Sponsor-led secondary market. Shout out to Sebastien Burdel for the introduction to Namakor Holdings the GP in Gelpac (the investment)! And, of course, thanks to Namakor for being great partners in this transaction! Article Link: https://lnkd.in/dUftFXdz Point Capital: https://lnkd.in/dAx_j8wP #sponsorledsecondary #gpledsecondary #secondary #secondarymarket #secondaries #independentsponsor #cv #continuationvehicle #liquidity #pe #privateequity #lmm #lowermiddlemarket #gp #generalpartner
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Colin McGrady
This FT article has a fancy graphic illustrating the layers of debt in private equity, but -- despite my prior post warning about the risks of debt layering in PE -- this article is inaccurate scaremongering. Here’s the key line: “Much of this lending is ultimately underpinned by the financial health of a fund’s portfolio companies. Yet every transaction ends up adding more leverage to heavily indebted businesses, which can make them more vulnerable in a downturn.” This statement is fundamentally incorrect. From the leverage used by General Partners or Limited Partners on their overall private equity portfolios to the use of subscription lines, secondary fund leverage, and leverage by funds purchasing GP stakes—none of these add leverage to the individual businesses or increase their susceptibility to economic downturns. The only mechanism that does add leverage to a business is a dividend recapitalization. However, the alternative is typically the PE firm selling the business to realize its investment, where the acquirer, especially if it’s another PE firm, would likely employ the same amount of leverage. Net Asset Value (NAV) loans may represent leverage on leverage from an LP’s perspective, but they do not increase the portfolio company’s debt or its bankruptcy risk during a downturn. Instead, they merely increase the possibility that the GP might need to sell sooner than desired to repay fund-level debt. Therefore, the only factor impacting a portfolio company’s failure probability is dividend recapitalization. The bank’s expertise is to assess the risk of its debt investment in the company. Whether a GP sells a stake in their management company, an LP sells a stake to a secondary fund, or the fund uses a subscription loan (a short-term loan backed by LP capital commitments to optimize investment IRR by delaying capital calls) to purchase the company—none of these scenarios affect the portfolio company’s ability to weather a downturn. “There should not be a pocket of the market that touches on so much of the economy in such a sizeable way, where we can say, ‘oh there’s leverage,’ and then very few of us can explain what that leverage means and why it might—or might not—be risky,” said Victoria Ivashina, a professor at Harvard Business School specializing in private capital. I can only assume Professor Victoria Ivashina was either unaware of the article’s specifics or, as a private markets expert, she is 'one of a few' (?) who could have alleviated the author’s concerns about this ‘web of debt.’ Moreover, where is the causality here? There is no indication (other than the title of the article) that PE firms are coercing banks into making these loans. The title could just as easily have been “How Banks Have Mired PE Shops in Potentially Depression-Inducing Debt.” Both parties willingly engage in these transactions, and as new debt products emerge, banks are as proactive in marketing them to PE firms as the firms are in seeking them out.
