Dennis Cinelli

Ever since we launched SHAKTI, every quarter we write a letter to our LPs = Each letter includes an update on the portfolios, the GP's (our) view on the zeitgeist, an interview with a portfolio CEO and an interview with a TITAN = So far, we have 16 such letters = it's been on our "to do" list to share these publicly (i am lazy) = then Google comes along to save lazy people like me (thank you NotebookLLM) = here's a 10 min podcast summarizing our journey since Dec/2020 with the 16 LP letters as source = if you wanted to know what we are about, this is a pretty good place to start = https://lnkd.in/db7K2TrT cc SHAKTI

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KNOW YOUR REAL BUSINESS ECONOMICS • GAAP Revenue • Cash Flow • Cash • Contribution Margin • CAC • CAC Payback FUNDRAISING: PRESENT & SUBSTANTIATE FINANCIALS • Investor needs to know what your forecasts are • They need to believe them David Weiden, Khosla Ventures

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In April, OpenAI Controller Sowmya Ranganathan walked me through how her accounting team leverages ChatGPT to revolutionize the close process. I instantly knew we needed to share her story with the broader finance community. Accuracy and process are core to accounting workflow, so it can be intimidating to stray from traditional approaches. In our webinar last week, Sowmya walked through some brilliant demos, illuminating how you can automate repetitive and time-consuming tasks with ease. I’d *highly* recommend watching a replay of our webinar if you weren’t able to join live – it’s linked in the comments. We’ve also distilled her advice into a how-to guide: https://lnkd.in/gbheYKf2 Here are some of the pro tips she shared: ⚫ Seek out ways to automate. When you’re repeating a task that takes more than a few minutes in Excel - or something you hate about the close process, rewire your brain to find a way to automate it. Those minutes quickly add up to streamline your day-to-day workflow. This works with the close process, but also many other projects in finance and beyond. ⚫ Be curious about code. While she’s not a trained programmer, Sowmya uses ChatGPT to create Python scripts to build pivot tables and parse through massive CSVs. Her team can categorize a full month of OpenAI’s Azure usage data 👀 in 10 seconds 👀, whereas before they’d have to manually process the data every few days to avoid hitting Excel’s row limits. ⚫ Train ChatGPT on your company’s specific guidelines. After Sowmya ran a prompt to recognize revenue from a transaction file, she asked ChatGPT to cross-check it against their audit firm’s ASC 606 guidelines, which she uploaded as a PDF. The result was nearly the same, but it added an extra step to protect against hallucinations. And, she always triple-checks the results. ⚫ Don’t fear the error message. Pre-ChatGPT, if she was working on an automation project and received a technical error message, she might have given up. Today, Sowmya dumps the message back into ChatGPT, where it can diagnose and resolve any issues. You can see this problem-solving in action during her demo! A big thank you to Sowmya for sharing this hands-on demo and giving finance leaders the confidence to test it out themselves. Now that you have inspiration, how will you use ChatGPT and AI to revolutionize operations at your company?

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Tech PE - SaaS & Revenue Growth The image below starts with the most important initial driver of a "virtuous growth cycle" and I totally agreed with Bain & Company: It's Lead Generation which comes first, at the top. --- I am reminded of a key insights in Jason M. Lemkin's book "From Impossible to Inevitable" that highlights the most important role in driving SaaS growth: Lead generation is the #1 driver of growth. Don't over-index on just the product, not your sales team - it’s leads that convert into the Opps/pipeline. If you don’t have leads, you won’t have sales. This underscores the importance of consistent and scalable lead generation as the foundation for any company's revenue growth, highlighting that even the best sales team or product can’t thrive without a steady flow of leads. Source- the image below is from the report from OPEXEngine by Bain & Company can be found in their post: https://lnkd.in/dBbHF2tz ---- #pe #privateequity #growth #saas #tech #finance #investing #business

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DeepCast shipped a number of really cool new features recently in advance of a broad outreach push to podcast listeners. One new feature is our new Daily DeepDigest tool that sends you a concise daily email including any new episodes from the trailing 24 hours from any podcasts you Subscribe to (on DeepCast). Think daily podcast cliff notes or podcast news ticker tape, with a hint of Morning Brew various brews or PitchBook News—it's increasing information throughput when you're pressed for time. And this feature is rapidly evolving to distill other key extractions from shows you're already interested in, but also exposing you to other shows you might be unfamiliar with that also have nuggets to share—and thus increasing your aperture yet still conscious of your time. Want to go deeper on any given episode? Click the episode detail and you're off to an episode on DeepCast, where you can subsequently read a longer form distillation of that episode or go straight to the source and listen to the episode. (And podcaster friends, these pages are definitely increasing indexing and thus Google entry points to your shows!) I'm loving this feature as a user, personally. Can't wait to see what others think! #BuildingInPublic #Podcasts #AllTheWorldsInformation #HowYouWantIt

