Venture Capital Insights

Founders are turning down millions in venture capital. Their reason? "I don't need the money. We're already profitable." 10 years ago, unthinkable. Today, common. The Information wrote an insightful piece on "Seed-strapping"—raise once, focus on profitability: → $3.7M revenue per employee (10X industry standard) → 80% lower development costs → 90% less capital to reach profitability The uncomfortable truth for VCs: → Companies need just one funding round → SAFEs never convert → Founders keep 70-80% ownership → The traditional model breaks For investors, survival requires reinvention. New Fund Economics: → Smaller funds with more concentrated bets → Lower management fees, higher carry → Faster distribution timelines → Many smaller wins vs. few unicorn exits New Deal Structures: → Revenue-based financing with capped returns → Dividend rights if companies don't raise again → Profit-sharing without requiring additional rounds New Value Proposition: → Capital efficiency expertise over growth-at-all-costs → Customer connections & distribution support → Operational support over financial engineering → Alternative liquidity paths beyond traditional exits The era of "We'll figure out profitability later" is over. What comes next? Imagine a VC landscape dominated by smaller, specialized firms helping founders build profitable businesses from day one. In this new world, the winners won't have the biggest funds—they'll understand AI has fundamentally changed capital efficiency. For founders: Why dilute when you can profit after one round? For investors: How do you add value when capital isn't the constraint? The answer determines who thrives—and who vanishes in 24 months.

Lack of transparency in VC puts first time founders at an unfair disadvantage What we do is not that complex, but there are plenty of concepts and terms you need to be familiar with so you can set yourself up for success This is particularly true when it comes to negotiating a term sheet To make things fairer, we've made our term sheet available for anybody to download and review We've also written a guide to take you through all the key terms and explain where tension is likely to arise between founder and fund You can access the term sheet directly below and the guide via the Content section of our website 'Term Sheet Transparency' Any questions? Just ask in the comments below #venturecapital #startups #fundraising #founders #entrepreneur #entrepreneurship #technology #innovation #business #ceo

Info Edge turned ₹3,950 crore into ₹36,850 crore through investments in 111 startups since 2007 - a mind boggling 36% IRR But, 90% of this value (₹31,500 crore) comes from 2 companies - PB FinTech (₹8,500 crore) & Eternal (₹23,000 crore) which were investments made in 2008 & 2010. When you remove these outliers, the remaining ₹2,875 crore invested by IE is marked at approx. ₹5,350 crore (a little less than x2) Mr Bikhchandani wrote an excellent shareholder letter which shared 3 lessons about startup investing: 1️⃣ The Power Law of Returns - For IE: the outliers are Zomato & Policybazaar - which account for 90% of the FMV. - Btw, the next 100 investments contribute 10% of FMV; where again 5-6 companies account for 50% of that value. - The Power Law is fractal in nature 2️⃣ Vintage Matters - Children become Adults over time - It took Zomato 7 years to add $1bn in market cap & it added a further $20bn in market cap over the next 7 years - IRRs in venture are back dated because markups happen late in the lifecycle when a company truly breaks out 3️⃣ Staying Power is a Superpower - Imagine if IE sold both Zomato & Policybazaar during the pre & post IPO period (like any other VC) - They would have missed out on ₹10,500 crore of post listing gains (approx. 27.5% of overall portfolio value) 🤯 This would have dragged the IRR from 36% to the mid 20s (because, this is a Power Law business 😉) Mr Bikhchandani’s short 8 page shareholder letter summarizes 20+ years of learnings from investing in private markets - it is a MUST read for any fund manager, investor & shareholder. He himself admits that it was only 12 years after investing in Zomato, in 2019, that IE had the confidence to invest the next ₹2,000 crore of capital! #startups #india #venturecapitall