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Kevin Ross
Flint Capital raises a $160M through an unusual fund-raising strategy https://ift.tt/ewIzPcX Boston-based Flint Capital just closed its third fund at $160 million, four times the amount of its initial 2013 fund. The capital will be split evenly between early and late stage investments, with the firm doubling down on IT, cybersecurity, fintech and digital health startups. Its success is in large part because of a unique strategy over who its courts as limited partner investors. The firm is over a decade old, founded by partner Dmitry Smirnov, who was previously CEO of Russia-based investment firm FINAM Global. He immediately made an unorthodox decision: instead of pursuing traditional LPs like pension funds or endowments, he sought out IT entrepreneurs, believing they would want a front row seat to the next generation of technology. Sergey Gribov, one of Flint’s three partners, said the firm also has a global mandate and invests strongly in Europe and Israel — as long as the startup has its eyes on expanding into the US. “We don’t really care where physically the team is located, as long as we go off to the US market,” he said. That’s been a good strategy for Flint: the firm has backed identity verification startup Socure, last valued at $4.5 billion, adoption platform WalkMe, which was acquired by SAP for $1.5 billion, and Flo, the women’s health app recently valued at over $1 billion. For this latest fund, partner Andrew Gershfeld highlighted that several investors were actually founders that Flint backed years ago. He gave the example of Nir Giller and Omer Schneider, the founders of CyberX, a cybersecurity company that Microsoft acquired in 2020. For Gershfeld, founders like these reinvesting their profits into Flint was a sign “that we were doing something right.” Flint’s successful fundraise is a vote of confidence amongst a dire fundraising atmosphere for smaller, or younger emerging funds. This year, funding for venture firms is the lowest it’s been since 2019, and, of the few that have secured capital, established firms are taking a bigger and bigger cut of the pie, according to the Q2 2024 Pitchbook-NVCA Venture Monitor. It took the Flint partners 18 months to fundraise and, while the fund was anchored by previous investors, they felt the sluggishness of the current market. “The conversion from that first conversation into becoming a limited partner dropped during this year,” Gershfeld said. “It’s a fact – we can’t say that it is not the case.” The fundraise is particularly impressive as the partners have spent the last year helping their Israeli startups, like Cynomi and Sensi.AI, fundraise throughout the war in Gaza. Gribov, who regularly travels to Israel, recalled video-chatting with founders decked out in combat gear, or coaching companies who had portions of their workforce pulled into the military. His efforts paid off: Sensi.AI, a digital health startup, closed its $31 million Series B in late June. Gribov ...
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Christopher Anjos🎗️
"It's too risky to release a shooter in todays market, especially if it is a hero shooter" is one of the narratives I am hearing more and more of as of late. Yesterday, Valves unreleased hero shooter Deadlock peaked at over 170k concurrent players in an invite only closed Alpha. I get it, companies will always prioritize games that are games as a service (GaaS), the shareholders demand that they do. Shareholders also do not care that most GaaS games fail really hard. The chance that even one of these attempts go big and make infinite money is too appealing for them. The success of live service games hinges not only on player retention and engagement but also on the strength of their business model. Launching a player-vs-player only game without a free-to-play model and wide platform availability is a recipe for disaster. The market is flooded with polished, free PvP games that have low barriers to entry, making it difficult for paid access titles to compete. If one is adamant about launching a free-to-play PvP shooter, there is no cookie-cutter go-to-market formula. Lets take a look at what Valve did for Deadlock: 1. Valve began working on Deadlock, initially known as Neon Prime or Citadel, keeping details tightly under wraps. 2. Valve launched a closed alpha test, initially inviting friends and family members of Valve employees to participate. 3. The closed alpha gradually expanded to include hundreds of players, including competitive YouTubers and content creators. 4. All participants in the closed alpha were required to sign an NDA, preventing them from sharing details about the game. 5. A community Discord server was created for Deadlock, likely to facilitate communication among testers and with developers. 6. Valve implemented an invite system allowing current testers to invite their Steam friends to join the playtest. 7. On August 23, 2024, Valve suddenly lifted the NDA, allowing participants to stream, discuss, and create content about the game. 8. Despite lifting the NDA, Valve maintained the invite-only status of the playtest, keeping it in an early development stage. 9. Valve encouraged community engagement, with players sharing invites through various channels, including Discord servers and Reddit threads. Throughout this process, Valve has maintained a level of secrecy typical of their development style, gradually expanding access while controlling information flow. This approach enabled them to not only turn their hypothesis of a fun game into a thesis with feedback, but also to build a community as well as word of mouth. One more comment on live service games being a fruitful endeavor, provided you have the right game, business model, and distribution: The live service game Sea of Thieves was on Xbox and PC for 5 years and a half before it was released on PlayStation. It may have sold over 1 million copies in 4 months on PlayStation.
