Clemens Komorek

Want to exit as an early-stage founder? Yes, it is possible. But it requires a different approach to typical M&A dealmaking. A bit of context… I get 5-10 messages per week from relatively early-stage founders (traction, but not massively profitable yet) who are looking to exit. There are many reasons why - one of several projects, need more stable finances, tapped out and unsure what to do next. Etc. This also applies to relatively small businesses (sub-£5M revenue), owner-operated with a good team where the motivation may be a life-style change or retirement. Now. To be blunt and honest, in 90% of cases there isn’t an exit path - usually because of mis-match in expectations. (Eg: “We’re just one small investment away from building a $BN+ company”) But. Most of the time you can salvage a £1-10M outcome over a 12-36 month period. How? By treating it as an investment case to deliver an outcome for a specific target company. For example: You have a software product that helps insurance companies manage supply-chain risk. Let’s say the business does £500k revenue and covers costs. Your average M&A Advisory would try to sell the company based on the revenue/EBITDA and (after many months of false hope) fail to do so. They will get offers - but rarely ones you want to accept. My advice - and what I always recommend founders / owners do below 1M EBITDA - is to approach specific targets with an investment case to deliver outcomes. For example: Making / saving a target insurance company Z benefits over an agreed timescale with milestone payments. Becuase taking supply chain risk. This is a multi-million, even billion, sized problem that all wrestle with - and invest significant CapEx and OpEx into annually. If you can solve that - or deliver X saving … you get Y. Sounds fair, no? This is a very standard deal in enterprise consulting land. And beats shutting the venture down and feeling like you’ve failed. No. It’s not the all-cash deal from Google. Yes. It will require work to implement. Yes. It is a viable path for most owners / founders to realise a good return for creating value in a relatively de-risked way. See. What many founders / owners overlook is that the most valuable thing they have created isn’t IP … software … their service offering … etc … It’s actually their understanding of the problem, how to solve it, and a team who can solve it. So. If you are in this situation and looking for an exit. But aren’t really acquirable yet, why not give this a go? First step is putting together a short-list of targets who you might approach and are already investing in the problem (bigger is better). Hope useful. I wish someone had given me this advice on the dozens of early-stage ideas I walked away from over the years! #exitstrategy #founder #openequity

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Uber and Lyft both launched UberX in Raleigh on the same day. Fast forward 6 months, Uber had 90% market share in the area. Here's how we won: 1. Uber's main KPI at the time was ETAs. When a rider was ready to take a trip, we wanted them to get a driver in under 5 minutes. So we launched in a very small geographic area, and our team worked our butts off to match rider and driver demand so ETAs were under 5 minutes. Thus, we launched Uber in Raleigh in a 7 mile circle in downtown Raleigh in April 2014. Lyft, on the other hand, launched in Raleigh, Durham, and Chapel Hill on that same day. They thought covering the entire area (each of those areas are 30-45 min from each other) would help them win since they were first. However, their result was 10-20 minute ETAs for the entire area. So while Uber wasn't available in Durham & Chapel Hill, Lyft's experience was already sub-par. 2. For our team to hit 5 minute ETAs in our small geo, we needed more drivers on the road AND we needed existing drivers to drive when the demand was. So we did tons of top of funnel marketing: ads, driver referrals, and flyers were the best performing methods. And for existing drivers, we looked closely at the real-time data and we'd design targeted incentives. When we saw rider demand not being met, we'd target X number of drivers with extra financial incentives to drive during those times so all ETAs were under 5 minutes. Yes, we burned money to meet rider demand. And it worked. 3. As we grew our small geo in Raleigh and more and more rides were under a 5 minute ETA, we started to build a driver base in Durham and Chapel Hill. We did driver onboarding events, we advertised that we were "coming soon" and we built up supply so come launch day, we'd cover the area well. And 3 months after we launched Raleigh (and 3 months behind Lyft), we launched Durham and Chapel Hill nearly hitting sub-5 minute ETAs on day 1. 4. Uber had local city teams at this time. Meaning my team's sole focus was on the Raleigh-Durham area. We lived, ate, and breathed Uber Raleigh. I worked day and night to grow my market and ensure happy riders and drivers. I answered every single driver support ticket myself. Lyft, on the other hand, had their company in SF overseeing the United States. They didn't have dedicated city teams. This meant when there were events going on in Raleigh, we knew about it and we'd make sure Uber drivers would be there. I don't know what Lyft did, but their presence lacked, and we'd win the big events. Fast forward 6 months from launch, Uber had a >90% market share in the Raleigh-Durham-Chapel Hill area. It taught me a valuable lesson: you don't have to be first. You just have to be focused on what matters most.

