I've tweeted in the past on the importance of writing
I started writing publicly (mainly about venture 7 years ago).
Looking back, it’s one of the most fulfilling things that I’ve ever done.
Here are some of the things I’ve learned:
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1/ You will more than likely be terrible at it initially. This was true for me for a long while (and occasionally still). Keep at it though, as it will get easier. Muscle memory takes time, but is worth it.
2/ It will take some time to find your voice and land on a consistent style; experiment often in the early days until you land on something that is natural and authentic to you.
3/ Even as you improve, you’ll realize that not every post or writing will resonate with the desired effect. Sometimes the posts you are most proud of get the least interest or feedback. Don’t be discouraged.
4/Writing forces clarity of thought and requires you to confront your own beliefs like nothing else; even more so when you know it will be consumed publicly.
5/You will write many posts that you scrap after writing them (I have 50+). Sometime it’s because what you had in your head doesn’t translate well to writing or that you found yourself losing conviction in your thought during the writing progress. This is actually healthy.
6/Initially, you’ll dread feedback from those that don’t agree with you. Over time, if you have the right mindset, you’ll welcome feedback from others as an opportunity to learn, and perhaps reveal your own flawed biases. Leverage the power of audience to learn through writing.
7/ Be consistent with frequency of writing. I’ll help create discipline & keeps your skills sharp and relevant, while helping you build an audience. This is one of the hardest things to do.
8/Writers block will happen. There are posts that will freely flow and others that are important that take days to write and re-write. Take a break when you have a complete block. It’ll come back.
9/ Stay authentic. Don’t try and completely emulate someone else’s writing style. You’ll just be a worse version of them; be the best version of yourself. Pick something you’re passionate about.
10/ Effective writing will change your entire career arc. But you have continue to tune it. Don't underestimate the impact.
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A Data driven thread on the state of VC today, which we characterize as a "Tale of Two Cities"
So much data seemingly conflicts of whether things are "back" or whether things are dire (Hint: It's both, but with qualifiers).
It's a long thread, but packed with data
🧵
1/ Let's first look what we saw during the high times of 2011-2021 with funds/companies.
SaaS Multiples go to 4x the 20 year average!
2/Private multiples were even worse, as investors realized there was always a willing buyer downstream (private capital or public markets). Easy to arbitrage, especially when multiples focused on revenues, and growth at all costs could be accomplished thru capital.
With insitutional LPs pulling back, global family offices have been a focus for fund managers raising capital.
There are few things to keep in mind with these groups (from my experience working with 250+ families): A short🧵
1) First, there are clear reasons why FOs have been a target. According to Goldman, 55% of FOs invest in venture funds & 85% do some time of venture investing
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2) This is likely to grow as FOs are generally speaking (particularly sub-$500MM) underallocated to alternatives, especially VC. With over 10,000 FOs globally, there is a huge market, and one that easily will play a even more significant role in funding within 5-10 years.
1/Common perception of down rounds and valuations being cut is a negative signal for the company and that sets it on an irrecoverable path toward being a large, durable company.
It's not.
2/ Unfortunately over the years, down roads and valuation cuts have been stigmatized to the point they are avoided at all costs due to the view they signal some failure. Destigmatizing this is healthy.
3/ Nearly every great tech company has gone through valuation reductions in their stock, either in the private market (i.e. remember that Facebook had a down round post the Microsoft round) or the public markets when market caps change.
1/Now that the SVB auction is live, know that we believe them to be a very attractive purchase given relationships and core business.
I expect that both banks and private capital will bid and there will be a lot of bids
2/ To make it work (as it will be at a discount), their will have to be some assistance to cover the asset/liability mismatch when the purchase price discount is accounted for
3/ since we wont know until the bid is announced, hard to know what that number will be (20b+?), but im very optomistic that it will happen despite the political distaste of tech - we all know svb collapse isnt just about tech bros, but doubt thats full appreciated by admin
1/This will be a very critical day for the banking industry. Yellen was quoted on making sure depositors are taken care of. There are several options. Some general thoughts before I have to go offline for most of today
2/ First, the assets SVB has (Loans and security) pen out to nearly a full recovery of funds if liquidated. As mentioned prior, it's a time issue that is most concerning. Because of this, the deposits will be an interesting liability to buy for private capital (hedge or other)
3) Given how private capital works of course, this would likely be at a 20-40% discount to the level of deposits in receivership. However, given (outside of a bailout) is on the table, perhaps some govt intervention bridges the gap if this happens.