Plexo Capital的动态

Before the Fab Co-Creation Studio Ventures panel yesterday, I was able to digest some data from a very informative article written by the team at Forerunner Ventures on the attractiveness of VC backed consumer companies relative to VC backed enterprise companies (dataset is 12,000+ companies that raised a Series B since 2010 which translated into 3,100+ consumer and 4,600+ enterprise companies). Some highlights from the article: 1/ Consumer had a higher conversion rate to IPO after Series B -> Consumer companies converted at 1.69% (or 88 companies) while enterprise converted at 1.50% (82 companies) 2/ Consumer companies had a better Rule of 40 (growth rate + profit margin where 40+ is good; this metric is a staple in enterprise investing) -> Consumer companies from the analysis landed at 52% with enterprise at 32%; also, 62% of consumer companies were above 40% compared to 44% of enterprise companies landing above the 40% benchmark 3/ Consumer companies had a higher valuation at IPO -> 18.8% of consumer companies had a valuation above $10B while only 9.6% of enterprise companies exceeded $10B at IPO 4/ Timeline to go public was shorter for consumer companies -> The median timeline for IPO from founding for consumer companies was 76 months compared to 78 months for enterprise companies. Very interesting data given how investors, specifically generalists, have moved away from consumer. That movement is understood given how difficult it can be to identify consumer companies that will become outliers + the pressure for consumer’s scarce dollars with more expensive economies (luxury excluded :). Nonetheless, the data shows when investors get consumer correct, the payoff is meaningful. https://lnkd.in/g5kGyitG

Great details for founders to understand if they have, or are considering, a BTC business. In Forerunner’s eyes, a venture-scalable consumer company is one underpinned by technology where either an?individual consumer pays for the service or product?or?the company’s revenue relies on consumer spend or engagement. Through this lens, consumer companies include much more than retail or inventory-holding companies. They show up in all corners of the market and are fueled by a range of underlying trends. They span marketplace, subscription, software and e-commerce business models and range from digital brands and retailers ...

Interesting… One of the most disappointing aspects of VC is the over-reliance on heuristics—the mental shortcuts we apply to get to a conclusion quickly. It leads to oversimplified conclusions about a business and it’s team. Common VC heuristics: -Marketplaces are a bad idea -SaaS is the only relevant business model -[insert your own here] IMO, the ability to establish and maintain a consumer startup’s relevance within a constantly shifting landscape of consumer preferences is impressive. I also have a theory that founders from collectivist cultures (read: BIPOC) have a unique advantage when it comes to creating successful consumer startups. But that’s another conversation…

VCs don’t like backing consumer startups. Per anecdotes from founders I work with, many investors dismiss consumer models out of hand as ‘not venture scalable’ (apparently they haven’t heard of Nike, Lululemon, or Liquid Death, recently valued at $1.4B which doubles its 2022 valuation). Yet potential for scale is demonstrably not limited to businesses serving enterprises. Consumer business models represent an enormous opportunity for investment as recent analysis from Forerunner shows (https://lnkd.in/gCMMS35U). Compared with enterprise firms, consumer companies: -Are more likely to IPO after raising a B round -Achieve larger IPOs when they do go public -Show better growth rates and profit margins at IPO Despite these facts, well under 10% of VC capital goes to consumer startups (per Carta). We decided to create Twig Ventures after working with many of the brilliant innovators building consumer businesses, particularly in the fashion space. The rise of fast fashion is a frankly terrifying environmental catastrophe unfolding in real time. Consumers purchase 4 times as much product every year from fast fashion brands and use it less than half as long, meaning about 8x as much waste. Less than 1% of post-consumer textile waste in the US is recycled, and clothing manufacturing is responsible for more carbon emissions than the airline industry. Over a third of the microplastics floating around in your home (and the world) are from your own clothes and laundry.? Meanwhile, companies like Natural Fiber Welding and MycoWorks are creating the next generation of materials from microbes, fungi, and agricultural waste like apple peels and olive pits. From manufacturing to last mile delivery there is a rapidly growing opportunity to drastically reduce both carbon emissions and petrochemicals in the supply chain, while improving the ability to recycle and reuse materials at scale. This capacity isn’t guaranteed, nor is it inevitable. The visionaries who are building the technologies to make the future of sustainable consumer goods and fashion a reality, brilliant founders?like Dr. Kitty Y. M. Yeung with Wear It, Jimena Suárez Ibarrola with SENTIENT, and Roya Aghighi with Lite-1, need supporters and investors. Building the future is never easy. If you’re interested in learning more about investing in this space, we’d love to welcome you to our community at Twig Ventures and invite you to check out some events we have planned to start connecting investors with sustainable fashion founders and industry leaders.

