Andreas Gauger

Market size slide often misses the mark due to a standardized approach by pitch coaching. This template mandates the inclusion of TAM, SAM, and SOM in three bubbles. You can find such templates all over the internet. 👀 Everywhere I found that entrepreneur claims “Our global TAM is $X B, but we are going to start in a certain part where our SAM is $Y B. And we project that our SOM is $Z B” It’s clear why entrepreneurs try to pump up their market size. They’ve been told that VC only interested in unicorns, and so they assume that the best way to become a unicorn is to go for the largest market. The thinking is that it's easier to get 2% of a very large market than it is to get 20% of a smaller market. So, they search for market data that allow them to claim that their TAM is $56B, or $256B, or even better, $2.5T. When this slide appears, most investors chuckle. Investors generally don’t give any credence to the market size. We may still ask founders how big their target market is, but the point is to see 'how founders think about segmentation, not to rate the startup based on how big they think.' 💡 Savvy investors prefer startups go after a market that doesn't yet exist. Better to create the market than try to unseat established competitors. Rather than claiming that you can disrupt a existing market, what’s more relevant and compelling is how you answer questions such as: 👇 1. Who are your target customers? 2. How will you reach them? 3. How many can you reach? 4. How will you convert them? 5. How many can you convert? 6. How will you onboard them? 7. How much will that cost? 8. What is a customer worth? 9. How many customers will you acquire this year,Next year,The year after? Most investors want to see market opportunity, not market size. They need to see that you understand more about your approach of reaching & onboard customers. Founders should build a bottom-up model that demonstrates how you will build a big, profitable, customer by customer business. Don’t suggest that your focus is on acquiring market share in a large market. 🙆‍♀️ We’ve heard several pitch on wearable technologies for dogs. They claim - there are 90M dogs in the US alone — at $9.95 a month subscription, that’s a $10B market! But truth is It doesn’t matter if there are only 20M or 200M dogs. What matters is how many dog owners the entrepreneur can convince, one by one, to sign up for this service. Define your target precisely, like "urban professionals, 25-35, earning $80,000+, active Instagram users, and dog owners." Entrepreneur should stop pitching the typical market-size slide. Instead, they should show investors that they understand the market opportunity customer by customer.💡 Check out my free newsletter for more insights: https://lnkd.in/dKZQKHg2 . #startups #funding #fundraising #founders #investors #VC #angelinvestors #founder #fund #money #runway #marketsize #market #entrepreneurship #entrepreneur #customers

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The Art of the VC Pitch: A Brief Guide to Maximizing Your Chances With Venture Capital Through Giving Better Pitches Pitching to a Venture Capital firm is different from any other kind of pitch. It's not like a sales pitch, a product pitch, or any other kind of presentation. This guide is a road map to the nuts and bolts of maximizing your opportunity when you manage to get in front of VCs

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The Startup Pricing Guide By Bessemer Venture Partner A Must-Read Guide for Founders to Understand the Ways to Monetize Their Products and Services. It includes: 1. Where to Start? 2. Companies Wait on Pricing, But Why? 2. Why Does This Matter? 3. How Does the Role of Pricing Change? 4. The Startup Pricing Journey Stage 2: Finding the Right Revenue Model Stage 3: Segmentation of the Customer Base Stage 4: Drive Upsell & Cross-Sell Stage 5: Optimizing Price Pricing is often an afterthought for tech startups, with founders focused more on product development and user adoption. However, pricing is one of the most important decisions a company will make. Startups tend to take a "kick the can down the road" approach, delaying pricing decisions due to factors like an "adoption at all costs" mentality, lack of a multidisciplinary approach, and absence of data Bessemer Venture Partners' team shared a practical approach on how to find the best way to monetize your product/services and how to scale the business model, etc. You can read in attached pdf 👇 👉 Check out my free newsletter for more insights: https://lnkd.in/dKZQKHg2 . #startup #fundraising #venturecapital #funding #fundraising #founders #founderjourney #entrepreneurship #entrepreneur #founderstories #startuptips #sharktankindia #siliconvalley #startups #vc #vcfund #vcfunding #funding #startups #pmf #product #sequoiacapital #pricing #businessmodel

