Aarish Shah

I have spoken with more early-stage Founders in the first half of this year than any other full year previously. A lot of the time, a big focus for them is around fundraising and it's always high on the discussion agenda (both pre and post raising). Questions like the below are front of centre of them conversations: ▶ What advice can you give me when I'm sitting down with an investor? ▶ What do you think of my pitch deck? ▶ Is there anyone you can introduce me to who's interested in what I'm building? ▶ Once we've raised, how do we start building but keeping the runway extended as long as possible? I received a great email from Hustle Fund earlier in the month with the clear message to Founders to know your numbers and know them in detail. I hope they don't mind me sharing but below are 5 areas they shared that a Founder(s) must know and be able to talk about. There are definitely more you need to be prepared to discuss but these are ones you should absolutely know. 𝟭. 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 How much revenue did you earn this month? Last month? The month before? 🔹 Which acquisition channels drove revenue? 🔹 What is the cost of your product (or subscription)? 🔹 How much of your revenue is attributed to the product vs. your consulting services? 🔹 Excluding marketing, what are your margins? 𝟮. 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 What is your cost per acquisition? 🔹 What is your website conversion rate? 🔹 How many daily active users do you have? How many monthly? 🔹 What is your retention rate?  🔹 What is your monthly churn? 𝟯. 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 How much have you raised to date?  🔹 How much are you raising now? 🔹 What were the terms in your last round? 🔹 What are the terms in this round?   𝟰. 𝗠𝗶𝗹𝗲𝘀𝘁𝗼𝗻𝗲 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 What milestones do you expect to hit with this raise? 🔹 What metrics do you care about when measuring the health of your business? Why?   𝟱. 𝗦𝗹𝗶𝗰𝗶𝗻𝗴 𝗮𝗻𝗱 𝗗𝗶𝗰𝗶𝗻𝗴 🔹 How have your conversion rates changed over time? Have they increased, decreased, or stayed the same? 🔹 How have different customer acquisition channels performed? For example, what is the difference in conversion rate between Facebook ads versus LinkedIn ads? I hope the above helps guide the Founders out there who are engaging in conversations with VC's / Investors. I'm happy to talk through with anyone in my network who would appreciate a sounding board going into investor meetings, would like to discuss support in getting ready to raise or you have raised and need support around next steps. #founders #startups #investors #vcs

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This guide outlines the funding journey from Pre-Seed to Series C and beyond: - Pre-Seed: Focus on concept, team, and initial validation. - Seed: Prove market fit and scalability. - Series A: Demonstrate revenue growth and user base. - Series B: Scale operations with solid financials. - Series C+: Prepare for major expansion and exit strategies. Insight: Each funding stage builds on the previous one. Early rounds focus on validation and product-market fit, while later stages emphasize scaling and financial stability. The goal is to show continuous growth and potential to attract investors. Subscribe to ‘Siliconnector’ Telegram channel for insights and news from Tech world and Silicon Valley: https://t.me/siliconnector