Data from Forerunner shows that compared to enterprise companies, venture backed consumer companies are more likely to go public and exceed the “rule of 40” at IPO once they reached series B. In his latest post, Eze Vidra reviews the positive signs for Consumer investing recovery and how AI is likely to affect this space At Remagine Ventures, we invest in how consumers spend their time and money as well as the technologies behind the major consumer trends. Learn more on VC Cafe https://lnkd.in/er-rBSMY

?? ?? For many European startup employees, stock option plans remain an abstract benefit, particularly in today’s sluggish IPO market where it’s harder than ever to see paper wealth turning into real money. That’s why the sale of employee shares on the secondaries market, years before an exit, could be a powerful tool to show workers the actual value of their equity. Scaleups, in particular, are increasingly experimenting with the idea.??? ICYMI, read my story with some great ???? Latvian ???? examples:

Ever wondered why mature startups seek late-stage mega-funding? ?? There's more to it than money. Explore to learn! ?? 1. Boost Growth ?? Funds are used to increase growth and expand horizons, such as by increasing sales and marketing. - Product/service innovation ??? - Uncharted market entry ?? - Strategically buying companies ?? - Growth in production and infrastructure ?? 2. Delayed Public Launch ?? Another substantial private investment round can delay an IPO or acquisition, allowing quick expansion. 3. Increase Pre-Exit Value ?? Larger late-stage rounds can boost pre-IPO or sale valuations, increasing exit returns. 4. Provide liquidity to investors ?? Late rounds let early investors sell shares for liquidity and returns before exiting. Thus, mature firms use late-stage mega-funding to grow ??, avoid early exits ??, raise valuations, and provide investor liquidity while delaying public difficulties. ??

These days I'm focused on investing in vertical software! And ICYMI I wrote a new report analyzing the big lessons that startups can learn from the success of?public market vertical software companies! My favorite stat from the report is about what it ACTUALLY takes to IPO. Like everything, the bar has gone up! Over the last 20 years, the median revenue for vertical software companies at IPO is $139M. Historically for vertical software companies, it’s taken on average 10 years to reach an IPO, with the median value at IPO being $789M. What does this mean for startups? 1) The path to IPO is longer than you might think, especially in this new macroenvironment 2) Each of these companies built strong platforms and layers of product/services to become a leader in their market. One product line, one source of revenue isn't enough to reach these types of outcomes 3) Efficiency and momentum matters! Most of these companies only raised 3-4 rounds of capital before IPO Check out more insights in report - link in comments

The lifecycle of a private company is evolving. Learn more about the paths many startups today are taking to move for their beginnings to IPO.

It's challenging to put valuations in specific numbers for early-stage startups due to the inherent uncertainty associated with their future potential. Here's why: ? Early-stage companies often have minimal revenue or user base, making it hard to predict future performance. ? Valuation often hinges on future possibilities, making it subjective and dependent on assumptions about market adoption and growth. ? The overall market climate and investor appetite for a particular business model can significantly impact valuation. Therefore, ?Early-stage companies?(especially those funded by Angels) may have valuations based on future potential rather than current financials. ?Later-stage companies?(funded by VCs and PE) will have more emphasis placed on financial metrics like revenue, profitability, and growth rate. ?Exit strategy?(IPO, acquisition) can also influence valuation expectations. Remember, valuation is a negotiation between the investor and the startup. Understanding investor expectations for different business models can help startups position themselves for a successful fundraising round. The attached chart dives into a few of the business models that are making waves in the entrepreneurial world and summarizes investor expectations on valuation for both early-stage and growth-stage companies #startuptalk #fundraisingtips #startupfunding #startupvaluation