1/6: It seems to be a trend that’s hit peak levels during the pandemic, but people in the #startup ecosystem are throwing themselves into their jobs to the detriment of everything else in their lives. It reminds me of a funny story. Image
2/6: One day, a startup developer was walking down a road when a frog crossed his path. The frog hopped around to get his attention. The developer stopped out of curiosity and was amazed when the frog spoke. "If you kiss me, I will turn into a beautiful princess."
3/6: The developer picked up the frog and placed it in his pocket. The frog was confused and assumed the message wasn’t heard. So the frog went one step further. "If you kiss me, I’ll turn into a beautiful princess and we can go out on the town and have fun together.”
4/6: The developer took the frog from his pocket, smiled at it, then put it back into his pocket. The frog had no idea what was happening and stepped it up again. "If you kiss me and turn me back into a beautiful princess, I will stay with you forever!"
5/6: The developer took the frog from his pocket, smiled, and put it back. Finally, the frog cried, "What’s the matter? I told you that I’m a beautiful princess and if you kiss me we’ll go out on the town, have fun, and I’ll stay with you forever!”
6/6: The developer took the frog from his pocket and said, "Look, I’m a developer and have some serious deadlines to hit. I have no time for a girlfriend, but I have to admit a talking frog is cool!"

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More from @fintechjunkie

19 Feb
1/19: I asked a number of institutional LPs that invest in VC funds what they thought about the recent rise in exit valuations and if the resulting VC results were going to impact their view of managers and allocations.

You might be surprised about what they said! Unpacked: Image
2/19: Theme #1: A significant number of VC funds are posting better than expected returns driven partially by companies in their portfolios going public in today’s crazy environment. The LPs have an interesting view of what this means/how it impacts their view of specific VCs.
3/19: Many funds that were forecasted to deliver 1.5X MOIC are going to end up as 3X+ MOIC funds due to today’s late stage private and public market valuations. They love the returns but care about how they were generated as much as the actual outcome.
Read 20 tweets
15 Feb
1/25: It’s been 6-months since I posted a thread about the trend of early stage companies raising of 2-3 back-to-back rounds with minimal progress in-between. I asked some amazing VCs whether or not anything has changed since. They think it’s gotten worse. Their thoughts:
2/25: We still have the conversation with Founders every few weeks if not more often: “How much can you learn how quickly for how much money?” This is even true for first equity rounds which are the bigger problem for us right now. (@iamjakestream)
3/25: The why: Many large VCs are incented to put money to work because in they’re playing an AUM game and need to show their LPs they have access to all the “hot companies”. (@iamjakestream)
Read 25 tweets
9 Feb
1/16: One business model I talk about frequently with Founders is underbuilding their software as a strategy.

It’s a really powerful concept that can help a product stand out in a crowded market and turbo-charge growth. Unpacked 👇:
2/16: It’s difficult to deny that just about everyone is a user of software on a daily basis. Phones and Computers are just Operating Systems + Pre-Loaded Apps + Downloaded Apps. Apps include streaming services, browsers, spreadsheets and POS software. The list goes on and on.
3/16: But ask yourself this: How many functions do you typically use in the software/apps that you interact with most? Streaming services: Search, create playlists, play. POS software: Add item descriptions and pricing, ring up orders, view reports.
Read 16 tweets
2 Feb
1/23: It’s widely believed that “grit” is one of the most important characteristics of highly successful people. I have an emerging (and controversial view) that the YOLO investing behavior that we’re seeing is directly attributable to a societal reduction in grit. Unpacked:
2/23: Before shouting down the concept, I encourage you to follow my narrative all the way to the end. I’m not trying to criticize well-intentioned and hard-working people. I’m trying to put a framework around a very counter-intuitive behavior that’s recently emerged.
3/23: What is YOLO investing behavior? For those who haven’t been following it, YOLO stands for “You Only Live Once” and it’s being used as a loose justification for pouring a more than comfortable amount of one’s personal net worth into a highly speculative investment.
Read 23 tweets
26 Jan
1/12: I’ve been asked a lot why there’s so much variance on “valuations relative to traction”. Some companies are getting 100X ARR multiples while others are getting 2X. There’s no simple answer but a big driver is if a company can demonstrate “Multiplicative Momentum”.
2/12: Every talented Investor eventually comes to the realization that Momentum is one of the most powerful forces in the growth (and therefore valuation) of a Startup. Momentum is a very simple Physics concept that ports nicely over to the business world.
3/12: The Physics formula for momentum is: P=MV (Momentum = Mass X Velocity) but the easier way to think about it conceptually is “mass in motion”. In business terms, it matters how large a company is (mass) and how fast it’s growing (motion).
Read 14 tweets
18 Jan
1/10: Do you want to know a little secret regarding how I build conviction during my #startup diligence process? Do you want to know something that I spend time on that many early stage #VCs brush under the rug as silly and unnecessary? Short thread:
2/10: The answer --- I spend time digesting a company’s financial forecast and then review it thoroughly with the Founding team. “Team + TAM rule!” investors think I’ve lost my mind and that it’s a pure waste of time. Hogwash I say. Why ignore a great learning opportunity?
3/10: To set the context, I rarely focus on going forward projections during the first or second meeting because I need to understand the opportunity at a pretty deep level before running through the forecast. More on this here:
Read 10 tweets

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