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Highlighting: "The market for a bespoke solution like Holoride may be narrower than its founders once hoped." "No shit, Sherlock." This was a niche of a niche of a niche that I honestly never understood. Imagine starting with the people who are VR enthusiasts, and then reducing by the people who want VR in cars, and then the people who have recent year Audis, and then people in Germany (the USA was added later), and then the people who will buy a $700 semi-enterprise package that comes with access to only a dozen games, but also a $20 a month subscription. This is like 1% of 1% of 1% of 1% of 1% of 1%. The shocking thing is not that they ran out of funding. The shocking thing is that they EVER got any funding. Oh and keep in mind, all that fun stuff about VR being 6DoF, roomscale, body movements, arm movements, hand tracking? All gone. This is semi-3DOF locked in your seat holding a console style knock off bluetooth controller. The VR headset? HTC Vive Flow. The gamepad? 8BitDo Pro 2 Gamepad. The cars supported? Only the Audi A4, A5, A6, A7, A8, Q5, Q7, Q7, Q8, Audi e-tron, Audi e-tron Sportback, Audi e-tron GT* Nothing else. No other makes and models. Just a few Audis. Who does this?! Seriously? Its like developing a PC Game that can only be played by people in Madison, Wisconsin running Mac Pro towers built between 2009-2015, and they can play that game on Wednesday on odd dates of the month. Who does this?! This isn't a business. It's a boutique artisanal popup shop selling handcrafted farts to people who can't smell. It's just confusing. ----- UploadVR: "Holoride Insolvent As Investment Falls Through: 'Pioneering Is Painful'" (IAN HAMILTON) (10 MAY 2024) Holoride's founders say they've filed "for insolvency" after an investment round fell apart. The startup built a platform to present VR headset as in-car entertainment with demos offered at trade shows like CES showing off the concept and a partnership with Audi to sell it to for use in cars in Germany. Holoride CEO and co-founder Nils Wollny acknowledged making mistakes in a post on LinkedIn, that “pioneering is painful” and they "missed our first shot." Responding to questions from UploadVR, Wollny explained over direct message that some employees had been laid off “in February this year based on a new strategic direction. Our team's right-sizing was also based on terms we had agreed on with our planned lead investor.” “While our business operations continue, we are working with the provisional insolvency administrator to find a solution by the end of June to ensure the continued existence of holoride GmbH and conclude our strategic repositioning, which we have intensively worked on.” UploadVR: https://lnkd.in/g32pFPrA #vr #xr #holoride #puzzling

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I had the pleasure of sitting down with 10 companies from the LX Health accelerator programme last week to discuss the future of HealthTech. I was blown away by the depth of thinking and new approaches to old problems. Some main takeaways: 💡It is so exciting to see how many people are looking to solve healthcare provider problems, not just patient challenges. Solving major business problems in this space can have a huge multiplier effect that impacts the whole system. Historically healthcare providers have been slow to adopt new tech, so the productivity gain to be had in moving to B2B SaaS + AI is huge and the scope for impact is 🤯. 💡Critical therefore to focus on the problem within the problem. Not the market problem (the big picture problem like asymmetry of information, or child mortality) but the specific customer problem, hitting their bottom line and operations. How are you directly helping this business e.g. regulatory compliance, reducing admin hours and cost by x%, adding a new revenue line, etc. 💡 As much as I would love for the primary motivation for buyers to be improving outcomes for humanity, at its core people buy for 4 key reasons - 1. It makes them money 🤑, 2. It saves them money 📈, 3. It makes their life much easier 😌, 4. It makes them look good 😎.

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Just read Elizabeth "Beezer" Clarkson's tweet on the seed to Series A gap. It reminded me of why I wrote a book called 'Journey to Series A' last year. It was inspired by the challenges many startups face when scaling up. And offers practical guidance for founders on how to prepare and successfully raise a Series A round. Watch an excerpt below, full link in the comments. #startups #fundraising #SeriesA

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😱Fundraising Scam - Part 2 and What I've Decided to Do About It😱 After the post I did a week ago, I was contacted by 6 other founders who went through the same experience. It's unbelievable how common this is, and yet no one is talking about it, let alone doing something about it. I have just posted my latest blog talking more about fundraising scams. This time it's about the experiences of other founders I know. With all these scary stories and bad market players, I know there are more decent people in the startup ecosystem (I can guarantee this as I've met many of them). I do not think the scammers can be stopped, but together we can raise awareness so these scammers won't stand a chance. I decided to start collecting data on scam incidents and the scammers, and later make it available to a wider audience. See more details in the post: https://lnkd.in/eXCfS86a

