IVP

Open source software powers our world, but it comes with challenges - and inevitable security vulnerabilities. Developers reluctantly play a slow and manual process of whack-a-mole to patch these vulnerabilities, sucking up time and resources. Chainguard minimizes the attack points and makes building and running applications safer for all companies, which is why we’ve partnered with Dan Lorenc and the Chainguard team on their $140M Series C. More on why we believe here: https://lnkd.in/g_Tr-U4P

"𝐓𝐡𝐞𝐫𝐞'𝐬 𝐚 𝐦𝐚𝐬𝐬 𝐞𝐱𝐭𝐢𝐧𝐜𝐭𝐢𝐨𝐧 𝐞𝐯𝐞𝐧𝐭 𝐜𝐨𝐦𝐢𝐧𝐠 𝐟𝐨𝐫 𝐞𝐚𝐫𝐥𝐲 & 𝐦𝐢𝐝-𝐬𝐭𝐚𝐠𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬. 𝐋𝐚𝐭𝐞 '𝟐𝟑 & '𝟐𝟒 𝐰𝐢𝐥𝐥 𝐦𝐚𝐤𝐞 𝐭𝐡𝐞 '𝟎𝟖 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐜𝐫𝐢𝐬𝐢𝐬 𝐥𝐨𝐨𝐤 𝐪𝐮𝐚𝐢𝐧𝐭 𝐟𝐨𝐫 𝐬𝐭𝐚𝐫𝐭𝐮𝐩𝐬. 𝐁𝐞𝐥𝐨𝐰 𝐈 𝐞𝐱𝐩𝐥𝐚𝐢𝐧 𝐰𝐡𝐞𝐧, 𝐰𝐡𝐲 & 𝐡𝐨𝐰 𝐢𝐭 𝐰𝐢𝐥𝐥 𝐬𝐭𝐚𝐫𝐭 & 𝐨𝐟𝐟𝐞𝐫 *𝐝𝐞𝐭𝐚𝐢𝐥𝐞𝐝 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐟𝐨𝐮𝐧𝐝𝐞𝐫𝐬* 𝐨𝐧 𝐬𝐮𝐫𝐯𝐢𝐯𝐢𝐧𝐠 𝐭𝐡𝐞 𝐥𝐨𝐨𝐦𝐢𝐧𝐠 𝐝𝐢𝐞-𝐨𝐟𝐟." In Jan 2023, Tom Loverro of IVP wrote a post on Twitter on the difficult capital markets startups were going to be facing in 2023 and 2024. Fast forwarding to 18 months later, we have seen some of this play out. That said, for companies that have survived the winter, and have product-market fit, the time to go on offense is now. https://lnkd.in/eVcU8WhS. To cover the capital environment for startups, Tom and I spoke about his original post, what's happened since then, and why the capital markets may be opening up in a big way for stronger companies. Check out Tom's thoughts from the interview in the comments below!

Why is vertical AI SaaS such a promising category? Karthik Ramakrishnan dove into this topic recently with the Emerging Venture Capitalists Association (EVCA) and Terra Nova. His take: vertical AI SaaS companies uniquely leverage customer trust and critical data access to manage essential workflows and create industry-specific AI solutions for high-growth markets.

What are the right questions to uncover a company's true potential? IVP partner Shravan N. suggests avoiding the standby “What is the differentiation?” as it often leads to shallow, skeptical comparisons instead of taking a more nuanced approach rooted in curiosity and focused on the inputs to success. More about his lens for evaluating companies in his latest Substack:

“I firmly believe right now that the winds are shifting and the economy is getting better and startup founders can’t wait for the economic data from 12 months ago. Right now is the perfect time. "Founders: It’s okay to start thinking aggressively again. Don’t go to the extremes of burning way too much money, but let’s think about offense again... If you’re not, someone else is.” Tom Loverro's job is to tell the truth to founders, whether it’s the news they want to hear or not. Watch his take on how startups should face the macro environment on Bloomberg News and read how he's helping startups seize the moment in Fortune. Links in the comments.

Early last year, venture capitalist Tom Loverro offered a grim prediction. He wrote that a mass extinction event was coming for startups that would make the 2008 financial crisis “look quaint.” At the time, he told companies to reduce expenses through layoffs and focus on survival rather than keeping their valuations high. Now he’s back with a much rosier projection. Startups that endured that gruesome period can start spending to grow again. In other words, they should “get responsibly aggressive.” “It’s important for folks to really notice that the music has changed,” said Loverro, a general partner at IVP and an investor in Coinbase and Datadog. More from The Information's Kate Clark on Tom's latest message to founders: It's Time for Offense. https://lnkd.in/g25BH2WK