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Successful ventures that have achieved Product-Market Fit and have scaled their operations will probably face this new reality: 𝗧𝗵𝗲 𝗻𝗲𝗲𝗱 𝗳𝗼𝗿 𝗹𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 𝗳𝗿𝗼𝗺 𝗽𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀. As explained by Mark Suster, this liquidity is most likely to come from Private Equity firms, who have the expertise to evaluate companies based on long-term fundamentals, much like the approach taken by Warren Buffett (rather than the speculative one from crypto-traders 😉). Valuation is not a one-time event but a dynamic process that follows a chain-like logic, where each link is interconnected. An irrational (high) valuation early in the chain can have significant repercussions later on, leading to fewer financing or liquidity options - as professional investors will not accept it. You may avoid this by establishing a clear valuation roadmap that demonstrates a consistent risk/return rationale for each type of investor, from business angels and venture capitalists to Private Equity firms and the Public Market, spanning from the first funding round to the eventual public offering. #EntryPriceMatters #ValuationRoadmap #PrivateEquity

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This is hilarious! I'm a big fan of the movie and appreciate the analogy Kevin Jurovich 🙂 While others are fixated on chasing profits, savvy (and data-driven) investors are tuning into a different frequency – one that's all about freedom to operate and staying ahead of tech trends. This is exactly why we created Evalify! It's time to unlock the potential of patents as your guiding compass 😎 More at www.evalify.ai

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🚩 22 investor red flags to look out for. 🚩 You deserve the best investors! But it’s easy to make a mistake. There are over 8,400* VCs in Europe alone. During fundraising you will meet many. And not all investors are created equal. They will all be selling themselves well. You will read and hear all kinds of superlatives. Spotting early red flags is essential. I’ve decided to help you out on this. 🚩 22 investor red flags to look out for 🚩 > Arrogant behavior > Highlife party culture mentality > No track record in your industry > Pressing you to make a decision > Slow response in communication > Slow in the due diligence process > No clear value-add besides money > Wanting to take >50% of the company > Very aggressive valuation negotiations > The VC worked only in financial services > Demanding lock-up exclusivity, during DD > Conflict of interest with other investments > No prior founder experience in the VC fund > Demanding unrealistic stake. Check trends > Wanting too many board seats or veto rights > Discouraging you to do due diligence on them > Not transparent in advance with LP constraints > No exploratory calls with your customers (if any) > Corruption proposals. Getting you into a scheme > Late for meetings and acting like nothing’s wrong > Bad feedback on them by their portfolio founders. > No transparency on process, criteria, decision-makers If you see any of these red flags, be cautious. Dig deeper. If things don’t look well, move on. It’s 8,400* of them in Europe alone. P.S. What red flags would you add? 🚩 Let's discuss in the comments. ⬇️ *According to Crunchbase

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💡Exciting findings from ChartMogul‘s latest SaaS Growth Report for founders. Did you know❓Bootstrapped SaaS startups are hitting $500k ARR just as swiftly as their VC-funded peers. This data challenges the belief that early-stage capital is necessary for rapid growth. While paths diverge post-$500k, achieving initial milestones like product-market fit seems equally feasible without early equity dilution. Check out the post of Dirk for more insights. 🤗 #saas #startup #bootstrapping #venturecapital #businessinsights

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Platforms are making BANK selling data for LLM training: ➡️ Reddit: $60m / year ➡️ NewsCorp: $50m / year ➡️ Axel Springer: $30m / year ➡️ FT: $10m / year ➡️ AP: $5m / year Question: What method do platforms use to value this data?

