Genevieve LeMarchal’s Post

Why do so many VCs say "come back to us when you have a lead?" Is it because they lack "guts" or "conviction" or want to piggyback on someone's work and experience? Sometimes, yes, these are the reasons. But much, much more likely the reason is the mismatch of check size and runway (or round size). E.g., let's say a company has $50k monthly burn, and they want to raise $1M to have 20 months of runway (simplification) and enough time to get to the next milestone to raise at the higher valuation. And let's say a VC really likes the company and is willing to invest. But their check is $100k (based on the fund size, they can't do more). Should they sign and wire? If they do, the company will have 2 months of runway, and if no one else invests in these two months, the company will go bankrupt and it will be a really quick write-off for that VC. So that VC has to wait until you have at least half of the round ready before they sign and wire, to make sure the company has a chance to get to the next milestone. I also was in a situation of investing early with a small check that didn't give enough runway. Thankfully, thanks to our LPs, we were able to increase the check size over time, so now we can move in first into small rounds (when a company has low burn) - $500-700k rounds. However, if a company needs to raise $2M or $3M, our check is still too small to go first. It's useful for founders to understand how VCs operate.

If you're a founder and you feel like VCs are pressuring you—you might just not have the right mindset for raising capital. I often hear this from fellow founders: Raising VC money puts a ton of external pressure on them to hit specific milestones. If you ask me, if you're one of the top 10% of founders out there, there’s zero pressure from investors. When you raise capital intentionally and build your cap table with the right partners, you’re already setting the bar higher than most VCs would. The goals I set for FERMÀT are usually significantly higher than what a typical VC might suggest. For us, it’s that simple. If I can create an engine that increases the value of capital faster than the market, everyone wins—from our clients to our investors. And that’s the only pressure I need. Now, here’s the real issue:  When you don’t raise capital strategically, that’s when things can go sideways. That’s when the pressure hits. So when do you know it's time to take VC money?  When you're ready to scale. If you've been growing your business organically and are happy with that pace, you shouldn’t take external capital—you’d be diluting for no reason. But if you want to scale faster and need capital to do it, take it. For a SaaS business like FERMÀT, that’s growing more than 2x YOY, external capital often becomes necessary due to cash flow timing. So, before raising anything, get behind the question of why you need the capital in the first place.

🔍 **Insight Alert:** Our Managing Partner, Paul Anthony Claxton, just shared some critical perspectives on the venture capital landscape that every founder and investor should consider. Many VCs expect founders to fail, equating a 5x-7x return with failure. But that’s not how top investors think. Paul breaks down the issues, from early-stage risks to the lack of nurturing, and why strategy—not just hope—should drive the venture game. The goal? Aligning the cap table and aiming for strategic wins, not just settling for “one or two” golden deals. Check out Paul’s post to understand why loss ratios aren’t the full picture and why a single big win can make all the difference. #VentureCapital #FamilyOffice #LimitedPartners #VCInsights #FundManagement #VentureCapitalist #InvestmentStrategy https://lnkd.in/e9Ssq6wd

✋ Venture Capital expects Venture Growth and Venture Returns 🎯 Not all startups are VC investible and that is okay! Founders need to know what they are looking for from their ventures and what type of investors that aligns with best. #founders #startups #fundraising #familyoffice #privateequity #venturecapital

This article explains how (some) VCs take value and turn it into personal fortunes, taking money out of productive use for speculative markets. Personal note: I’m a (very little) VC, a former SME CFO and controller-accountant, and an MBA. I cap our equity asks at investment value + reasonable and patient interest. So that value stays IN the company and we aren’t building companies to sell the company, we’re building them to support founders and employees in creating real value and a good life for them and their customers. No less. Some notes on the article: The 1/10 «unicorns» that typical VCs keep and grow are typically the companies that didn’t need a VC in the first place. A direct investment would have been far more advantageous to the founders and the staff. VCs are mostly terrible at DEI, too. «According to State of European Tech 2022, 87% of all VC funding in Europe is still raised by men-only founding teams, while funding raised by women-only teams dropped from 3% to 1% from 2018, and only 1.4% of European unicorns are made up of entirely minority ethnic entrepreneurs.» From: https://lnkd.in/e7wadXmT https://lnkd.in/e-KP-F8M 📣👋 If you’re feeling like hey *I* don’t do business that way: good. Get in touch.