11918 Comments -
Poornima G Nayak
Gaming Founders are always curious about publishing and what they need to keep in mind before approaching the Publishers. This blog's like a handy cheat sheet, covering all the key stuff you can't afford to forget. It's a quick read that'll make sure you're up to speed on the ins and outs of publishing without missing a beat!
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Marc Patterson
The lack of exits from both private equity and venture capital funds over the last few years continues to have a significant impact on the behavior of large investors. Per the attached article from Institutional Investor, single family offices have moved more capital into fixed income and liquid equites (ie. the stock market). With yields on fixed income securities now higher, the move into that asset class is easy to understand. I would expect a larger allocation to fixed income to endure, as interest rates are likely to remain at or near their current level for the foreseeable future. However, I suspect that the move into liquid stocks is driven more by the need for near-term liquidity, rather than any structural change in asset allocation philosophy. The truth is that family offices need both access to growth companies AND liquidity. If exits in the private markets begin to uptick again, I would expect family offices to once again deploy capital to PE and VC. Private equity and venture capital continue to be the most effective method to access the return profile of growth-stage companies. That is not going to change. However, the liquidity side of the equation needs to return to normalcy. #privateequity #venturecapital #innovation #entrepreneurship #founders #startups #investing Endeavor Colorado Zeb King Tegan Stanbach Kathryn Dickson https://lnkd.in/g4rqxzhQ
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Galit Flasterstein
This article could not come at a better time for me and my fund (Danta Fund ). After attending a recent Summit where I felt the industry of #startups and #vc has become too generalist and differentation is hard to find, I now know to include Danta Fund as (per the article below) a " Non-Consensus Alpha". 💪 It sounds pretentious, yes, but the description fits sooo well. Danta Fund is a specialized #agtech fund that provides #smartmoney to our founders. We are not only writing checks: we CONNECT, we MENTOR, we BUILD. 💥 As a recent colleague from another specialized Non-Consensus Alpha emerging fund told me (Andres Baehr from SAVIA Ventures ): we, specialized emerging funds need to find a way to thrive among the sea of VCs. It's like going back to when we were thinking about what to study in uni: -what am I great at? -what do I feel passionate about? -how can I make a difference in this world. #vc #truepassion #ikigai
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Peter Martenson
With the proverbial “alignment” or “what’s your skin in the game” question during fundraising, equity contributions from buyout firms into new funds has jumped to an average of 5% from 2% last year, and in some cases as much as 20%. It’s leaving some managers scrambling to find significant amounts of capital in often short time frames. The biggest backers of buyout firms are wielding their ever-growing bargaining power to drive increasingly tough deals. The latest in a string of investor demands is this: If you want our money, put more of yours in first. As a result, some private equity executives — at both big and small firms — are loading up on more debt and pledging personal assets to appease them. This includes their homes and other valuables as well as traditional collateral such as fees and stakes in other funds. To raise cash, some are taking out high-interest loans that can charge rates into the mid-to-high teens, and are often backed by holiday homes, cars, second businesses and art collections, the people said. Some banks are demanding that executives pledge the bulk, if not all of their personal assets! #privateequity #privatecredit #privatedebt #privatecapital #pe #vc #growthequity #institutionalinvestor #limitedpartner #sponsor #alignment
61 Comment -
Chris Reilly
If you want to work in middle-market Private Equity, you need to understand this report 👇 It's called a "Quality of Earnings" or "QofE." First off, thank you to Patrick McMillan and Jon Allen of Amplēo who did an amazing job putting this together. 💡𝗪𝗵𝗮𝘁'𝘀 𝗮 𝗤𝗼𝗳𝗘? A detailed and independent analysis of a company's financial performance, often completed in the due diligence phase. 💡𝗪𝗵𝘆 𝗶𝘀 𝗶𝘁 𝗗𝗼𝗻𝗲 𝗜𝗻𝗱𝗲𝗽𝗲𝗻𝗱𝗲𝗻𝘁𝗹𝘆? During a M&A transaction, the buyer and seller are inherently at odds. The Seller wants its Adjusted EBITDA as high as possible to obtain a high valuation, whereas the Buyer wants the Adjusted EBITDA as reasonable as possible to pay a fair price. So, an independent QofE firm is often brought in to complete this analysis to help Buyer and Seller agree on the true, normalized profitability of the company. 💡𝗪𝗵𝗼 𝗣𝗮𝘆𝘀 𝗳𝗼𝗿 𝗜𝘁? It's actually quite common to see QofEs performed on both the "buy side" and the "sell side," so you may see two reports as part of the transaction. While it may seem like this would put things further at odds, it actually serves as a nice portfolio of support for arriving at a normalized profitability figure, with each side getting to weigh in through an independent voice. 💡𝗠𝘆 𝗙𝗮𝘃𝗼𝗿𝗶𝘁𝗲 𝗣𝗮𝗴𝗲𝘀: - p. 13-15, Building Adjusted EBITDA Love it or hate it, the Adjusted EBITDA analysis is designed to portray a picture of normalized profitability on which to base a valuation. - p. 30, Proof of Cash Helps provide insight into whether reported Revenues are consistent wish cash receipts. - p. 34-35, Working Capital Helps see Working Capital trends over time and provide a starting point for the "Working Capital Target" 💡𝗛𝗼𝘄 𝗶𝘁 𝗔𝗳𝗳𝗲𝗰𝘁𝘀 𝗧𝗵𝗲 𝗠𝗼𝗱𝗲𝗹 If you're a Financial Modeler, these schedules should appear in your model exactly as you see them here. The QofE becomes the "source of truth" during diligence and your financial model should match it exactly. 💡𝗭𝗼𝗼𝗺𝗶𝗻𝗴 𝗢𝘂𝘁 A document like this is a treasure trove of financial information and helps you see behind-the-curtain when it comes to assessing the financial health of a "Target Company" during an acquisition. Together, you and your team will decide if the information presented helps you move forward with closing the transaction. ~~~ 👋 Hey, I'm Chris Reilly, and I teach Financial Modeling based on real Private Equity and FP&A experience. 𝘱.𝘴. please ♻️ share this post with your network if you found it helpful, thanks!
12410 Comments -
Kiva Dickinson
I used to think LPs only invested in emerging VC / PE firms for better returns. That’s true…sort of They obviously first and foremost want high returns, but in building our firm and studying the industry I’ve learned that LP motivations are more nuanced than that To understand why an LP really might invest in us, I start with the assumption that they could invest that $ in Blackstone (or a similar large PE firm with top quartile track record) What could we offer that is incremental, and how should we position ourselves in that way? 1. Smaller funds can be higher upside — LPs may be looking for higher risk / higher return opportunities, so we have to emphasize the path to outlier returns. This means discussing not only their expected value but also the distribution of outcomes, and how that might differ from the rest of their portfolio 2. Harder to partner with successful firms later — LPs are often looking to build long-term partnerships with firms that will be around for many fund cycles, and that is about more than just returns. It’s important to emphasize not just the strategy of this fund but also the vision of the firm we’re building 3. Co-invest opportunities — Some LPs don’t care about co-invest, others only invest in funds for co-invest. When speaking with the latter, we emphasize that we have a disciplined and repeatable process to generate and share co-invest opportunities (easy to say, harder to execute) 4. Learning and thought partnership — We have LPs that invested in us because they have conviction in or personal passion for health & wellness and want to learn more about the ecosystem. For these folks we might talk through investment opportunities they see that are in our industry, or invite them to industry events. We also spend a ton of time writing quarterly letters to help them track the industry and learn from our companies It takes years to know where our returns will ultimately shake out, and we’ll have no reason or permission to exist if they aren’t good In the meantime it’s crucial to recognize and deliver on these other needs of our LPs, to provide the experience that they signed up for
946 Comments -
Maude Delice
Is Now the Best Time to Raise a Private Equity Fund? According to industry leaders, it just might be. "I’m much more optimistic at this point in the cycle in 2024 than I was in 2023 and 2022," says Andy Lund, global co-head of Houlihan Lokey's Private Funds Group. Despite expectations of a slowdown, the first half of 2024 has been unexpectedly successful for PE managers raising capital. U.S.-based funds closed on $155 billion by the end of June, slightly ahead of the first half of 2023 (PitchBook Q2 2024 US PE Breakdown). Alex Russ, head of North America for Evercore's Private Funds Group, sees this as an ideal moment for GPs with open funds. "We saw fewer new fundraise launches in 2024 than in 2022 and 2023, leading to a slight easing, which we expect to continue into the second half of this year," he notes. However, challenges remain. LP capital is still largely locked until M&A and exit activities resume. Evercore anticipates flat PE fundraising figures for 2024 compared to 2023. Moreover, other asset classes are vying for already limited institutional capital, with private credit showing particularly strong growth. In this context, Maria Konnikova’s "The Biggest Bluff" offers an insightful analogy. Inspired by "Theory of Games and Economic Behavior" by John von Neumann and Oskar Morgenstern, the book explores von Neumann's belief that poker epitomizes the delicate balance between skill and chance that governs life. Doing well at poker isn’t just about playing well; it’s about playing well relative to everyone else. And even with the best strategies, luck plays a critical role. As Nobel-winning economist Daniel Kahneman notes, "The successful funds in any given year are mostly lucky; they have a good roll of the dice. There is general agreement among researchers that nearly all stock pickers, whether they know it or not—and few of them do—are playing a game of chance." The last two years were like drawing a bad hand in poker for those raising funds. The book also emphasizes the importance of thinking like a Strategist—something I’ve honed throughout my career. Each move requires reassessment based on new information. You need a plan that evolves with feedback and supports long-term, good decision-making. If you’ve lost your chips, was it due to an unlucky situation—or because your strategy was flawed? A recurring mantra of Poker Hall of Famer Erik Seidel is "less certainty, more inquiry." If that becomes your guiding principle, not only will you actively listen, but you will also adapt and grow. For GPs, strengthening relationships with existing LPs is more crucial than ever. Now is the time to leverage your learnings and craft compelling narratives that showcase your commitment to value creation and strategic growth. By highlighting your firm's ability to navigate complex market dynamics, you can strengthen LP alignment and foster the partnerships needed for long-term success.
594 Comments -
Daniel Fetner
Here’s a question investors are often asked: When evaluating early stage companies, how much time do you spend on due diligence around future exits? It’s not surprising we hear this question a lot. Also not surprising: it’s got a wide range of answers depending on the firm. Some don’t spend much time here at all. Others make it a point to put meaningful time in as part of their process. Our current thinking: take the time to do the work on public market comps. At Alpaca VC, we spend significant time understanding how public market investors will realistically value a business based on margin profile, product, business model & TAM. In short, we want to know: how will this company be valued at scale when we get taken out? Yes, we can acknowledge that the journey toward exit is a windy road and that there may be pivots along the way, but there are still public market companies that have a business model similar to the early stage company you're evaluating. And you can always look at gross profit multiples if you think the margin profile will change over time. So we still do the work on the comps. Quantitative metrics we look at when making the comparison to public market comps include EBITDA multiple, revenue multiple, Gross Profit multiple or all of the above. As part of this process, it’s also important to factor in the public market company’s year-over-year revenue growth as this will also significantly impact the multiple it trades at. Simple example: if you have two public market companies with similar business models and similar margin profiles, but one's growing 100% year over year, and one's growing 50% year over year, then obviously the DCF (discounted cash flow) analysis is going to spit out a very different valuation for the one that's growing faster. Why this matters: When you take all of that information into account as you evaluate an early stage business, you can begin to create a realistic picture of how this company will be valued in the public markets at exit - or how an acquirer will value the company for an acquisition. Strategic acquirers may, of course, pay a premium, but we won’t underwrite for that. This allows us, for example, to form conviction around valuation based on revenue and gross profit predictions. If we think they can do $100M of revenue five years from now, we use this diligence process to form a thesis about whether the characteristics above (product, margin, business model, etc.) will cause the company to be valued at $200M vs. $500M vs. $1B at exit. Curious how other early stage investors think about underwriting an exit and how much time they’re spending on public market comps even though these companies are in their infancy.