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For all female founders raising capital. I’m publishing the raw data from my pitching process with Deployed – over 420 VC firms, 143 meetings; 196 “no” and raised ~$5M over the pre-seed and seed rounds. I am a meticulous note keeper and data junky. As I have moved on from Deployed as CEO, this now gives me the opportunity to talk more about funders and founders. Here is my data on my first round of the process to get meetings from an original list of 4,000 in a Sankey diagram. ✂️ I shortlisted 420 funders 📣 I reached out to 342 funders ❌ I got 196 first nos 🙋🏼‍♀️ I met with 143 A couple got lost along the way. I will be digging into this data over the coming weeks and I will update with more insight based on my *meticulous notes* 😁 Future topics I will cover: - What the numbers mean: how many meetings, how much prep, how much time and duration-stats. - Choosing the right market - European fundraising in context: Sitting next to the biggest pile of money, Europe is not it. - Down-selecting: How I selected who we emailed for meetings and pitched to from 4000 potential funders. - Warm Leads - the No’s and the Yes’s: How a warm lead is most definitely a better strategy than cold outreach (what my data suggests). - Wrong questions, wrong time: the importance of asking, and being asked, the right questions for the stage and thesis. - Preparation: I used DocSend, and here are the numbers of when VCs would go into the document, and where they would spend their time. This is eye opening 👀 - First and last pitch analysis: Of the 143 pitches that I made, further analysis of the process to reach the final lead and follow on investors. You gossip junkies - I won’t be calling anyone out, and I’ll reflect on what I wish I knew from the start. The material will be written for both funders and founders as balanced as I can possibly be. Share in the comments below any other topics you want me to cover. #vc #startup #femalefounder #fundraising #womenintech #womeninenterprise #venturecapital #data Thanks Francois Mazoudier & Marcela Donatello. Elizabeth Stokoe Dana Kanze Ladi Greenstreet Sally Guyer Angel Academe - increasing female investment HERMESA Amrock Ventures Ltd M12, Microsoft's Venture Fund Navjot Virk Mayfield Fund Portfolio Ventures Karina Vazirova Jessica Lin Marla Shapiro Sarah Turner Amy Lewin https://lnkd.in/esE3Ee7j

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Numbers & insights from a deep tech venture studio that launched 11 companies (all are active) in the last 7 years, reaching £85M valuation across the portfolio: 1. Post Urban, initially bootstrapped by Luke Robinson, an academic with a PhD in physics from Cambridge, now operates with external funding from a UK-based fund. 2. Launched 5 companies during the first 5 years and 6 companies during the last 2 years. 3. All 11 completed pre-seed rounds; 1 of them got Series A, 2 of them are approaching their Series A. 4. The startups have collectively raised ~£25M in venture capital, in addition to receiving grants. The total valuation of the 11 companies is ~£85M, half of which have not yet undergone subsequent funding rounds. 5. Initial equity splits: the venture builder 20%, CEOs of startups 35% (vests over 4 years), CTOs – 20-25%, employees 10-15%. 6. The initial valuation of startups was £2 million, with £300K invested by the venture builder. The last 2 startups were at £3.5-4M initial valuation. 7. Building deep tech ventures requires significantly higher initial funding because these projects need more time to develop demonstrable products. Two portfolio companies hit £1M in ARR. 8. The venture builder has increased the capital for the last 2 startups to ensure they reach meaningful milestones. The CEOs of the startups were able to secure additional funding through their networks, £350K and £450K, respectively. 9. The deep tech investor pool is smaller than that for sectors like SaaS, which requires a stronger proof of concept and market readiness to attract funding. 10. 3-4 times, potential customers became investors in Post Urban Ventures. This is a great approach because it secures investment and validates the concept by gauging whether these potential customers truly believe in the solution and its market necessity. 11. They don't start with a technology or an idea; instead, they integrate insights about global problems and, by actively engaging with advisory boards, founders, and industry experts, identify pain points and align them with technological solutions. 12. They do not bring universities in as co-founders but source scientists or professors to contribute to research and development. This involves leveraging academic expertise to support the technical aspects of startup projects until a prototype is developed. 13. The studio maintains strong connections with major academic institutions, including Cambridge, Oxford, Imperial College, and UCL, supporting its deep tech focus and facilitating access to new technologies and potential founders. 14. Areas of focus in deep tech: AI (Knowledge Graphs, NLP, DNNs, Computer Vision, Edge AI, Active Learning), Quantum Technologies, Biotech, AgTech, Enterprise SaaS. Watch the full interview to gain insights into the portfolio companies, handling IP collaborations with universities, key challenges, and team construction: https://lnkd.in/dCi7fZ7G