The information gap in VC that a lot of Founders miss is that your VCs are expecting you to fail and fail means in VC language 5x - 7x return 😂 It’s not logical and lacks all business sense This NEGATIVE thought process is not how TOP INVESTORS THINK VCs know most of their portfolio companies are not going to be the golden child. VCs are usually counting on 1 or 2 to return at least 20x plus Why do they settle for this? 3 reasons 1. Early stage is more risky but has much higher returns 2. Lack of network 3. Lack of quality deal flow 4. Rush to deploy; the quicker money deploys the better performance And these are all the problems … I believe many VCs do invest when the business model and market opportunity checks out so why shouldn’t it be a hit right? Because there’s a lack of nurturing from the VCs and intensive listening from the Founders involved and large cap tables with different agendas misaligned where many things get lost leading to failure It’s a cop out to expect failure because you need to deploy capital and hope for the best when the strategy was incorrect in the first place and would have eliminate the hope for the best mindset If you want to win bigger deals in combination with lower loss ratios then the cap table ALL must be on board and ALL in That’s how I see it- So let’s get into understanding loss ratios in VC. You don’t need a lot of muscle or wins to make it in this game, but you do need strategy which is some of what I discussed above In venture capital, loss ratios can be misleading. Here’s why they’re not the full picture: 1. A single big win can overshadow many losses, so focusing on loss ratios can misrepresent a portfolio's true success. 2. Play the game you signed up for. Losses are expected in VC. The key is identifying that one game-changing winner. 3. High loss ratios don’t necessarily mean poor performance. Exceptional returns from a few big wins are what really count. Remember, in VC, it’s the outliers that make all the difference. #VentureCapital #FamilyOffice #LimitedPartners #VCInsights #FundManagement #VentureCapitalist #InvestmentStrategy

"Hey Jeff, quick question after our conversation a few weeks ago. We went ahead and set up our holding company like you advised so thank you for that! The question is, and I think you already answered this but I wanted to ask again. Can VC funds invest in us now since we are now a startup set up as a C corp and not a fund?" Yes they can and you're correct about being a startup and the C corp is the gold standard. A few things to think about though when it comes to VC's. Can you grow fast enough? They typically want at least 30% annual growth and that's not so easy to pull off. What is the exit plan for them/how do they get out in whole or in chunks? Do you plan on an IPO or liquidity events along the way? Are you going to raise more money or is this it? Have to factor in dilution. Will they get different terms and preferences? They'll ask for them for sure! VC's are great because they can write big checks, but sometimes they aren't the right investors just because they're different than most other institutional investors are. It's not all of their own money so they're basically borrowing from others and trying to make the biggest ROI they can within the time limit which is 7-10 years. You can try, just make sure that's who you really want in your corner because if you take it, you'll be on their payroll, if you know what I mean.

Sometimes REJECTIONS are simply a result of bad luck, poor timing or the difficulty in seeing the potential you might have. One of the world's oldest VC firms put together a list of deals they rejected over the years that went on to become tremendous success. See? https://lnkd.in/dbTby7Cg. World is cyclical, Everything will eventually happen to everyone. But when you are in that point of cycle where you are on precipice of falling, you will not listen to the one ahead: " Keep walking", instead you will listen to the one behind : "We won't make it." That is human disposition. Things happen by chance. That is universal disposition. We place systems in place. They churn, We are disposed at that disposition. The too much flow of positive can increase the heat and burn the circuit too, hence embrace the negatives in life. #motivation #workmode #investment #vc #friday #work #life

Stephen Whyte recently jumped in on a post where I described what ADCR Capital's mission is, aside with what I currently see that is going on in the market, leading to me starting the firm. He found it spot on, that's already a good start 😅 . In the comment section, he also said: "The challenge we are seeing is the ones that have already had VC funding where the VCs seem to lack motivation to support a restructuring. How do you propose to deal with reluctant VC?" Absolutely love it when people give those open questions to see what you got - or would do, in certain scenarios. It offers an opportunity to share expertise, yet equally so, an opportunity to learn. I then replied I'd have a sitdown with that VC and get to the bottom of why they are blocking it. Typically these are companies that are not performing as they should, so VC's have all the benefits of what I describe here. That I'd also work closely together with this VC, on a strategic and board level so there is consensus on what we're building here. Or try. In case of conflict, I'd attempt to offer a path to an exit. No magic here, depends on their goals, and ambitions, and sometimes deals just don't work out. But you can sit down and talk about it, and see if there would be a potential way forward in any of those 2 directions. Get their buy-in or offer an exit. But then Stephen Whyte pointed out something to me: "Our challenge is we often engage with the founder who has a strained/nervous relationship with their investors now that the dream of being a Unicorn is dead. Here in the UK we have noticed that many investors are holding these investments in their portfolio at valuations that no longer make sense, maybe the are raising a new fund 😉. When the investment is still held at an unrealistic valuation it is hard to engage with the VC as it forces the issue on a write-down" That does quite close the door - doesn't it. See: not every situation is fixable. Sometimes there's a conflict of interest beyond your control. Not too much you can do about that one. You can try, but there are sometimes different forces at play. I found that addition from Stephen educational, worth sharing. #privateequity #founders #vc #venturecapital #tech

Has your team ever received a term sheet from a VC, only to find out there's an expiration date? Here's a great guide on how to avoid getting stressed, and find a way to make it work for you and your venture, as well as your potential investors! https://bit.ly/435E8Z2