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🌟 How VCs Decide to Take a First Meeting? 12 Key Factors 🌟 Raising funds for your startup? Here are the crucial elements that VCs consider when deciding to take that first meeting: 1️⃣ Team – How do we know your team is excellent? ↘️ The quality and experience of the founding team are crucial. Investors look for founders who can learn quickly and have a track record of excellence in previous endeavors. The team should demonstrate their ability to scale and manage various aspects of the business. 2️⃣ Company – Describe what your company does in one sentence. ↘️ Founders need to succinctly describe what their company does in one sentence. This "cocktail party pitch" should be engaging, emotional, and intriguing to capture the investor's attention. 3️⃣ Market – What is the market opportunity and why will it be big? ↘️ The market opportunity should be large and compelling. Founders should articulate why their market is significant and how their startup can expand it. 4️⃣ Business model – How do you make money? Who pays? What are the margins? ↘️ Clarity on how the company makes money, who pays, and what the margins are is essential. Investors need to understand the unit economics and potential scalability of the business model. 5️⃣ Geography – Where is the team based? ↘️ The location of the team can influence the investor's decision, especially if the investor prefers to invest locally or has a bias towards or against distributed teams. 6️⃣ Number of Employees – How big is your team? ↘️ The size of the team gives investors a sense of the company's stage and operational expenses, helping set expectations for progress and sophistication. 7️⃣ Timing – Why is now the right timing for your company? ↘️ Founders need to explain why now is the right time for their startup, considering recent market trends, technological advances, regulatory changes, or shifts in consumer behavior. 8️⃣ Traction – What are the traction metrics that show what you have achieved so far? ↘️ Demonstrating traction through relevant metrics is vital. Early-stage startups can use qualitative metrics like customer testimonials if quantitative data is limited. 9️⃣ Fundraising – How much do you want to raise? ↘️ Clarity on the amount of money being raised. Founders should have a specific target rather than a range and be prepared to justify the amount in terms of the company's needs and growth plans. 10. Fundraising History – Who have you raised from, how much, and when? ↘️ Information about previous funding rounds, including amounts raised and from whom, helps investors understand the startup's financial history. 11. Fit – What about this particular investor (or firm) makes you interested in meeting with them? ↘️ Founders should articulate why they are interested in a particular investor or firm, showing alignment with the investor's focus and expertise. 12. Referrer – Who introduced you to the VC? ↘️ An introduction from a trusted source can secure a meeting with a VC.

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Pitching to VCs is a game changer, but most founders struggle to nail it... Here's the secret sauce that can transform your pitch: ➡️Emotions trump facts. Yeah, you heard that right. VCs invest based on feelings and narratives, not just cold, hard data. Your pitch needs to hit them in the gut, not just the brain. ➡️The 5-second rule isn't just for dropped food. Your slides? They need to convey their message in just 5 seconds. Any longer, and you've lost them. ➡️KISS isn't just a band. Keep It Simple, Stupid. Complexity scares investors faster than a bear market. ➡️Steering into objections is the new avoiding them. Don't dodge tough questions, tackle them head-on. It shows you've got guts and brains. ➡️White space is your best friend. Your deck should be as clean as a whistle. Clutter kills interest faster than a bad term sheet. Here's the bottom line: Pitching isn't just about your product or your numbers. It's about selling a vision, a story, and most importantly, yourself. Master these elements, and you'll be speaking the language VCs understand best - the language of potential, passion, and profit. Remember, in the high-stakes game of VC funding, it's not just about having a great idea. It's about presenting that idea in a way that ignites imagination and opens wallets. So go out there, tell your story, and make those VCs believe they'd be crazy not to invest in you. P.S. What’s that one part of your pitch that has excited investors to sign a cheque? #fundraising #startups #entrepreneurship #presentation #growth

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Pitching to VC is to earn a 2nd conversation Keep it simple: 10 slides, 20 mins, 30 point fonts