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How do I know if my idea is a good one? Ask your customer. But most founders don't do this. Instead they ask, - Their friends, families, and colleagues about the idea. - Asking investors about the idea: Investors could offer unique perspectives, however, opinion does not equal validation. Their primary concern is potential return, not necessarily idea viability. - Showing the prototype to the wrong people: Asking someone who is not one of the target customers about the prototype when they are not experiencing the problems being solved can lead to misleading insights. - Listening to words not actions: "Great concept," "I love the idea," "This is so cool," "I think I will pay for it" is not validation. Where is their action? Did they use the prototype? Did they pay for it? To truly validate the idea, founders should speak directly with target customers to understand their pain points, needs, and preferences through interviews, surveys, or focus groups. However, even most founders fail in conducting interviews and surveys properly. So, we have shared a framework in the attached PDF. It includes: 1. Ways to Validate Startup Ideas 2. Customer Discovery and how to do it? 3. Building Hypothesis and Validating it 4. Rule: You are not allowed to talk about your idea! 5. Customer Interview Guide  6. Where the magic happens #1  7. How to Interview? 8. Number of question and no. of customers to speak? 9. Asking yourself: …Is it a Really Big Problem?  10. Customer Segments - Divided into 3 phases. 11. Customer Validation 12. Case Studies: B2B, B2C & B2B2Cetc. That's it. If you find this helpful - please like, comment & share so that it reaches founders . 👉 Check out my free newsletter for more insights: https://lnkd.in/dKZQKHg2 . #startups #startup #funding #founders #investors #entrepreneur #idea #entrepreneurship #vc #venturecapital #angelinvesotrs #ideavalidation #founder #mvp #ycombinator #validation #framework #startuptips

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The highest valuation in a financing round might be attractive but often it is not the option you should chose. Because it will hurt you later. 1.) With an established valuation you also create an expectation for the exit price. E.g. if you raise at 50m you need to build a 500m company - ask yourself how feasible that is in your industry with your model 2.) The highest bidder might not be the best fit for you in terms of know-how and/or on a personal level. Given you will be "married" to your investor for a longer period of time a 100% match is important. 3.) Often raising at a more aggressive valuation takes longer, so you will put the money to work later than with a less competitive but faster round. It is worth asking yourself if some or maybe all of the additional dilution of a lower priced round will be offset by putting the money to work earlier and spending less time on fundraising. 4.) The high price might come with additional asks that can hurt you later 2x liq pref, additional guarantees.... So don't raise the price at all cost

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One very annoying thing as an angel investor is when VC outreach happens to your portfolio companies. Very often unexperienced founders get kind of excited, inform shareholder and at the very end founders sometimes don't believe that VC outreach is 99,99% irrelevant. #fckbessemer, #fckinsightventures, #fckbatteryventures