Pleased to present IVP’s second annual Enterprise AI 55 💡. With so much innovation underway in AI over the past year, we’ve decided to feature a fresh set of companies this year — application layer startups that have introduced compelling new GenAI products with Enterprise traction or those that have successfully kickstarted an Enterprise GTM motion in the past year. Though some of it is experimental, Enterprise budgets for generative AI have undoubtedly grown since we published our first edition last summer, and billions of dollars of budget creation and reallocation are up for the taking for startups. Many advances in the AI infrastructure layer have also propelled generative AI adoption – fine-tuning, inference, hosting, model evals, data governance, security, and other important features are now more broadly available for Enterprises to use to deploy GenAI adoption. The Enterprise AI 55: 2024 Edition is a collection of best-in-class AI products, sourced by operators for operators. We built this list incorporating feedback from hundreds of meetings with founders, management teams, Board meetings, and collaboration with out Fortune 500 network. We hope this is useful reference for operators at Enterprise companies looking to successfully use generative AI for real results. If you are building in this next generation of AI for the Enterprise, please reach out. Look through the full list here: https://lnkd.in/eCzWp6as Chief Revenue Officer: 11x, Attio, AutogenAI, Clay, Docket, Instantly, Nooks, Poggio, Regal, Regie AI, Rohirrim AI, Unify Chief Marketing Officer: Captions, Creatify, HeyGen, Kittl, Krea, Riverside.fm, Tofu Chief Financial Officer: Brex, DataSnipper, Levelpath, Numeric, Omnea, Orb, Payflows, Ramp Chief Customer Officer: Decagon, MavenAGI, Neuron7, Parloa, Sierra Chief People / L&D Officer: Ashby, Teambridge, Simpplr Chief Information Officer (Cross-Functional): Ema, Gamma, Julius AI, Kognitos, Mimica, Orby AI, Perplexity, Polycam, Seek AI, Sema4.ai, Sundial, Superhuman Chief Legal / Compliance Officer: Altana, Doppel, Eve, Greenlite, Leya, MarqVision, Modulate, Norm AI 

The AI landscape has advanced as if 12 years of innovation happened over the past 12 months. Today we’re releasing the 💥 2024 IVP Enterprise AI55 💥 We’ve compiled a fresh set of companies curated through in-depth conversations with enterprise operators. A list by operators, for operators. This year’s list features companies with significant traction and innovative solutions. Here are some key trends we've observed: 🌀 Companies on our 2024 list are generally earlier in their lifecycle. As enterprises gain experience with GenAI, they are more willing to trust younger startups with game-changing products 🌀 AI agents are revolutionizing sales, marketing, and customer service by automating multi-step tasks – analyzing data, making decisions, and improving over time 🌀 San Francisco continues to be the hub for top AI startups and talent, but the industry is becoming increasingly more global Take a look here and let us know your thoughts!  https://lnkd.in/g9Zcyxck

IT'S TIME FOR OFFENSE. We’re on the cusp of a Great Reawakening for startups. Companies that survived the Mass Extinction that I called out in January 2023 need to move decisively or risk being beaten by competitors. Here’s my take on what’s changed, why CEOs should be optimistic and how to get *responsibly* aggressive. Why now? ⏲️ The software economy (a good proxy for the state of most startups) has bottomed out and is now stable and will improve. According to Jamin Ball, growth is just beginning to return - median YoY growth is trending up from its nadir. Perhaps the best measure of that health is Net Dollar Retention and those rates are stabilizing at ~110%. By contrast, from 2022 to H12024, software growth cratered (NDR dropped from ~130% to 110%) & the VC firehose 🚒all but shut down (see Carta "State of Private Markets"). But the worst is now behind us, as NDRs flatten, layoffs subside & the markets from Series A to IPO reopen. Smart CEOs are rightly focused more on software spend and securing their next funding round than macro indicators or fears of a recession. So what should you do now? 🧮Answer: Go on offense! Here’s why: 1️⃣Your cash burn has been low for a year thanks to a tough RIF or two.  2️⃣Deep opex cuts led to a negligible drop in sales and product velocity (real-world example below ⬇️) and operational discipline/efficiency is back.  3️⃣The AI train is leaving the station and you need to be on it. 4️⃣Your competition is on the ropes & [hedge fund name of your choice] won’t save them this time around.😹 So IF your cash 🔥is under control and your runway is secure, start thinking aggressively. Because if you don’t, a more nimble and aggressive startup will. Podium, a later-stage software company and IVP portfolio company, had great success until ZIRP. But then, like many others, it burned too much and lost efficiency. CEO Eric Rea decisively responded by cutting opex, getting burn way down & re-allocating R&D to invest in AI. Podium is now accelerating with AI as an Act 2 tailwind. Eric knows it’s a race, so he’s using Podium’s platform and customer base to go on offense, stay ahead of the competition and maintain operational rigor. To sum up, here are 4 recommendations for how CEOs can *responsibly* go on offense: 1. Create budgets with stage-gates that unlock additional spend — e.g., if sales hits their target in H1, they unlock $M in extra spend for H2. 2. If you’re not building an AI-native Act 2, you’re behind. You cut your R&D significantly but you’ll never be a major platform without Act 2. Remember what you just learned and give it a small, agile AI savvy team. 3. When a new thing is working, pour gas on it. If you develop a new product or module and the data on it comes back positive, reward it with increased budget and new targets. 4. Understand that not all of your new bets will work. Be ready to move on quickly. Otherwise you’ll be in 2021 inefficiency again 😱. Now stop reading, get back out on offense!

Hear Somesh Dash's take on what's driving the fundamental shift in venture, from Allocate's Beyond Summit: