Monk's Hill Ventures’ Post

Doubling down whilst cutting back - the story of tech today. What we're seeing at the moment is a tremendous amount of focus in the venture ecosystem. The problem with 'unlimited' and 'cheap' capital is that it has the impact of making both the balance sheet as well as the company lazy. What do I mean by that? I mean that when you have a lot of cash sat on the balance sheet, it allows you to take a pretty lax view to dealing with problems. You can just throw money at a problem to fix it, rather than figuring out what went wrong. On the other hand, if every dollar you have has been hard won and - critically - is scarce, then you are forced into building and solving from first principles. i.e. you HAVE to get it right as you don't have the luxury of spare cash to resolve your problems. And what this also means is that you stop chasing unprofitable revenue streams. These may be high volume, but hard to acquire with low LTV and long payback periods - unit economics you wouldn't touch with a ten foot barge pole ordinarily. But when you have cash on the balance sheet, you can trick yourself into saying 'I can AFFORD to try this out'. Wrong. You couldn't afford to, you just had enough cash that you could mask the outcomes. One such business that has been reborn into the faith of profitable growth is Airtable, one of the original 'spreadsheet killers'. Now, I don't believe that anything will kill the spreadsheet, at least for a while, but I have to say, you can bend Airtable into doing some pretty awesome stuff. I use if for my CRM, my talent pipeline, my deal flow tracker and my reading list to name a few uses. But they recently announced that they will be slashing >25% of their staff and will be doubling down on chunkier, more lucrative enterprise deals, thus moving away from trying to serve the large SME market (including startups and people like me). This is inevitable and something I figured out very quickly with Projected. Small businesses just don't have the cash to make it worth your while. In today's Lowdown, I have a look at some of the story around Airtable, platforms taking a stand against Brand (Russell, not brands in general), whether the IPO market is back and I take a look at where all the millionaires are going. I'll drop a link in the comments. Have you had to navigate moving from an abundance to a scarcity of cash? How did you deal with it? #tech #startups #venturecapital #finance

Collin Wallace is someone that you need to follow if you are a startup founder. He’s smart, kind, strategic and thoughtful and about sharing investment advice and data for startup founders. Please follow him for more insights Lobby Capital ! #iim #iit #startup #stanford #startx #ucberkeley #berkeleyskydeck #falconx #techstars #500global #plugandplay #pearvc #ycombinator #foundersinstitute #startups #venturecapital #privateequity #entrepreneurship

There may be 'start-up trouble' ahead, but while there's 'moon' light and music and love and romance... Let's face the music and dance! PART 2/2 Low rates and successful exits fuelled a VC investment boom from 2011 to 2021. However, untested business models failed as interest rates increased, impacting startups in a big way. Investors took risks on unproven models, expecting perpetual growth. As these startups failed, $27.2 billion in VC funding was lost in 2023. Some startups sold for much less than invested, like Hopin, once valued at $7.6 billion. AI hype covered losses, with Meta gaining despite $46.5 billion losses in the metaverse. Job losses hit over a quarter-million tech workers, but the overall job market remained strong. VCs encouraged founders to exit struggling businesses. Startup shutdowns made it harder for new ideas to get funding, with a 38% drop in active investors. Corporate bankruptcies rose, indicating challenges beyond startups. The rise of "zombie" firms, supported by low rates, led to delayed creative destruction. Policies supporting zombie firms may harm healthy businesses and hinder long-term growth. While seeing firms go out of business isn't ideal, it allows capital to flow to viable businesses. The startup landscape is changing, with lessons learned from failures before... But I think that's the boring part of the story. Let's switch gears here for a moment and talk about what we are passionate about and actually what this 'changing landscape' can mean for investors. Of course, Web3 plays a massive part with regards to the technology component and here are just a few examples as over $600M has been raised by web3 companies in 2024 so far. > HashKey Group: $100 Million > Flowdesk: $50 Million > Sygnum Bank: $40 Million > PORTAL: $34 Million > Oobit: $25 Million > Canaan Inc: $25 Million > Magic Square: $24 Million > Polymer Labs: $23 Million > Ingonyama: $21 Million > Tune FM: $20 Million > Axiom: $20 Million > CryptoSafe Group Ltd: $20 Million > Kiln: $17 Million > Finoa: $15 Million Bottom line there is opportunity everywhere and in Web3 we are off to a great start, in the words of LL Cool J 'Don't call it a comeback, I been here for years' so keep the faith, stay in the game, don't f**k it up and think long term and remember before the fiddlers have fled, before they ask us to pay the bill and while we still have the chance... Let's face the music and dance! It's going to be a great year! #venturecapital #startups #fundraising #investing #entrepreneurship

Fun discussion this week about the state of startups and tech investing, hosted by TiE Seattle and featuring Kellan Carter, Marius Ciocirlan, Joseph Horsman, Carly Kiser, and Julie Sandler. Some takeaways: 🤖 The panelists poked fun at all the hype around AI — “we do like the category that must not be named,” Carter joked — but they clearly see potential. 🔑 Tech layoffs could be a boon for startups. “So much talent — at least in the Pacific Northwest — is locked up in corporate companies,” Ciocirlan said. “And I see this as a huge opportunity.” 💰 The successful companies to come out of this era will need to rely on actual revenue for growth, versus just investor cash. “We’re seeing different businesses get built,” Horsman said. “This is a return to normalcy.” 🎬 Investors want to see "founder-vision fit" in startup pitches. “You got to have a sense that this person is the inevitable human being who’s going to do something that has never been done before,” Sandler said.