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You might disagree with me but: Having your partner as a co-founder is great. I talked to Vivien Bresson about this a while back on my podcast. Vivien and her husband have co-founded multiple companies. They love building startups together. I got some mixed reactions on this topic after releasing the podcast. Some people said they couldn’t imagine working with their partners. Mixing personal and business seems like a no-go to them. But in my personal experience, working with your partner is great. When I met my wife in Toronto, she was a beauty technician at a Korean Beauty Salon. Her clients loved her and always had ideas on improving the business, but the owner always objected. She was frustrated. I hated seeing her initiatives constantly being shot down and wanted her to be free to implement her vision. So we did our own thing. She quit her job and we set up her own beauty salon. We thought out the entire game plan on a month-long trip to Ko Pha Ngan island in Thailand. It was pretty simple: • She keeps doing what she does best: Making clients happy. • I run some digital marketing and operations in the background. We came back to Canada and got to work - and it was a mega success. She grew it from a small salon with three staff to having two locations and 12 full-time employees. • Top rated on Google. • Clients were raving about it. • Both salons were constantly packed. This isn’t supposed to be a brag about how good we are at building beauty salons. (even though we are.) It’s a reminder that building a business with your partner can be extremely fulfilling, while it might be a relationship test at times. 2 weeks ago, we visited Ko Pha Ngan island again to reminisce about the time we planned out the business together. There’s something about that island that gets us thinking about business and let’s just say - there might be something else in the works. Stay tuned…

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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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Fundraising is a numbers game. But not just because most investors will say no. (though they will) The other reason is it takes some level of volume to find the best possible investors for your company. In the best case scenario, you don't want to just raise money you want to raise from the best investors possible. Unless you already know a ton of investors (and sometimes even if you do), you'll need to meet a lot of folks to figure out: - who you vibe with most - who sees the world similar to you - who shares your values - who understands your market the best - who else already shares or can get to the conviction you have on the opportunity you're pursuing - who's network can be uniquely helpful to what you're building etc. This is one of the times when cringe statements like "investor 🤝 founder partnerships are like a marriage" or "fundraising is like dating" bares some truth. You're not marrying your VCs. And fundraising is def not the same vibes as dating in most ways. But it is an evaluative process and it takes reps to find your people. When we were raised, I was surprised at how many investors I liked in general that didn't feel like good fits for the specific company we were building.

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Tesla's EV market share (finally) fell below 50%— incumbents took 15 years to match 1 founder. Founders have more power than they've ever had: In the slower-moving world of a few decades ago, companies got their power from owning supply. Once Standard Oil controlled oil or US Steel controlled steel, it was nearly impossible to displace them. Carnegie couldn't suddenly start an oil company, Rockefeller couldn't move into steel. Those founders were often defined by a single word (Steel, Oil, Finance, Rails, etc.). The world changed slowly, so even poor managers had time to adapt. Today, change is the only thing you can take for granted. Business models that are optimized for today are unlikely to work tomorrow. And business models can't react to drastic change on their own. Only excellent operators can. That's why today's great founders can move across industries. Jeff Bezos isn't just a retailer, he's also created the world's largest marketplace and cloud computing company. Elon Musk isn't just building electric cars, he's also changed finance (PayPal) and the space industry. Steve Jobs went from making PCs to making movies. The list goes on and on—and will only get longer. The world changes so much so often, no business model is safe. EVs came so fast, even incumbents with all the money, the branding, and the marketing took way too long to react. Gen AI came and changed software "overnight". The rate of change has accelerated drastically. Everyone needs to adapt. And no one is best suited to work with constant change than founders. That's why great founders have more business power than they've ever had. /// Listen to the full episode on The Product Market Fit Show #startups #venturecapital #founders

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First-time founders don't know about pricing strategy 💸Key Pricing Takeaways: 💡 Because pricing at all stages of company growth is hard, pricing is never done. The faster early-stage companies create an iterative and collaborative culture around pricing, the better off they will be. 💡 Initial price discovery is usually a data-light decision, but it shouldn’t be a complete shot in the dark. 💡 Create pricing feedback loops that span the organization. Avoid setting and forgetting after the initial price decision, and avoid functional silos that skew pricing in one direction. 💡 Pricing is more than just the price level you set – it’s how your offer is packaged, what segments of customers are served, and how your product is positioned and communicated. As such, pricing is a multi-functional discipline needing an executivelevel champion. Let's check the document below and leave your comment #fundwise #fundraising #fundraisingtips #firsttimefoundertips #startuppricingjourney #pricingstrategy ▶Wanna get free e-book about Pitchdeck? Comment or inbox me your email. ▶Wanna get 30-min free pitchdeck review? Book here: https://lnkd.in/g4qdGS52