393 Comments -
Atul Tiwary
Great analysis by the AGC team on SaaS public company comps. It's worth a look as we recalibrate mid-way through earnings season. The analysis aligns with the broader Nasdaq equity performance, where the Mag 7 (or fab 4 now :-)) have shown more resilience than the rest of the market. #AGC #SaaS #EarningsSeason #Nasdaq #EquityPerformance
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Christopher Anjos🎗️
‘Fallout’ is the first show from Amazon Prime to Score No. 1 on Nielsen streaming ratings 3 weeks in a row. In its third week on Prime Video since its April 10 release, "Fallout" accumulated 1.53 billion viewing minutes across its eight episodes. The video game adaptation saw 2.9 billion minutes viewed in its first five days and 2.62 billion minutes viewed the following week, from April 15 to 21. "Fallout" was one of only three titles this week to surpass 1 billion minutes viewed. It was followed by "Bluey," which ranked second with 1.34 billion minutes on Disney+, and "Grey's Anatomy," in third place with 1.181 billion minutes viewed on Netflix and Hulu.
233 Comments -
Hemant Elhence
ARR abuse, while obfuscating true GAAP revenue is a real issue. In VC pitch decks, I am noticing an increasing confusion in how the founders share the Annualized Recurring Revenue (ARR), Booked Revenue, and the GAAP Revenue. This recent WSJ article on this topic, as applied to #Crowdstrike, makes this point very well. Thanks Jonathan Weil Krishna Kunapuli, Dr. Pallab Chatterjee Rajiv Roy Sumanth Channabasappa #crowdstrike #accounting #saas #ARR #GAAP #Revenues
392 Comments -
Colin McGrady
Is A Crisis Looming in Private Equity: What Happens When the Economy Turns? This Bloomberg article portrays the private equity (PE) industry as teetering on the brink, grappling with few exit opportunities, but buries the lead in my opinion. While it understandably highlights the debt layering PE funds are engaging in -- fund-level NAV loans, company-level PIK loans, and floating debt loans -- much of the article is dedicated to worry that regulators aren't getting the full picture. Meanwhile, it glosses over some really disturbing quotes. First of all, there is a throw-away line that multiples for companies with junk debt have been cut in half. Well, if that's the case, I can tell the regulators what the equity value is for free. This should be the article; broadly speaking, how much have multiples come in, and if you run that through the average debt ratio of private equity overall each vintage year, what does that look like for equity? How much 'operational improvement' does the sponsor need to deliver to get back to even? Then there's a calming quote from Mattis Poetter, "PE firms have gone through very tough environments...they're quite good at managing difficult periods." I agree, firms with capital have weathered past economic downturns well. But the economy is allegedly strong. What if, in this weakened state, a PE industry with layered leverage faces an actual economic downturn? I don't need to fire up Excel to conclude leverage on leverage on assets purchased at peak valuations is problematic in a downturn. Key Questions to Consider: • How will PE firms manage the mountain of distressed debt if economic conditions worsen? • What are the potential systemic risks to a PE collapse? (I'm thinking of pensions here) • Can the PE industry return to its 'roots' of operational improvement to navigate this crisis? (And let's be honest, we could have a whole discussion around if those really are the roots) #PrivateEquity #EconomicDownturn #InvestmentRisk #MarketAnalysis #FinancialCrisis #OperationalExcellence
61 Comment -
Alex Pattis
Want to be a Venture Capital Scout? Scout for Syndicate leads. I’m biased, but I think SPV/Syndicate leads are some of the best connections for VC scouts. As a syndicate lead, I’ve leaned into working with VC scouts the past 3-4 years. It's been a great way to gain unique access to deal flow and many of my most exciting portfolio companies have come from various “scouts”. Given the deal by deal investing strategy and ability to share carry with those who support sourcing & diligence, it’s become increasingly common for syndicate leads to actively partner with scouts and share carry or upside in the SPV. What’s in it for the scout? Deal x deal carry. While there are multiple traditional VC scout models