As investors, we know that risk is inherent. But you can 𝐝𝐞-𝐫𝐢𝐬𝐤 your startup investments. How? By adjusting your support based on each startup stage’s risks. This risk chart by Abhishek Maran is great. But here’s how I’d change it from an investor’s POV 👇 In pre-seed, the risk lies mostly in 𝐯𝐚𝐥𝐢𝐝𝐚𝐭𝐢𝐨𝐧. > Does it solve a real problem in the market? In seed, the risk lies mostly in 𝐭𝐞𝐚𝐦 𝐜𝐨𝐦𝐩𝐞𝐭𝐞𝐧𝐜𝐲. > Do they have the skills to effectively iterate and improve? In Series A, the risk lies mostly in 𝐝𝐞𝐬𝐢𝐫𝐚𝐛𝐢𝐥𝐢𝐭𝐲 (PMF). > Are customers really interested and willing to pay? In Series B, the risk lies mostly in 𝐞𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧. > Are they able to handle the complexities of scaling? In Series C+, the risk lies mostly in the right 𝐞𝐱𝐢𝐭 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲. > Are they on track and prepared for an attractive exit? There are risks that are always there, regardless of a company’s maturity: ➡ Market Disruption ➡ Competition ➡ Culture 💬 My tip for investors: Be able to provide the network, resources, mentorship, and coaching that startups need to overcome the inevitable challenges and risks. Because at the end of the day, THEIR success is YOUR success. #investing #venturecapital #strategy #innovation #technology 🔔 Curated content for investors - trends, insights, and resources.

8 years in: are small VC funds or big(ger) VC funds performing better? Drum roll...it's smaller funds. But there's so much to discuss beyond the headline TVPI (Total Value to Paid-In Capital) multiples. Let's dig into to data first then implications. 𝗗𝗮𝘁𝗮 𝗘𝘅𝗽𝗹𝗮𝗶𝗻𝗲𝗿 • Net TVPI figures laid out in percentiles (25th, 50th, 75th, 90th, and 95th). • Data is a snapshot of performance as of Q1 2025. 𝗗𝗮𝘁𝗮 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀 𝗳𝗼𝗿 𝗡𝗲𝘁 𝗧𝗩𝗣𝗜 • Funds with $1M-$10M to invest have higher marks at the 90th and 95th percentiles than any other fund size group.    • Between $10M-$25M and $25M-$100M, performance varies. Top decile marks are actually higher at the bigger tier between the two, but it's competitive.    • Funds with over $100M typically have lower top decile marks. The obvious question is "why don't LPs fund more tiny funds, they outperform". Well, it's pretty tough to invest $100M into 10 funds of $10M each (not least because no one would want to be the ONLY LP in a fund). And of course there are many more $10M funds, so choosing a top decile manager is maybe even harder here! Beyond that, I think it's under-discussed that emerging manager funds are often in competition with one another. If an LP has $5M to give to the emerging manager space, choosing between a $25M fund and a $50M fund is tricky - and may have very little to do with fund size. The classic dilemma on fundraising: do we spend time trying to convince an LP to focus on emerging managers AND THEN pick us, or do we narrowly target LPs who are already bought into the emerging manager thesis? Two final notes: 1) TVPI is not DPI and 8 years is not 12 years. More life to live in this analysis. 2) 75th percentile (aka top quartile) being below 3x across fund sizes after 8 years is...not great. Share with your favorite GP 🙏 #TVPI #venturefunds #venturecapital #smallfunds  

I missed a $40 billion opportunity because I ignored a simple truth: everything comes down to the founder. This is my biggest lesson in 4 years angel investing. *Missing a $40 Billion Opportunity* Two years ago, I had the opportunity to invest in the seed round of Figure, the robotics startup. I found the company really intriguing. I couldn’t stop thinking about it and telling folks about their cool androids. I also knew the founder had started a billion dollar company before (Archer Aviation). But Figure’s valuation was high. I was concerned there wouldn’t be enough upside. And it was robotics, something I don’t know much about. Full of doubts and second guesses, I passed on the investment. Fast forward two years, and Figure is valued at $40 billion. I missed one of the biggest opportunities of my career. All that stuff I was worried about? Turned out none of it mattered. All that mattered was that Brett Adcock is exceptional. *How I Invest Now* When I looked at decks a few years ago, I’d flip straight to traction. Now, I flip straight to the team slide. I scrutinize the founders’ backgrounds. Have they done anything exceptional in the past? Startups are a lot like grade school. What’s the best predictor of who will get A’s this year? Who got A’s last year! Successful people keep succeeding. I’m not saying that only founders with incredible track records are worth investing in. Nobody knew who Brian Chesky and Joe Gebbia were when they started Airbnb. I’m excited about investing in the unknown founders too. But founders with a strong track record go to the top of my list. *Wrap-Up* It’s so easy to get lost in metrics and analysis. CAC, ROIC, TAM, you name it. Here’s my best advice to new angels: you must know the details, but you don’t want to get lost in them. Focus on the founder above all else. In the end, every company boils down to a human being trying to achieve a goal. If that human is exceptional, nothing else matters.