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Quick follow up to my last post on the evolution of software business models (please excuse the rough sketch!) Traditional SaaS models have many advantages - they're sticky (often 3+ year committed deals in the enterprise & legal contracts), consistent, and easy(ish) for finance teams to forecast. Usage-based models typically don't have the same advantages, but have been the growth engine of a lot of the best technology over the last decade - from developer tools (many of which started as open-source), to fintech (just start taking payments with Stripe or Square), and much more. Why? they're self-serve and the product drives the stickiness. They get the party started and can often scale perpetually. They also often graduate into traditional enterprise contracts too. As mentioned in my last post, however, we're barely scratching the surface on how to adapt to the coming wave of productivity improvements with AI. AI is making software more effective and employees more productive. Seat based pricing isn't set up to share in value creation, especially when companies can avoid having to hire new folks / can reduce headcount. One obvious place we see the potential for usage-based models to complement traditional SaaS is overage. But the bigger impact (and multiplier) over the coming decade will be AI - agent-agent interaction and the agent economy are going to move at exponentially higher speeds and scale than human-software. We see the future of software as a combo of all the above. Outcomes powered by flexible business models. But the only way to solve this is clean, accurate, and real-time data. #software #ai

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Instacart is a market leader when it comes to leveraging AI tools to boost productivity at work. I had an amazing conversation with JJ Zhuang, Instacart’s Chief Architect, who has shepherded over 50 AI-driven initiatives to market across the org. We explored what catapulted Instacart to the forefront of AI integration, supporting radically diverse use cases across various functional areas. One striking insight (echoed by Ethan Mollick and others elsewhere) is that you often don't need specialized tools for specialized work. Frontier models like GPT-4 can seamlessly adapt to a wide range of functions and use cases. They're not just for engineers; they're incredibly versatile tools used by marketing, comms, and legal teams. From generating code to proofreading and ideation, GPT-4 empowers every department to leverage AI for enhanced productivity and innovation. By integrating LLM’s like GPT-4 into their workflows, teams can streamline processes, automate repetitive tasks, and unlock bandwidth for new creative possibilities. How can you harness the power of AI in your own work to boost productivity? Share your thoughts below 👇 Want to hear more insights from JJ? Check out the full podcast episode by clicking the link in the comments.

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https://lnkd.in/e-Cc-PhA Just wrapped up a case study highlighting some successful value creation work for a vertical software company. After a funding event, it can be tough for management teams to align on which initiatives to tackle first. Here are a few tips from my experience: 📈 Prioritize Compounding Benefits Start with initiatives that enable or build capabilities. These early projects are not the most glamorous. The long term value is the momentum they create and tone they set. They pave the way for bigger wins down the line. 🚧 Address Bottlenecks We identified and fixed a major technical bottleneck in the sales funnel. This gave us an immediate boost to revenue and win rates. The less obvious win was a finding that our marketing efforts were more effective than we thought. Many opportunities fitting the ideal customer profiles were getting stuck at the bottleneck! ✴ Find the Triple Word Score Initiatives Focus on initiatives that add value across multiple valuation categories like revenue, margins, and multiple expansion. My favorites are those that improve operating leverage and scalable unit economics. Operating leverage improves as each dollar of increased revenue earns a little more Operating Margin (EBITDA) over time. In the case study, I renegotiated two of the largest variable cost supplier contracts, leading to immediate improvements in unit contribution margins and setting the stage for increasing margins as revenue grew. This is a valuable function of a durable business model. Most teams agree on what needs to be done, but not always on the order. Choose initiatives that start building a solid foundation for future investments or the Quick Wins with high impact. A few good articles that touch on the technical concepts.. Healthtech: Show Your Magic | Andreessen Horowitz  https://lnkd.in/eGkDnkiG The Gross Margin Problem - Bottom Up by David Sacks https://lnkd.in/e9J2Eqaa

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Today, I was reminded of two remarkably prescient 1997 ACM, Association for Computing Machinery presentations: the first by Nathan Myhrvold and the second by Bran Ferran. If you are not a member of the ACM - I highly recommend joining. Nathan Myhrvold The future of software, the software industry, and Windows '47 https://lnkd.in/egMwYty Bran Ferran How IT will transform the experience of telling and listening to stories https://lnkd.in/gqF7C7TK

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WE DID IT! After 2 years of pushing through the biggest downturn in VC in decades, Matthew Stotts 🌐 and I made it to the finish line with Fund I! We couldn't have done this without One Small Planet (Will Peterffy and Jack Wielebinski 🙏), Regen Network and Regen Foundation (Austin Wade Smith Gregory Landua and Will Szal), and a dozen other family offices and angels who believed that we can build a nature-positive economy utilizing our eye for software and our history as founders from day 1 A shout out goes to all of our founders (only four announced today, but watch this space - there are multitudes!) who trusted us enough to give us a spot on their cap table for this 10-15 year journey. This is the best job in the world, and it's because we get to work with people like you who have weird ideas in the best possible way. Using Bitcoin as anchor base load to decarbonize residential housing in America's most expensive energy market? Make every complex supply chain legible to machines so we can find and eliminate deforestation in commodity supply chains? Build deeply liquid environmental asset markets to price ecosystem services, on a blockchain, that no one needs to know is a blockchain? I'm so excited to get to work on this stuff for the next 10-15 years minimum, and to see what we can accelerate with our tiny fund in the next 5-6 years as we approach 2030 Onward! https://lnkd.in/gy3B-DFe

