Thought Leadership Threads

In the world of Venture Capital and Startups, there's an unhealthy obsession with “cycles” that's about as useful as a chocolate teapot. Investors and Founders often behave like amateur meteorologists, constantly checking which way the wind is blowing and panicking at the first sign of a storm.
‍

The truth is that if you're aiming to build a company that'll still be standing decades from now, worrying about whether we're in a bull or bear market right now is like fretting over a pebble when you're climbing Everest.

‍

The allure of the Startup world is undeniable. The potential for explosive growth, the thrill of innovation, and the chance to change the world fuel Founders.

‍

However, the road from a bright idea to a sustainable business is riddled with complexities. Getting a startup to "work" isn't simply about doing one thing well. Most startups are extremely complex and require many interconnected parts to all function in concert.

Landing The Plane: A Necessary Choice For Many Startups
‍

How many Founders does it take to land a plane? None, they'll just pivot to a helicopter ride-sharing service.

There’s a saying that first time Founders focus on product and repeat Founders focus on distribution.
‍

The lesson that’s been learned by repeat Founders is simple:
‍

The top reason startups fail is due to an inability to scale efficiently.

It's been a tough funding environment for the past 2 years, but even in this brutal environment great startups have been able to successfully raise the capital they need.

And even for the best startups, the fundraising process proves to be exhausting and time consuming. So once a raise is "done and dusted" there's always an amazing feeling of relief.
‍

But what happens "Day 1" after a raise? Here are a few thoughts for Founders and VCs about shifting from a “need to raise” to a “need to prove” mindset.

‍

There’s a lot of mis-information being shared about VC performance and how it translates into LP returns.
‍

There’s also a lack of understanding about how the VC ecosystem broke the LP ecosystem over the past few years and why this matters A LOT.
‍

Here’s what’s going on:🧵👇

‍

VCs didn’t know what fintech was until giants emerged like Stripe, Credit Karma and NuBank.

‍

Then every VC wanted fintech exposure. But these “fintech tourists” have exited the building.

‍

What follows is advice 8 VCs who stayed the course are giving their fintech companies.🧵👇

The biggest fallacy in the Startup world is to believe that the entry price for a great investment is irrelevant.

‍

While great investments generate great returns, being indifferent to price is a function of sloppy thinking.

‍

A useful mental model that great Investors use:🧵👇

‍

There’s a major structural flaw in how the VC ecosystem works that we don’t talk about enough.

‍

It’s a flaw that creates confusion and bad advice for Founders.

‍

And it’s a flaw that makes no sense when you dissect it. 🧵👇

‍