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Why more boards need to have a brand strategist For years now I have been consulting LPs, VCs, and Their portfolios Every time we do stakeholder interviews here are the outcomes: - We didn't think of that - This is a much better way to look at it - This will help the company get more market share What leads this to be the case? - My Strategic guidance? Yes. - Interactive Facilitation? Yes again. - Aligned Positioning for brand impact? Bingo! But why aren't the board able to do that? - Well everyone has their key skill - And while they know how to grow - An external consultant can help scale it But that's not it! As a brand strategist, I have helped - Create an audience differentiation and association - Scale growth and profits - Align direction! Both internally and externally This gives the brand a larger vision and a culture to lead it This is why more company boards should have a brand strategist Want one? We have 3 more slots for my advisory portfolio Reach out! Always, Arcui #boardadvisor #brandstrategy #VC #marketshare

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One reason the market for acquisitions might be closed if your sale valuation would be lower than your previous valuation is that your choices are: - Sell privately and the founders get killed by the preference stack, or - IPO and the pref stack gets wiped out (prefs don't survive IPOs). Theoretically, you could negotiate somewhere in between but it's hard and some VCs will have told their investors the investment has held its value because of the preference. #founders #startups #venturecapital #buildinginpublic #investinginpublic More at unbundled dot vc.

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Candidates are always asking me... “How can I still stand out even if I didn’t go to top schools or I didn’t work at the best company? Market Thesis is the key 🔑. I’ll explain: If you put in the work, prepare some markets, and find great prospects within those markets … You can still impress your interviewers. Even if: – You didn’t come from a prestigious school – You don’t have a ton of finance or investing experience – You’re liberal arts major, an undergrad or an MBA looking to gain experience. Because when you do well in Market Thesis, it gives an impression that: “Hey, even though I haven’t done this in my previous job … I can jump in tomorrow to your firm and start adding value already because I have decent ideas, I’m following the right markets and I have good instincts.” Sure, it’s a lot of work. But, in some cases, it can be a great equalizer for candidates. *** Need help preparing for a market thesis? Check this out: https://lnkd.in/gJWN8Hdh #growthequity #venturecapital #privateequity #investmentbanking #vc #buyside #investing #interviewskills #finance #networking #interviews #recruiter #headhunter

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Ask my partners Evan Allen Blair Merlino JT Benton and they'll tell you I'm a glutton for asking and figuring out not just what works, but how things work, and why. Perhaps it's the researcher side of me, but I get uneasy relying on heuristics/patterns without knowing what's causing it, not just for an intellectual curiosity standpoint, but because it introduces uncontrolled risk into the business. Power law is a classic example of this. Sure, it tends to work for large enough funds over a long-enough duration. To the degree that trend holds, everything is fine. If the trend all of a sudden breaks (some evidence suggests that may be happening in real time), then all of a sudden a lot of GPs and LPs are going to get crushed and no explanation or understanding as to why. As studio builders we don't rely on power law. We constantly develop and fine-tune our ventures to learn and master what is driving their value. We are by no means perfect, but in our estimation we're asking the right questions and seeking the right answers versus relying on a trend and hoping for the best.

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The findings of this Sifted survey make VCs seem they're copying consultant memes when advising the portfolio: cut costs! improve revenue! = more profits! 🙈 💸 84% of respondents said they were under more pressure to prioritize profitability or revenue vs a year ago; 66% of respondents were told to cut costs. 🤝 Nearly 44% of respondents said that their relationship with their VCs has gotten worse in the last 12 months, while 27% said it had gotten much worse 👎 When asked how helpful VCs had been with things like GTM strategy, customer contacts, and marketing on a scale of 1 (least helpful) to 5 (most helpful), nearly 44% rated them a 1. Read more 👇 https://lnkd.in/eyRtBh4E