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Employee Productivity is up, but what’s happening with Headcount Efficiency?!👇 ICONIQ Growth's latest report reveals a notable trend in the SaaS space: While employee productivity - reflected in the ARR per FTE benchmarks - has surged in recent years, headcount efficiency has actually declined. As you can see in the chart below, OpEx per FTE rose over the same period. What do you think is the reason for this? Temporary blip due to market conditions that growing AI adoption will eventually correct? Or will companies always find ways to absorb productivity gains, preventing significant profit boosts? #saas #startup #tech #kpi #benchmarks

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Today, GTMfund’s is excited to announce to launch of Operator, its first incubated company. Max Altschuler (founder of GTMfund) teamed up with co-founder Adam M. (design engineer and 0-1 builder) and co-founder Mark Kosoglow (Outreach employee #1 and former SVP of Global Sales) to create Operator.ai alongside an insanely talented team Pleasant Middelhof, Jeremy Jonas, Carl Gunderson. We've entered a period called “The Great Ignore”. Spam and irrelevant, poorly-automated outbound campaigns are running rampant.   Operator gives you an easy-to-use Growth Engineer that allows you to build and enrich lists with accurate data, and run experiments and queries using AI to generate highly targeted outreach.    Check out their website to get updates, early access, and see how they are taking the world back to 2 touches meant to attract buyers into conversations that convert, instead of 20 touches meant to make sure you hit your activity number: https://www.operator.ai/

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Hey everyone! Andrew Lambrecht & I have just started a podcast together where we chat about EVs & what's happening in the world of charging as we've experienced it. Please check it out on Spotify (https://lnkd.in/etgegd83) or Youtube (https://lnkd.in/eVauGsgf) and let us know your thoughts as well!

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This is fascinating. My two portfolio companies on the fastest path to Series A have kept the leanest teams. Both of them are lingering around cash flow positive on a monthly basis. One is growing gangbusters, one is growing nicely. Good data below to show that these activities are being rewarded. We're still in cockroach times. Also fwiw, I'm constantly amazed by and learning from Peter Walker. If you're interested in the data of venture funding (AND IF YOU'RE A FOUNDER, YOU SHOULD BE), then follow Peter.

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Our inaugural VC Fund Performance report has certainly got people talking (https://lnkd.in/ggv2TvuN)!  Highlights include:  Slow capital deployment: Funds in the 2022 vintage have deployed about 43% of their committed capital at the 24 month mark, the lowest share of any analyzed vintage. Prior vintages ranged from 47%-60% after 24 months. Declining graduation rates: 30.6% of companies that raised a seed round in Q1 2018 made it to Series A within two years. Only 15.4% of Q1 2022 seed startups did so in the same timeframe. Distribution back to LPs remains elusive: Less than 10% of 2021 funds have had any DPI after 3 years. Carta Fund Admin customers should have received expanded analysis in their inbox. Everyone else, out the report here: https://lnkd.in/g2N6tPU6   #startups #venturecapital #emergingmanager #fundperformance

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🏢 Big Moves in SF Commercial Real Estate! Intuit & Capital One 🏢 Two major financial firms are making strategic relocations within San Francisco: - Capital One is reducing its office space by two-thirds, moving from 201 3rd St. to 40,000 sq. ft. at 100 California St. This deal includes significant improvements to the new location, enhancing tenant experiences with new outdoor spaces and on-site amenities. - Intuit is downsizing from 200,000 sq. ft. at 22 4th St. to 36,500 sq. ft. at 505 Howard St. The move aims to leverage San Francisco's diverse talent pool while optimizing their workspace for future growth. These moves highlight the dynamic nature of SF's commercial real estate market and the need for adaptable, strategic office solutions. At Resource, we specialize in guiding companies through such transitions, ensuring seamless relocations and optimized space utilization. 🔗 Discover more about our tailored real estate services: yourresource.com #SFRealEstate #CommercialRealEstate #CapitalOne #Intuit #OfficeRelocation #RealEstateStrategy #ResourceCRE

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I think the most interesting data companies are super niche verticals. Go deep vertically before you go horizontal. Something random like- Rubber pricing and demand. Insights on the automotive industry have always been in high demand. Deep insights into the storage facility space. A market that has publicly traded companies or a futures contract is where I see the biggest upside. What are some of your favorite companies with deep sector or industry specific datasets. I think J.D. Power is interesting. Aggregate Intelligence, Inc. is another one with a bunch of super specific industry datasets.

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Interesting new surrvey about the VC industry by PitchBook: 13% of VC firms are not planning to raise a new fund and 27% of VC firms have been pushed further thier plans to raise a new fund. That means a 40% decline. No wonder that startups are haveing tough time to raise funds. See article below. https://lnkd.in/exYYyCPu

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