Miranda Kelly’s Post

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…

If I could count the number of times I heard a VC say "I love what you're doing but we just don't invest in Consumer startups." Thanks for the reminder on why that's a huge miss Forerunner! "We live in a consumer-driven economy—consumer spending accounts for two-thirds of the U.S. GDP. Yet Carta recently reported that just 7% of seed capital raised on the site last year went to consumer companies, the smallest share since 2018. And yet... Consumer companies offer better growth rates and profit margins at IPO. Consumer company IPOs are larger. Consumer companies fetch comparable revenue multiples at IPO." https://lnkd.in/gARb-Q6W

As the stock market reaches new peaks, discussion of a possible revival of the IPO market has taken center stage. Which companies could be next? Business Insider examines PitchBook's VC Exit Predictor data, looking at startups with over a 90% chance of an IPO according to our proprietary methodology. 🚀 📈

As the stock market reaches new peaks, discussion of a possible revival of the IPO market has taken center stage. Which companies could be next? Business Insider examines PitchBook's VC Exit Predictor data, looking at startups with over a 90% chance of an IPO according to our proprietary methodology. Well worth a look 👀

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

📊 257 Tech Companies That Could Hit IPO in 2024 according to CB Insights 📊 2023 was not the year for companies looking to go public. Worldwide, there were less than 200 VC-backed IPOs. Some of the biggest tech IPOs were: ▪️ Arm ▪️ Klaviyo ▪️ Instacart Since three companies went public in September, it gave a sense of renewal to the market. However, since these debuts, there haven't been any VC-backed companies in the US listed above a billion dollars. Many tech companies are waiting for 2024 to be the year they go public, especially as late-stage venture capital dries up. CB Insights put together a list of 257 tech companies likely to go public in the next 12-18 months based on the following factors: > Valuation > Founding year > Stage of investment > Employee headcount > The Mosaic score of CB Insights > Total equity funding (and how soon each company may need fresh capital) Check out the names of the companies and more detailed information in the slides below. The last slide on the investors could be particularly interesting to founders. #fundraising #IPO #tech #valuation #founders #startups #VC

At Flagstaff Ventures, we hold strong beliefs in the power of consumer startups to change the world and improve lives. A number of studies highlight their success in the IPO market and their potential impact in an AI-driven future. One recent research piece by Forerunner landed in our inbox and caught our attention. You can view it here. #ConsumerInnovation #IPOSuccessStories #AIFutureChampions #ForerunnerInsights

Thursday Tech Tip: 📈 💱 📉 Calling all startup founders! This week's tech tip dives into the current IPO market and explores some alternative paths to success. Only a few companies have recently gone public, the overall IPO market is likely to remain sluggish. Uncertainty surrounding the upcoming election and global economic jitters are creating a wait-and-see approach from investors. This means that a lot of VCs are likely to advise their portco companies to delay IPOs until next year, anticipating a more open market in 2025. But this doesn't mean there aren't still exciting opportunities for startups in 2024! M&A remains a strong and exciting exit strategy. Large, established companies are always looking for innovative startups to acquire, and a down market can sometimes create even more attractive valuations. Here are some key takeaways: 🔹 The IPO market might be on hold, but M&A activity remains healthy. 🔸 Focus on building a strong, valuable company to attract potential acquirers. 🔹 Stay informed about market trends and investor sentiment. So, don't hit the brakes on your startup journey! By strategically navigating the current market conditions, you can still position your company for success. #startuplife #venturecapital #M&A #techfunding #IPO #toIPOornottoIPO

IPO market insiders, while cautious, are optimistic that the current trickle of companies going public will pick up steam. I recently shared some additional thoughts on this trend with Crunchbase. https://lnkd.in/gh75AxcU #ipo #ai #startups

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