Smaller VC funds could be the future of VC in Southeast Asia. The push for ever-larger funds sometimes overlook the reality: Fund size = strategy Smaller ‘Capital Mavericks,’ by design, operate differently.  They may be more sustainable / better suited for SEA’s unique dynamics. Here’s why: — 🚀 1/ Precision Beats Volume Here SEA isn’t one market. You can’t scale from one country alone. Each market requires a different playbook. (E.g. TikTok Shop thrives in TH and VN, while Shopee faces hurdles. Startups succeeding in SG often struggle to scale across.) This complexity kills the power-law model: ❌ Spray-and-pray fails. Less outsized returners to offset losses. ✅ Focused, tight portfolios win. Pick winners, actively help them grow. Smaller funds can: ↳ Build expertise in niche sectors with high potential. ↳ Help founders navigate complex, multi-market GTMs to drive growth. ↳ Achieve higher win ratios through hands-on support. Funds with a focused portfolio can channel resources to help founders target multiple market at one go leading to higher win ratio. — 🚀 2/ Capital Efficiency Isn’t Optional SEA’s shallow exit markets mean power-law outcomes are rare. Most returns come from capital-efficient, sub-$500M exits—NOT unicorns. Large funds often ignore these wins, due to fee-driven models. Smaller funds are built for SEA’s reality: ✅ Capital-efficient investments aligning with the region’s exit profile. ✅ Tight portfolios, high touch—picking better, not betting more. ✅ Less reliant on management fees. Returns drive decisions. Stop trying to find 100x outcomes—Aim for the right outcomes for the market. — 🚀 3/ Founders Need Help, Not Pressure SEA’s complexity means founders need more than just capital. They need partners who help them win across markets, not push them into high-burn cycles. But large funds, focused on management fees, often drive founders into: ❌ Growth-at-all-costs cycles to justify large cheque sizes. ❌ Unrealistic scaling targets misaligned with market realities. Smaller, carry-focused funds align with founders because: ✅ Success is tied to carry, not management fees. ✅ Fewer companies to manage, more time for founders. ✅ Focus on niche sectors builds deep expertise helping founders navigate GTM. In short, smaller funds are partners, not pressure points. — SEA isn’t Silicon Valley.  It needs a playbook built for its reality. For LPs, smaller funds offer: ↳ Fit-for-market strategies aligned with SEA’s real opportunities. ↳ Lower risk profiles without relying on unicorn outcomes. For founders, they need: ↳ Investors who roll up their sleeves, not just write cheques. ↳ Strategic support across fragmented markets. Right-sized funds and strategies. + Real alignment with founders. Capital Mavericks will forge that path.

There’s a painful gap between a VC saying “this is interesting” during an initial meeting and actually wiring the money. Founders who close rounds in this climate know that a great story is just the beginning - the real test comes later during due diligence. From where I sit as an investor, I see it happen every week: a fantastic pitch earns a follow-up meeting, but the momentum dies during the diligence process. That’s because in a cautious market, investors aren't just betting on your vision / pitch / charisma / top-line metrics. They're betting on your execution engine. How you respond to their digging reveals more than any slide ever could. Here's a few operational habits I see from founders who navigate diligence successfully and close their round efficiently: ✔️ They Run a "Glass Box" Operation. Instead of scrambling to assemble a data room, they simply invite investors into their existing company 'brain' - usually a clean, continuously updated space in Notion, Coda or DocSend. It holds their live metrics, customer notes, and experiment results. This sends a clear signal: data isn't something you prepare for a pitch; it's the language you speak every day. ✔️ They Lead with Candor. The old way was to have a curated list of your happiest customers ready for reference calls. The new way is to get ahead of the request entirely. The most confident founders proactively share not just their wins, but their learnings from customers that didn't convert or churned. This confidence in your own process turns an interrogation into a partnership. ✔️ The Team's Cohesion Shines Under Pressure. Every question from an investor, no matter how small, is a test of your team's alignment. When you're asked for a specific data cut, a fast and collaborative response from your team is incredibly powerful. It demonstrates a level of operational harmony that no amount of pitching can fake. Nailing your pitch and articulating your vision are extremely important but your process is ultimately what gets investors to write the check. The fundraising game today is won in the trenches of the details. 🙌🏼 #startups #fundraising #everywhereVC