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On 22nd Feb, Dan Siroker and I disagreed about funding round dilution on Twitter. In this episode we hash it out 🥊 ❌ Fundraising rules that are BS 🗣️ What VC’s really mean & want 💸 Getting Peter Fenton to invest for less than 10% My key lessons from winning this fight 👇 1. The Importance of Focus I worked on thousands of things at my first company & thought everything was important. In hindsight, there were only 3 or 4 things that made a difference. Founders need to distinguish between which tasks are truly important & focus on them. 2. The Big Secret When An Investor Asks How Much Are You Raising? They are actually asking how much you think you’re worth. Instead of giving a number, say you’re selling a certain percentage & letting the market decide the valuation. This annoys investors because they don’t get what they want. 3. Elad Gil on When and How to Pivot  The things that work tend to work really fast. Sticking it out & being perseverant doesn’t always work. You have to see some glimmer of hope in the early days. 4. Contrarian View on Selling Stock as Employees Founders should let employees sell their stock at any point. I’ve let my employees sell up to 25% when we were oversubscribed in our series A. My theory is more liquidity = more retention. 5. When They Bring up Title It Is a Bad Sign It shows you where their values are. The best people I’ve hired never brought up titles during the interview. They care about the problem & the company. 6. Why Always Be Raising is Total BS You need to have an on & off switch on fundraising. I have all my investor meetings in a week every two quarters. This removes any distractions when I’m building the company. 7. The Best Question Peter Fenton Asks Founders "What will excite you about being at this business in five years?" Great founders need to be perseverant. They have to stay in love with the business in 5, 10, or 20 years. (links in comments) #founder #funding #business #investing #vc #venturecapital #entrepreneur #startup #seed #funding #fundraising

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Just a random thought: A few weeks ago I was in a group of US-based emerging VCs and this person - whom I'm always delighted to have a chat with, asked why there were more minority GPs in the group than the typical and archetype GPs (if you know what I mean). I told him that I didn't have an answer to the question because I wasn't part of the selection process - which was supposed to purely be based on their performance. But in the back of my head was another question: if most of the GPs in the group are of the similar background - e.g., 90%+ of them went to Stanford, Harvard, MIT, etc and they all had a previous career at other VC shops, does the skin color really matter? When they all came from similar paths in their lives, does more skin colors really make the VC ecosystem more diverse? I'm all for having more colors in the VC ecosystem - I'm +1 of that color anyway, but at the same time I just think truly diversifying the VC universe takes more than just adding more colors.

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What are the war stories around raising right now? Here are just a few of the things we're seeing across the board, in the conversations we have with founders on a daily basis as CFOs. ➡️ A deal isn't done till it's done - Despite having a term sheet in front of you, time to close / time to cash in bank has anecdotally risen quite considerably. However long you think it's going to take, add 3 months and then expect it to still drag further. ➡️ Down rounds, flat rounds and all that jazz - I remember last year talking to founders who were (naively) thinking that if they held out for a while, they would see a return to some of the multiples and valuations we were seeing in the early 2020s. Clearly that ship has sailed (unless you're an AI startup), especially post Seed, so founders need to be on top of their cap table modelling. ➡️ A bridge too far - Of course, not everyone is even getting to a priced round, which means that founders are shoring up capital with bridge rounds, often on convertibles or SAFEs with the hope that they will hit the milestones they need to get to a more traditional round down the track. It's all about the discount and the cap at this point. ➡️ Control, control, control - Apart from the obvious inclusion of liquiditation preferences (which have always existed in 'later' stage financings, we're seeing a move by investors to either have more control via board seats, or via reserved matters - i.e. what founders must get investor consent to do. ➡️ The game has changed - Growth will never fall out of favour, it is necessary for the current model of VC to make any kind of sense, however what has changed is the balance expected between scale and efficiency. It's no longer enough to just grow like the clappers, you've got to do it in a way that preserves capital and drives the business towards profitability much sooner than was ever the case before. What are others seeing in the market, let's help founders everywhere ensure they're prepared.

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