that exist, the syndicate scout model is pretty straightforward. If you source a deal and support diligence, the syndicate lead is going to share some of the carry with the scout, and likely a more meaningful amount than a traditional venture fund. This is of course an SPV, so you are getting carry for the specific deal you sourced and not fund-level carry. A little more background on why the SPV model aligns with VC scout deal sourcing… Syndicate leads are structured (and many times set up) to invest in more companies than a traditional venture fund. In order to consistently bring LPs high quality deals, it makes sense to partner with folks in your network who have strong deal flow. Most times the carry split from syndicates will be more generous than that of a traditional venture fund. Syndicates do not necessarily have a certain number of portfolio companies they can invest in, meaning as long as they are getting access to quality deals that LPs want to participate in, then they will: 1) Be more likely to say yes and run the SPV into that investment and 2) Be more willing to provide a higher carry split, especially if you as a scout show you can repeat this with more future access In summary, if you are going to scout for venture funds, you might as well explore doing so with syndicates and capitalize on deal by deal carry/upside. Disclaimer: If you are scouting deals because you want to get into VC, working with traditional VCs is likely better from a networking standpoint, but if you are scouting to capitalize on carried interest/upside, I think the SPV lead route can be more attractive, and more frequently. -- Interested to see if you are a fit for our new Deal Sheet accredited investor product? Explore Deal Sheet to access 100-200+ of the best SPV startup (pre-seed to pre-IPO) investment opportunities per year. Deals are curated by Zachary Ginsburg & Alex Pattis (deployed > $200M across 750+ SPVs) across 50+ syndicate leads.
695 Comments -
Chris Erwin
The Triller / AGBA merger is financial engineering, not logical combination. Retail investors, be wary… …if this deal goes through as planned. I reviewed the investor pitch, sec filings, fundraising history, and financials of each. The findings show major 🚩🚩🚩🚩 Which explains why shareholder protection investigations were kicked off today. I’ll write more about the deal on LinkedIn and my newsletter this week. —- I’m the founder of RockWater Industries. We do m&a and strategy advisory for #media #agency #creatoreconomy My DM’s are open
95 Comments -
Zorian Rotenberg
PE - Pattern Recognition in Investment Decisions Over the past 3+ years I've been thinking a ton about "pattern recognition" in PE and how to create more value through applying pattern recognition correctly while avoiding pitfalls. This research by Michael J. Mauboussin explores the power and pitfalls of pattern recognition in investment decisions. Pattern recognition combines intuition and expertise, where intuition is the unconscious recognition of patterns, and expertise is the result of deliberate practice and feedback in a specific domain. Pattern recognition can fail in more complex and uncertain environments due to incorrect assumptions, overconfidence, and biases - in PE, it's important to take this into consideration and apply the below insights including using data while avoiding biases. Key Takeaways: - Pattern recognition is useful when environments are stable, feedback is timely, and cause-and-effect relationships are clear - Expertise vs. experience: Expertise comes with predictive models based on feedback, while experience without feedback often leads to overconfidence and errors - Heuristics and biases: Investors often rely on mental shortcuts, leading to misjudgment in dynamic or uncertain markets - Base rates: Use of historical data (base rates) can improve decision-making in pattern recognition, especially in domains like corporate sales growth and M&A success - Failure of pattern recognition: It often fails in complex adaptive systems like stock markets due to non-linearity and the difficulty in finding causal relationships - Improvement strategies: Investors can enhance their pattern recognition skills by focusing on stable environments, using the outside view, and documenting intuitions for self-assessment #pe #privateequity
141 Comment
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