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Allocate just released an analysis on a dataset of 253 venture funds, with only pre-2019 vintage years being included. The analysis shows a clear negative correlation between high risk / high reward investment profiles and size of venture fund, i.e. the smaller the funds, the higher the performance, but also the higher the risk. Two ways that LPs can mitigate the higher risk of smaller funds: 1. Diversify across more emerging managers, and 2. Invest across vintages with said managers. Here are the details: Small Funds (0-100MM): Mean TVPI: 4.3 Standard Deviation: 2.4 Median Portfolio Companies: 26 Mid-Sized Funds (100-250MM): Mean TVPI: 3.6 Standard Deviation: 2.0 Median Portfolio Companies: 24 Mid-Large (250-500MM): MeanTVPI: 3.0 Standard Deviation: 1.2 Median Portfolio Companies: 35 Large (500MM+): Mean TVPI: 2.7 Standard Deviation: 0.9 Median Portfolio Companies: 43

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I didn’t want to post this. I was afraid to look weak, to be judged. I cried myself to sleep twice over the past weeks. I think it’s courageous to admit it. Some days, being an entrepreneur sucks. "It’s all useless. You should quit." I could hear my inner voice being mean. This is not another success story. Here’s my truth: Some days, I'm tired. I'm scared. I'm overthinking everything. I’m not going to quit, but the struggle is real. Scrolling through social media, I find great tips and inspiration. But it also brings constant comparison. “Comparison says: Be like everyone else, but better,” wrote Brené Brown. The thing is, I don’t want to be like everyone else. I want to do things my way. Yet, sometimes I forget. This means: ➝ I need to fail ➝ I need to be patient ➝ I need to learn from my mistakes And it takes time! While I’m happy to fail and always looking to learn from anything, it’s patience I have trouble with. Maybe another thing I forgot is: “Slow and steady wins the race.” Each of our journeys is unique. We all create our own path. I know all of this, yet I forget sometimes. I’m sure I’m not alone. So let’s take a break and remind ourselves: We are enough. We are doing fine. We are doing the best we can. If you’re building your business your way too: congrats! It’s going to pay off, I’m certain of it. And while we’re working for it, we better help each other out. Let's remember: no one else can be a better version of us than us.

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Every investor is looking to make the best decision possible. And so far data as been the most reliable way of doing so. But despite many efforts to become a data driven investor (👋 if your part of this team, welcome to the club) it’s hard to become one especially in VC. Why ? In first place to be data driven you need … data.  And data is hard to find in VC. So you’ll need to build a dataset. But building a dataset to analyse a deal is difficult cause information you’re looking for are scarce and spread over the internet. And it’s also difficult to match data from different sources. So more than often you end up doing it by hand and it takes a lot of time. So in the end investors put data driven approach on hold because of unreliable, incomplete or inexistant dataset to start with. And this where Luphy can help you. On the past months, we have taken this challenge head-on. The data collection is now fully automated for each deal you upload it make data access and use seamless for everyone in your team. If curious to try it out, hit me with a dm. PS : here's a beautiful picture of James Simons who brought the data driven approach to another level for hedge funds. We're hoping to do the same for VCs !

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🚀 Did you know pivoting was the (accidental) secret sauce behind many startup successes? Sometimes pivoting can be a terrifying idea. But what actually gets these companies to pivot in the first place? 1️⃣ Learning from the Market: Initial ideas often don’t match market needs. Startups gather feedback, understand user pain points, and adapt their products accordingly. Dropbox, for instance, started as a simple file-sharing service and evolved based on user needs. 2️⃣ Staying Relevant: Market trends and technologies change rapidly. Startups that pivot can stay relevant by aligning with current demands. Instagram, originally a check-in app called Burbn, pivoted to photo-sharing when they saw where users were spending their time. 3️⃣ Unlocking Growth Potential: Sometimes, the original market is too small. Pivoting opens up new opportunities for growth and scalability. PayPal started as a security software before shifting to digital payments, discovering a much larger market. 4️⃣ Overcoming Challenges: Every startup faces obstacles. Successful ones use these challenges as opportunities to rethink and innovate. Twitter was initially a podcasting platform called Odeo, but when iTunes dominated the market, they pivoted to microblogging. 📈 Key Takeaways: - Listen to your users: They will guide you to what they really need. - Be adaptable: The ability to pivot is crucial to build something people want. - Stay persistent: Embrace changes and challenges as part of the journey.

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