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𝗛𝗼𝘄 𝗱𝗼 𝗜 𝘃𝗮𝗹𝘂𝗲 𝗮 𝗽𝗿𝗲-𝗿𝗲𝘃𝗲𝗻𝘂𝗲 𝘀𝘁𝗮𝗿𝘁𝘂𝗽? (𝗧𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝗹𝗲𝗻𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗕𝗘𝗥𝗞𝗨𝗦 𝗺𝗲𝘁𝗵𝗼𝗱) 𝗪𝗲𝗹𝗰𝗼𝗺𝗲 𝘁𝗼 𝗗𝗮𝘆 𝟭𝟭 𝗼𝗳 𝘁𝗵𝗲 𝗮𝗻𝗴𝗲𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝗰𝗼𝘂𝗿𝘀𝗲: 𝗦𝘁𝗮𝗿𝘁𝘂𝗽 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 - 𝗕𝗲𝗿𝗸𝘂𝘀 𝗠𝗲𝘁𝗵𝗼𝗱𝗼𝗹𝗼𝗴𝘆 This method was devised by a Venture capitalist, Dave Berkus, in the 1990s. It is based on the principle that a startup's value is based on its potential rather than its actual performance. This makes it different from other valuation methods that focus on historical data and current financials. What kind of startups is this for? This is strictly for startups with some of the following properties: - Idea stage/pre-revenue startups - Uncertain markets - Unproven team - May or may not have an MVP (Minimum Viable Product) - Limited or no history It emphasizes 5 parameters (which can be changed) for valuation: -Idea -Prototype -Team -Strategic relationships -Got to Market/Sales Strategy Each of these parameters has 20% weightage, and basis of one's evaluation of a startup, one needs to give them a rating on the scale of 0-$1M/$2M. Let's take an example to understand how this method works: Assume I came across a startup that pitched to me recently, and I have my sheet with the below 5 parameters where I need to rate them on a scale of 0-1. Basis my interaction, research, and homework, I give them the below points, which translate into their valuation - 1) Idea -> Good idea -> 0.5  2) Prototype -> Have a working prototype and beta testing phase on -> 0.75 3) Team -> Good team on paper with amazing referrals -> 0.75  4) Strategic relationships -> Need to build a good network required for the startup -> 0.25 5) Got to Market/Sales strategy -> Clear GTM -> 1 Total - 0.5+0.75+0.75+0.25+1 = 3.25 As this was on the scale of $0 to $1M, the score of 3.25 - > $3.25M pre-money valuation. If it was on a scale of $0 to $2M, the score of 3.25 - > $6.5M pre-money valuation. Pros - Super quick, high level, and easy to arrive at, doesn't rely on any forecasts/revenues Cons - -Equal weightage to all 5 parameters - Many other parameters left out - Dependent on choosing the right benchmark value to set the maximum valuation ($2.5M vs. $5M vs. $7.5M vs. $10M) - High-skilled task as one needs to know how to score each of these parameters Many times, investors use a combination of methods to value a pre-revenue company, like the Berkus + VC Method or Scorecard + VC method (which we will cover in future posts). TDV Partners #valuation #startups #angelinvesting #funding #venturecapital

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Founders - Here are the 10 most active VC investors in generative AI. 📈 Sequoia Capital: One of the world’s largest VC firms, has invested in some of the most prominent AI startups like ChatGPT creator OpenAI and legal AI assistant Harvey. Andreessen Horowitz: Andreessen Horowitz has gone all-in on AI, pledging to back as many startups in the space as possible. Its portfolio includes Pinecone, an AI database and application development startup, and large language model creator Mistral, the French rival to OpenAI. Pioneer Fund: Investing exclusively in Y Combinator alumni, Pioneer Fund’s portfolio includes BoothAI, an automation startup for e-commerce, and Decohere, an image and video generation company. The firm has a specific AI and ML fund that is run by technical AI founders. Soma Capital: Soma Capital invests in startups across all verticals and stages with offices around the world. Its AI portfolio includes Cognition Labs, an AI agent developer, and Imbue, an AI systems creator that reached unicorn status in September. Khosla Ventures: Khosla Ventures founder Vinod Khosla has been a huge champion of AI and was the first VC backer of OpenAI. The firm has backed AI startups across a wide spectrum of areas like Replika, an AI chatbot companion startup, and SketchPro, a design assistant geared toward architects and designers. Alumni Ventures: Operating university-specific funds across the US, Alumni Ventures has an AI and machine learning fund and has backed some of the biggest startups in the space. Its portfolio includes the large language model developer Cohere as well as Lamba, a GPU cloud computing startup, both of which have achieved unicorn status. Lightspeed: Lightspeed has invested in some of the most prominent AI startups on the scene. Its portfolio includes Stability AI, the creators the video generation model stable diffusion as well as Snorkel AI, an LLM training platform for the enterprise. Gaingels: With a mission to promote social change and inclusivity through investing, Gaingels has backed startups like People.AI, an automation platform for e-commerce providers, and Shield AI, which is developing AI pilots. Tiger Global Management: Tiger Global had made some big bets in generative AI, backing two of the leading large language model creators, OpenAI and Cohere. The firm has also invested in OctoAI, an orchestration startup for tuning and tweaking models. Greylock Partners: Greylock was founded in 1965 and has backed generative AI startups including Tome, an AI storytelling platform, and Inflection, an AI chatbot creator that was absorbed by Microsoft in an unusual $650 million deal in March. (𝘍𝘳𝘰𝘮 𝘰𝘶𝘳 𝘧𝘳𝘪𝘦𝘯𝘥𝘴 𝘢𝘵 𝘗𝘪𝘵𝘤𝘩𝘉𝘰𝘰𝘬.) There you go! Need help, reach out. ~~~    Like this? Follow Gerald Duran for daily Startup and VC advice, and sometimes — a kick in the nuts. #startups #founders #venturecapital #entrepreneurship 

