Crafting a Forwardable Email

The week we discuss the forwardable email, recurring vs reoccuring revenue, and benchmarks on advisor equity.

?? The Art of the Forwardable Email

Constance Deng Dadon an investor at Emerson Collective , posted an article on the framework she uses to craft a forwardable email. Before making an intro, most connectors will ask if the person identified for the potential intro is open to meeting the person making the request, a.k.a., the double opt-in. A forwardable email is a customized email that an individual facilitating the intro can use to do the double opt-in.?

“A GREAT forwardable email is succinct and to the point. It shouldn’t be a huge time investment for the receiver to read your entire email and it shouldn’t be difficult to figure out why you want to connect with them.”

STV Take

Investors facilitate a lot of intros between all sorts of folks. Connecting people is a fun, rewarding part of the job, but because of the volume of intros investors do, it can become overwhelming.

The forwardable email is so powerful because, if done well, it enables the person seeking the intro to control the messaging, getting the best information in front of the person at the moment they’ll decide whether it makes sense to connect. And, of course, it makes the life of the connector much easier.?

?? Recurring vs. Reoccuring Revenue

CJ Gustafson a tech CFO, penned a Substack on the differences between recurring and reoccuring revenue. In short, recurring revenue is revenue that is generated consistently at a predictable amount and in ideal scenarios is bound to that payment schedule via a contract. Reoccuring revenue is generated through repeat customers but the timing and/or amount is not regular. The key difference between the two is that recurring revenue is predictable while reoccurring revenue is not.?

“At the risk of being too basic, a typical SaaS business charges you the same amount each month - regardless of the number of days in a month or your product usage. This de-risks performance, and therefore valuation, to a degree.”

STV Take

It raises a red flag when a founder claims a specific amount of recurring revenue, only for investors to discover that it’s actually reoccurring revenue. This situation reflects poorly on the founder, whether it’s intentional deception or a lack of understanding. Either way, it’s likely to make investors hesitant. Not every model is pure SaaS, and that's fine—just be clear about what constitutes true recurring revenue.

?? Advisor Equity

Peter Walker, Peter Walker Head of Insights at Carta, published stats on the median amount of equity granted to advisors at the Pre-seed, Seed, and Series A. The chart below shows the range across the different stages:?

STV Take

While granting advisors equity can be a great way to incentivize industry experts to get involved with the business, equity is expensive. Knowing what is standard for advisor equity grants is the first step in creating a successful advisor relationship.

The next step is to make sure expectations are clear on what the founder expects of the advisor and vice versa.

We have seen both advisors and founders get frustrated with their arrangement, and more often than not, it comes back to misaligned expectations because none were set from the start of the engagement.?

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