📊 I'm excited to release our 2024 report - diving into the world of Corporate Venture Capital. 🚀 With 1 in 4 deals now including a CVC, there is surprisingly very little information for founders on what CVCs look for, the benefits & disadvantages and typical deal terms of receiving investment from corporates. ✅ I hope that our freely downloadable report, with insights from 100+ global CVC investors with over £20 billion in AUM, can change that. Some of the headline findings: 1️⃣ CVCs are continuing to invest in tech, with the majority (90%) investing the same amount or more in early-stage companies over the next three years. Investing directly into startups was the most common type of investment in tech (95%), Series A (90%) the most common stage and B2B & AI the most common sectors (c. 40%). 2️⃣ Founders should consider raising from a CVC for market validation, building a strategic partner, accessing resources, and identifying exit opportunities. However, they should be aware of interest misalignment, a longer investment timeframe, culture incompatibility and be mindful of the terms requested by CVCs. 3️⃣ For CVCs, investing in startups can provide a competitive edge, improve culture, provide market insights and generate returns. 4️⃣ A CVC’s appetite to invest in startups is driven by, first and foremost, alignment with the investment thesis, followed by the alignment with their parent company’s focus, returns, traction and market intelligence. Market intelligence and financial returns are the most important criteria when selecting funds to invest in. In return, internal business opportunities is the most important value-add to founders. 5️⃣  There has been a notable increase in CVCs participating in deals, from 1 in 10 in 2010 to 1 in 4 in 2024, driven by the maturity of the market and the increased appetite from corporates to innovate. 6️⃣ When it comes to investing in venture capital funds, 1 in 3 CVCs invest in VCs or VC FoFs, most prefer specialist over agnostic funds and half are interested in emerging managers. Thank you to our partners Love Ventures, and to the input from Sheridans, FieldHouse Associates and Dealroom.co. You can find the full report attached below and on the Mountside Ventures Medium page.

Flo Health is the world's first femtech unicorn (yay) but it's also founded and funded by men (hmm) It's great that women's health is gaining more recognition, given the vast inequality in funding, research, and focus... BUT It also exposes a huge problem with the startup ecosystem. → Just 2% of global VC funding goes to women (WEF) → Women's presence on pitches is *neutral at best* and becomes negative when women don't embody typically female traits (Harvard) → Investors prefer pitches presented by men - when presented with two identical pitches, 68% funded the startup pitched by a man and 31% funded the exact same startup pitched by a woman (Harvard) → 83% of investment committees have no female members (British Business Bank) Women are discriminated against at all stages of the investment process. → Women are asked more negative questions around risk and worst-case scenarios, whereas men are asked about opportunity and opportunity (Harvard) → Women have to fight against preconceptions, we are judged more frequently, and held to higher standards (Yale) Ultimately, people with the most privilege raise the most money, and I count myself in that bucket as I am a white, privately educated female. → Just 0.5% of funding goes to black founders (WEF) → 79% of VC Seed funding for diverse founders (which is a tiny amount) goes to white women (BBG Ventures) There is SO much inequality in the startup world, and it's talked about but never taken seriously. Instead, female founders are assumed to be running businesses that aren't VC-backable, or that there just aren't enough of us. This is an uncomfortable topic, but the only way we can improve this system is to educate people about the huge inequality that exists in a sector awash with bonkers amounts of capital. Flexa #Startups #Fundraising #Inequality