No need to be GLOOMY ! A lot of people are gloomy at the moment. Don’t be. A crazy mental golden era of business is on the way … that will be more mental than the last crazy mental period of business. We’ll look back on this period in a few years time as an incubation period for some amazing companies. companies that we will look at with the same awe that we view apple, amazon and google etc. Why? 🤔 Because around 900 technology companies around the world have laid off over 220,000 people this year alone. (economist) 😱 And thats a very very good thing. Mark zuckerberg referred to this year as the year of efficiency - a bit shitty I guess for the people with their P45’s but someone has got to say it. Globally, venture-capital investment in the first half of this year was $144bn, less than half of the $293bn raised by startups in the same period in 2022. Companies that do manage to raise funds are seeing their valuations squeezed. According to Carta, an equity platform for startups, in the first quarter of 2023 almost a fifth of all venture deals were “down rounds”, where companies raise capital at a lower valuation than before. The valuation of Stripe, a fintech star, fell from $95bn to $50bn after its latest funding round in March. 💸 So why is this a good thing? 🙌 because the start ups are getting leaner and more efficient 💪 Harder…tougher …angrier … And more aggressive. They are going to execute without bludgeoning the market into submission with excessive cash and hiring. They are going to ship product that works and make money before they get big scale up cash. 💯 The ones that make it will be sure things. 🔥 And when the cash starts floating around again the investment rounds will be massive in companies that will look a lot more certain and the scaling will be faster than anything we have ever seen. 🚀 In 2018 the typical firm that raised a total of between $10m and $25m had around 50 employees. In 2023 a similar one would employ 41. 👥 Openai, which created Chatgpt, has raised $1.2bn with 160 employees. Adept, a company started by former employees of DeepMind, an ai lab owned by Alphabet, has raised $415m with 37 employees. Compare that with darlings of the previous startup boom. Klarna, a Swedish payments firm that experienced wild growth in the go-go years, had 2,700 employees by the time it raised $1.2bn. Databricks, a database-maker, had a staff of 1,700 at a similar stage. These are good times not bad. 😎 there are still plenty of jobs around for a hungry sales person prepared to do the dirty stuff and in a year or two the cash will start flowing again and we can all have stupid salaries and slides int he offices ALL OVER AGAIN! 🎉 what do you lot think? let me know in the comments. 💬

There has been so much talk about what is going on with startups and venture capital. The reality, is your perspective depends a lot on where you are engaged in the lifecycle of startups...🤔 For early-stage investors (Pre-Seed, Seed and Series-A), the quantity of deals has gone down, but the quality of deals has gone up and the end result is that prices are mostly un-impacted. A couple of reasons this could be: ✅ The end of entrepreneurial tourism - when the entrepreneurship reverts back to being a "hard" job, a lot of people leave the market and you are left with the real fanatics. I can't imagine anyone better to build a company. ✅ Time gap between early-stage companies and liquidity - valuable things take a long time to build, and startups are no different. The companies that are started today won't become liquid for 10 to 15 years so, the state of the market today is pretty irrelevant as it relates to valuations. ✅ Exceptional talent is re-entering the market - for years, the best talent in this country has been locked up in the best companies in this country. That's no longer true! Extremely talented and motivated people are being laid off every month. Many of them are choosing to go and start the next, Uber, Dropbox, Airbnb, or Facebook. ✅ The deflationary impact of AI - most technologies are deflationary, and AI is no different. Artificial intelligence is letting founders do a lot more with a lot less, a lot sooner in the life-cycle of their businesses. That is being reflected in current valuations, and will turbo-charge this companies as they grow. 📋 CONCLUSION You can't time the market any more that you can time the waves, but you can time the seasons. It's definitely spring time for early-stage companies and the tail-end of winter for later stage companies. It is a good time to be investing, time, talent and money if you are an early-stage founders or investor. If you are a later stage founder or investor, it is a good time to hunker-down and wait for the storm to pass. #ycombinator #techstars #venturecapital #ai Lobby Capital David Hornik Eric Carlborg Buddy Arnheim Selina Tobaccowala James Everingham Kevin Johnson Candice Faktor August Capital Georgia Institute of Technology Stanford University Graduate School of Business

