Jack Buendorf

A new era of deep tech has emerged. First time funds will raise “unheard of” amounts of capital to fuel next gen deep tech startups - producing outsized, superior returns for LP’s compared to the rest. Prudent investors will act on this data and shift investment strategy as LP’s or risk being left behind savvy wealth managers and CIO’s / FO’s who saw this trend begin 4 years ago.

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Interesting data and good work from Carta in their inaugural VC fund performance report analyzing benchmarks for more than 1800 funds across six recent vintages - https://lnkd.in/e5R_dhXp Take a look at the pace of investments. As expected, capital deployment has slowed since the 2020 peak, with 2022 funds only using 43% of their capital after 24 months, down from 60% in 2020. This trend seems broadly consistent across private company and fund investing, with GPs and their LPs being more cautious and selective with capital allocation. Raising capital is tough today. Full stop. It's easy to focus on that, but I'd encourage us all to instead consider and focus on what is less talked about - that this cautious approach has created a large amount of available capital aka "dry powder," dedicated and ready to support special founders. The best founders are aware of private market dynamics, which impact the time needed to raise rounds and the milestones they must hit to successfully do that, but their primary focus is always the mission and the customers they serve. They are committed to building products to solve their customers' problems regardless of what us investors think. Building generational companies is never easy, but many have been and will continue to be built in tough markets. I try to take a similar approach in supporting founders. That doesn't mean ignoring market conditions, which can greatly impact my investment decisions and outcomes, but like focused founders, I know it makes more sense to dedicate my limited daily energy to what I can control. That means finding and supporting founders who are transforming or creating markets and doing everything I can to help them win, no matter what the market is doing. I hope to collaborate with many doing the same. Have a great week and see you out there! Note: These thoughts and opinions are solely mine and and mine alone. They do not reflect and are not associated with any company I am part of.

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At Kearny Jackson, founders constantly ask us what we look for in founding teams. I’m sharing the rough framework that my partner, Sriram Krishnan, outlined to assess founders as a pre-seed/seed investor. This is also how I judge whether someone is “biased for action” or “biased for thought.” I get along well with the former and not the latter, but that’s a story for another day. Level 1 - Speed of communicating Whether by text or email. Quick turnarounds, “acknowledged receipt” types of folks. Not being speedy is not necessarily a bad sign; it can also mean they’re busy or don’t care about you or your email. Usually “closes the loop” and, most importantly, tries to leave no email unresponded. Level 2 - Speed of rewriting deck or memo Founders who pitch one version of the deck and share an updated version after the pitch the same day with slides that address the questions asked during the pitch. Or founders that iterate on positioning and strategy quickly based on input and ship a new version of a deck within days. Some founders use a static deck when presenting (i.e. the same deck for weeks on end), but some are more dynamic and change/pivot/edit when new information or tactics come to light. Level 3 - Speed of talking to or onboarding design partners Founders who not only speak to 50-70 potential prospects within a short time frame but also ones who onboard X design partners very quickly. I’ve seen some founders pitch an idea in week one and sign up four design partners in week two. That’s pretty impressive regardless of what is being built and shows they can execute. Level 4 - Speed of shipping new code, new features, new products, or new pivots This is the holy grail. This is what every early-stage investor means by execution velocity. In the world of early-stage startups, the big fish don’t eat the small fish. The fast ones eat the slow ones. And how quickly you ship code represents how efficient or productive you can be in a resource-constraint environment. All investors would preferably want to see how founders execute with code, but (A) founders don’t always have product during the seed/pre-seed rounds, eg. figma designs, mock-ups, ideas, etc (B) so investors have to rely on other signals to decipher whether you can execute on 4 so levels 123 above will hopefully inform them on that.

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Summary: Industry Ventures has raised a $900 million early-stage hybrid fund for investing in emerging managers and directly backing growth-stage companies. This is their seventh hybrid fund and is larger than their previous one. The fund will be split between backing VC funds, direct investments, and acquiring stakes from emerging managers. Key takeaways: Smaller, newer funds are finding it more difficult to raise capital, but this fund from Industry Ventures offers hope for emerging managers. The fund will be split between various investments, including backing VC funds and buying secondary interests. Industry Ventures may have an advantage due to their ability to invest in both emerging and more established managers. Counter arguments: Some may argue that it is still difficult for emerging managers to raise funds. The success of Industry Ventures may not be indicative of the overall climate for emerging managers. #venturecapital #venture #startups #fundraising

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Seattle's startup scene is growing, but it’s clear we have some work to do. That was a main takeaway from our panel discussion last week featuring venture capitalists from top-tier firms including Brentt Baltimore of Greycroft, Victoria Treyger of Felicis, and Sunil Nagaraj of Ubiquity Ventures, moderated by Kirby Winfield. Their goal: analyze Seattle's startup landscape from an outsider’s perspective with active Seattle investments. They see a city rich in technical talent but with several missing pieces. Go-to-market strategies often lag behind technical capabilities; capital is available, but frequently from outside the region; and stronger community cohesion is needed to bridge incumbent tech leaders with founder types. I transcribed and edited our panel last week "Valley VCs 💗 Seattle Startups." https://lnkd.in/ggchXW4B

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Great analysis by the AGC team on SaaS public company comps. It's worth a look as we recalibrate mid-way through earnings season. The analysis aligns with the broader Nasdaq equity performance, where the Mag 7 (or fab 4 now :-)) have shown more resilience than the rest of the market. #AGC #SaaS #EarningsSeason #Nasdaq #EquityPerformance