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Guide to Angel, Venture Capital, and Private Equity: Whether you're a founder seeking early-stage investment or an entrepreneur looking to scale up with private equity, this guide provides a comprehensive roadmap through the stages of equity financing. Key Highlights from the Guide: 1) Sources of Equity Financing: Learn about the distinctions and roles of angel investors, venture capital funds, corporate venture capital, and private equity funds. 2) Investment Criteria: Understand the specific criteria each investor type considers when evaluating startups and how to position your business accordingly. 3) Stages of Company Growth: Differentiate the financing needs at various stages, from seed capital and Series A funding to late-stage private equity investments. 4) Business Plan Essentials: Tailor your business plan with the information investors look for, including market potential, competitive advantage, and financial projections. 5) Exit Strategies: Explore the variety of exit options available, such as IPOs, strategic sales, or founder buybacks, and how to prepare for them. PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/ejp-Bhnu

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How AppTrack (a mock Micro SaaS firm) Found Their Most Effective Marketing Channel: AppTrack, a provider of time-tracking tools for freelancers, conducted structured experiments across multiple marketing channels to identify the best way to grow their user base. Here's what they discovered: 1️⃣ Paid Ads: Quick testing and significant user influx, but high acquisition costs reduced ROI. 2️⃣ Cold Outbound: Moderate insights and conversions but less cost-effective. 3️⃣ Ambassador/Affiliate Program: The most effective channel, leveraging influencer networks for high trust, conversion rates, and ROI. 4️⃣ Blog Content for SEO: Long-term strategy with low immediate ROI but valuable for organic growth. Outcome: Through strategic channel experimentation, AppTrack determined that the Ambassador/Affiliate Program was their most effective channel, striking a balance between cost, conversion rate, and ROI.

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How Do You Tell A Compelling Story About Your Company To Investors? Every founder believes they have an awesome team and technology; the question is, what will investors think? In fundraising, most founders are tempted to jump straight into PowerPoint to get started. Don’t do it! Remember "It’s not about the slides; it’s about the story." So how do you tell a compelling story? - First, figure out which type of story you should be telling and make that narrative into a sandwich, emphasizing the key point at the beginning and again at the end. Next, use your problem and solution statements to emotionally and intellectually engage your audience, and be sure to adequately address all the expected areas in the deck. With all that in mind, you’ll be ready to follow three simple steps to craft your winning deck. - Choose The Right Story To Tell The first and most important thing to decide about your pitch is which story you should be telling. Fiction may have seven plot archetypes, but pitches tend to fall into one of four narratives, listed here in order of strength: Traction. This is the story you want to be telling. Maybe your revenue or user base is growing really fast (> 20% month-over-month), or you’ve closed deals with major customers or partners. If you have traction that will impress investors, then tell a traction story. Team. Maybe you don’t have wow-factor traction yet, but you and your cofounders are successful second-time founders or have a management team with impressive pedigree. In that case, tell a people story. Technology. Or perhaps you don’t have strong traction but have created a technological breakthrough in an important field. Then you could tell a technology story. Vision. This is the story of last resort. If you don’t have impressive traction, a highly regarded team, or a technological breakthrough, then you have to fall back on a vision story of how you want to change the world. Be realistic in your self-analysis of what qualifies as “impressive.” Every founder thinks they have an awesome team and technology; the question is, what will investors think? If you’re not sure which story you should tell, then get some feedback from investors or other founders. - Make A Sandwich To capture investors’ attention and help them remember you, open the pitch with your company’s single most impressive achievement to date, and then highlight that achievement again at the very end. "Open the pitch with your company’s highest achievement." We have covered this topic in detail in the attached document.👇 🚀 Check out my free newsletter for more insights: https://lnkd.in/dKZQKHg2 . #startup #venturecapital #funding #fundraising #vc #startup #venturecapital #funding #founders #entrepreneurship #startups #founderstories #startuptips #fundraising #mvp #founderlife #entrepreneur #ycombinator #startuptips #founder

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How to Calculate Terminal ARR For Startups With A Simple Formula

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Here are some good examples to help spur new ideas for growth.

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