Fresh Insights

Analyses, Musings & Observations

Strategic investors do not add value

Often we hear founders get excited about strategic investors – corporations making venture investments – because the founders think the strategic investor will assist with the product roadmap, become a customer, intro the company to new customers, add credibility, and potentially acquire the company at some point.  However, strategic investors have not been a benefit…
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Measuring B2C cohorts

For any B2C business, cohort performance is critical.  A cohort is a set of customers acquired during a certain time period – for instance the January 2018 cohort is all customers acquired in January 2018.  Key metrics in evaluating cohort performance include looking at the marketing spend it took to acquire the cohort, the amount…
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Streaming music trends

When a company files to go public, they do so by submitting a document called an S1 to the SEC.  An S1 is like a prospectus, and sometimes it’s loaded with really interesting industry information.  Sonos, which recently went public, is a great example of such an S1.  Below are some facts and trends about…
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Software doesnt scale

Do big software companies benefit from economies of scale? While the default answer may seem like ‘yes’, we wanted to see if that was really true.   We looked at new revenue divided by sales and marketing spend of SaaS companies at the time they went public.  We then compared that figure to the same…
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Why you shouldn’t build a relationship with VC

Building a relationship with VC and speaking to VC when you’re not fundraising doesn’t make much sense, isn’t a good use of your time, and may actually be detrimental to your business.  Here is why:   You have better things to do.  We love founders that are so busy building the business, they’d prefer to…
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How long will your exit take

We looked at how long it took 128 publicly traded tech companies to exit.  Specifically, we used their S1’s – a securities filing a company makes before IPO – to find out the year each company was founded and compared it to the last year financials were released as a private company.  The data is…
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The real role of a CEO

We’ve invested in 19 companies since our founding and we’ve seen some CEO’s use their time much better than others.  In our view, below are the tasks a CEO should prioritize.  After that we’ll share some of the things we see CEO’s do that aren’t a good use of their time.   Partnerships.  One of…
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CEO salaries

We’ve seen a wide range of CEO salaries in our portfolio, from as low as $35k annually to as much as $325k (plus bonus).  While there is no dataset explicitly outlining salary levels at early stage companies, we can use the salaries from tech companies at their IPO to get a sense for what the…
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Non-recurring revenue is important

VC love recurring revenue and many VC won’t ascribe any value to non-recurring revenue streams.  That said, do not forsake non-recurring revenue streams.  If you do, you’re ignoring free financing and a way to make the product stickier.  Non-recurring revenue streams like onboarding fees and installation fees are a fantastic source of cash, which means…
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Sales Hack: remove steps & friction

How many clicks does it take someone to actually purchase your product? How many steps are between your customers’ dollars and your product? Do everything you can to make the purchasing process as frictionless as possible, because extra steps and friction are costing you sales.   While that seems obvious and intuitive, in practice companies…
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