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🧬 This week's Austin Bio & Health Roundup features nearly $200M in funding & new capital, M&A, more infrastructure coming, & hopefully an opening of the Texas Bio & Health IPO window🧬 💰 Funding Function Health has closed its Series A, securing $53M in total funding. Function’s platform offers 100+ tests for $499 per year, focusing on prevention and empowerment. The round was led by a16z Bio + Health and includes several celebrity investors. Congrats to Mark Hyman, MD, Pranitha Patil, Jonathan Swerdlin, Mike Nemke, Seth Weisfeld, and Dan Swerdlin. Sensi.AI raised a $31M Series B led by Insight Partners and Zeev Ventures to enhance its 24/7 monitoring technology for seniors and home care. Way to go Romi Gubes and the entire team! Ironspring Ventures raised $100M for their second fund, focusing on “manufacturing, construction, transportation, and energy.” Exciting times for Ty Findley, Adam Bridgman, Peter J. Holt, and the expanding Ironspring team! Now, why include this in a Bio & Health newsletter? I believe there will be a value migration from drugs, devices, and diagnostics to the bio innovation tech stack itself. One key area of that stack is biomanufacturing. As new modalities like cell and gene therapy rise, the challenge of scaling these therapies presents a significant opportunity for innovation. While as far as I know Ironspring hasn't invested in this subsector yet, I look forward to seeing what they do with Fund 2. 🤝 M&A and Partnerships Significo, a software development that builds healthcare apps and solutions, acquired Bunch, an AI leadership coach app. Congrats to Rick McCartney and team! 🚀Launches, Expansions, and Milestones BrainCheck, a cognitive assessment software platform, announced their adoption by the Physicians Hearing Network (PHN), bringing insights to 270 members across 12 states.  Keep up the momentum Kim Rodriguez and team! 🏗️ Infrastructure Texas State University is partnering with Concept Companies to build a life sciences incubator at their round rock campus. The incubator will have labs, offices, admin support, and collaboration spaces. The teams hope to complete construction by the end of 2025. DES Architects + Engineers opened a new office in Austin, aiming to bring their expertise to the city’s burgeoning life science market. Welcome Kevin D. Norman, Tracy Wong, and the rest of the DES team! 🚩 Texas Bio Triangle Fort Worth-based biopharma company Actuate Therapeutics, Inc. is preparing for an IPO, targeting a raise of about $50M. What’s Next? #AustinNext #LifeSciences #Healthcare #Biotechnology

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I love YC Demo Day season. It’s an insane concentration of driven founders building something they deeply believe in at the frontier of tech. I know it's more trendy for VCs to complain about YC. But I believe Garry Tan when he says 5-10% of companies become worth a billion dollars. Maven’s hit rate from YC is even higher: 16% have had $B+ exits, and we’re trending toward a 40% graduation rate from Seed to Unicorn with investments we’ve made alongside YC. Since Maven’s founding in 2013, we’ve funded 12 YC startups out of the 66 companies we’ve invested in. Here are a few: Cruise: acquired by GM for $1B+ Embark: $4B SPAC, acquired by Applied Intuition Chariot: acquired by Ford before Series A May Mobility: raised $300M+ in follow on funding, including from Toyota Carrot Fertility: raised $100M+ in follow on funding, including from CRV and USVP Daybreak Health: Series A from Lightspeed, Series B from USV Moment Robotics: acquired by Cruise founder Kyle Vogt’s new company, The Bot Co (Maven is an investor) Our strategy differs from other YC investors. Many funds build a YC “index fund”, investing in many startups per batch. It’s not a bad move. But we focus on concentration, meeting all the companies in our thesis area and investing in one or two. Gratefully, I think every company from the list above can point to Maven as one of their most trusted partners that made a difference: intros to customers, closing follow-on funding from top VCs, connecting key hires, and offering genuine care and advice in both the best and toughest of moments. What are we looking for in a YC investment? 1) Team - a technical product team with startup DNA and hustle that can achieve a bold vision. Brilliant, determined founders no one would bet against who are ambitious enough to build an iconic company. 2) Vision worth fighting for - what are you bringing into the world that is worth all the time, effort and money required for success? Why aren’t existing solutions good enough? Are we proud to help bring this idea to the world? 3) Massive market - because of the valuation premium YC demands, even a $B outcome may not return today’s average Seed fund. Honestly, that math sucks. In order to pay the premium, we have to believe that if we’re right, we’ll be wildly successful. 4) Consumer trend - Maven invests in tech companies addressing emerging consumer trends. Even if some investments are B2B or B2B2C, they are always grounded in a consumer insight: autonomous vehicles in 2014, fertility care in 2017, mental health in 2020. Today, we’re looking at consumer applications of AI and frontier consumer health. Many successful companies we fund are outside of YC as well – like Zoom, Hello Heart, Epic!, Class, Wildtype. So we match YC’s Unicorn % across the rest of our portfolio, too 💪 YC founders in consumer tech and digital health: if you want to build an iconic company that delivers a positive impact for millions of consumers - I can’t wait to talk to you!

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Nearly a year ago I wrote this post on seed extensions - why they are so prevalent and some best practices in raising one. Reflecting on the present, this still rings so true. While the start to 2024 has been more promising, the clouds haven't fully parted yet. We're seeing the bar for Series A metrics continue to be higher still (for example, revenue targets north of $2M ARR). Here are my tips for raising a strong seed extension from my learnings at Bread and Butter Ventures: https://lnkd.in/g4vEd-Pe #earlystage #venturecapital #seedextension

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