1) First off - what is an LP? A limited partner is an investor in a fund.
@HustleFundVC for example, we have raised money from individuals, families, companies, and fund-of-funds. This is the money we use to invest in startups.
They are our LPs.
2) Next, what is the process to becoming an LP in a fund?
Today almost all US funds (if not all) require LPs to be at least accredited investors in order to invest. ($1m+ in assets or $200k/yr in salary)
A VC fund $10m+ can have 99 LPs max. Under that, 250 LPs is the limit.
2) At a high level, the most *ideal* situation is that you have just 1 customer acquisition method & channel. 1 playbook. People specialize & focus on the same thing day in & out.
That's the ideal. It doesn't work out that way, but that's what you hope will happen.
Today I was talking with a @HustleFundVC portfolio founder about how aggressive they should be with customer acquisition spend.
What customer acquisition cost (CAC) should they aim for? Payback period?
A thread on this topic >>
1) First off, I think a lot of founders think about what number they should aim for for their CAC.
I think this is the WRONG way to think about it. There's no holy grail number. But there are good and bad ways to think about CAC.
2) At a high level, your CAC must ALWAYS be less than your lifetime value (LTV) at scale - in order to have a real business!
The problem for startups is that you often don't know what that lifetime value is, so it's a moving target of what your best guess is. Refine as you go.
Yesterday, @MacConwell, @jefielding & I chatted about valuations yesterday on Clubhouse.
Some thoughts & takeaways from the discussion.
tl;dr: Valuation is NEVER about how much your co is "worth". It's about the price of your equity that you and investors agree upon.
More >>
1) As I like to say, valuations are about supply and demand. Supply of your round / tranche. Demand of investors. It's your job as a founder to generate that demand.
That's what allows you to command a higher valuation. Investors don't just naturally offer you a high valuation.
2) Investor demand increases when you have lots of investors circling AT THE SAME TIME.
It does no good to have 1 investor look now and then approach another investor later. Investors need urgency.