Catalyst Software was mentioned in CNBC's latest spotlight on NYC's thriving tech scene alongside tech titans like Datadog, MongoDB, and DigitalOcean. If you've ever wondered why New York City is the best place to launch a tech startup, here are 3 quick reasons why👇: 1. Evolving Tech Ecosystem From the finance-driven streets of Wall Street to a vibrant tech hotspot, New York City has transformed from a siloed hub for bankers and consultants to a leading tech community. Powerhouse businesses such as Datadog, UiPath, MongoDB, Etsy, and DigitalOcean didn't merely pave the way; they fostered a community brimming with ideas. A wave of startups that drew inspiration from their model emerged, revolutionizing not just fintech but the entire tech industry. Catalyst is also more than just a part of this ecosystem; like the companies above, we believe deeply in further supporting our employees and neighborhood. Cliff Kim, our previous product leader, left Catalyst to found Digraph, another amazing NYC startup in which I am proud to be an investor. 2. Capital at Your Doorsteps Last year, NYC came in second only to California, with $29.2 billion invested in 2,048 startups. Over the last nine years, capital deployment has soared sevenfold! I can personally attest to the city's cafes and hotels being packed with venture capitalists. As a CEO in New York, the days of flying to California for funding are long gone. Top VC firms such as Index Ventures and Lightspeed have recognized the city's potential and established a strong presence here. 3. Talent Everywhere You Look With tech behemoths like Google and Salesforce expanding their presence in New York City, the size of the talent pool has amplified. From seasoned engineers to visionary product managers, and from experienced sales/CS teams to creative marketers, NYC has become a melting pot of expertise. This surge in talent, combined with the city's rapidly maturing tech ecosystem, ensures that whether you're a startup or an established firm, finding the perfect fit for any role is no longer a daunting task but an exciting opportunity. From my days as a #customersuccess leader to becoming a CEO and investor, New York City has been the backdrop for it all. Here's to a city that never sleeps and is always innovating 🍎 #NYCTech #StartupJourney #CEO #Founder https://lnkd.in/d7EsCSrx 

Slow fundraising environment seeming like a drag? Think again -It’s a great time for startup founders! History shows us that challenging economic times breed an outsize number of successful startups. The Great Recession saw the birth of companies like Uber, Square, and Airbnb, among many other household names. In my latest post for the Forbes Business Council, I unpack the most important reasons why today’s generation of founders are poised to be an outperforming class. Dive in here: https://lnkd.in/dc96eRnP

This is the simplest advice Jeff Bezos ever gave. As founders, we're often chasing the hot new thing. The latest fads and trends in tech that seem poised to be the "next big thing." But here’s some real wisdom: Do what’s passion-driven, not popularity-driven. It's advice that holds up whether it's 1849 or 2024. Gold rushes come and go, but caring about your product is immutable. I see this play out in founders often. “I’m jumping into Web3, that’s the new big wave!” “If you don’t go all in on the metaverse, you’re ngmi” They're treating startups like gold panning. Building a startup is deeply personal. It's all-encompassing. It demands 99% of your being if you want it to truly be great. Every founder worth their salt knows that a tough time is always right around the corner. Guess what happens when a tough time hits a non-passionate founder? They quit. They relent. They re-think everything. I envision myself at 80, looking back, wishing I’d minimized my regrets earlier on. I know if I chase short-term trends and financial outcomes only, I will regret it later. Forget about what's hot in 2024. What do you want to be known for in 2064?

It was just a matter of time before it happened . Iron rule of capitalism is that capital flows to the most efficient user of the capital on a risk adjusted basis. This rule can not be violated on a sustained basis. A longish story in today's NYT but worth a read. 3200 startups have shut down this year; they had raised $32 billion in aggregate, averaging $10 million each. Many of them were Unicorns at one time or the other. Number of Unicorns had ballooned to over 1000, meaning that they were worth over a trillion dollar. I think all this just a beginning, a lot more of it is yet to come. The whole deck needs to be cleared like what happened after the dotcom bust. Most of these companies had pursued growth at any cost and just ran out of options as money dried up. After companies like Facebook and Google went public earlier this century, huge amount of money rushed in in this asset class. Valuations went up through the roof, attracting even more money in. Many companies were able to attract hundreds of millions, even billions, of dollars. As cost of capital dropped, business models became ever more slothful, needing even more capital with no prospect of ever becoming profitable. Entrepreneurial economy per necessity is a go-go economy and requires funding of wild dreams with a hope that a megahit will make it worth its while. On the surface it appears that it has no discipline, it requires an immense amount of discipline from both investors and entrepreneurs. Funding business models that continue to lose money is just nonsense. Entrepreneurs believing that they can attract capital forever are just being foolish. A good sense is starting to prevail. Valuations are becoming reasonable. A good time to invest in startups again........