VC Math, a Prediction for the Next 18 Months, and What Pre-Seed Investors Look For

A newsletter for founders & friends (14th edition)

Hey 👋

Welcome to the 14th edition of Re:Vitalize, a newsletter with tactics, strategies, and stories on building companies plus cool things we’re seeing in the future of work.

Did you miss last week’s newsletter about top startup accelerators, sharpening your analytical thinking, and managing burn rate? Subscribe below so you never miss another👇

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Top 3 Tweets

🥇 A Prediction for the Next 18 Months

Michael Karnjanaprakorn @mikekarnj

Over the next 18 months, we will see an unprecedented number of startups that will shutdown, conduct layoffs, and close down rounds. Here is an overly simplified deep dive:

🥈 VC Math

Gale Wilkinson @Vitalize @galeforceVC

did the math today for an LP - we get 550 deals / month at top of funnel we meet with 160 we conduct dd on 5-6 we invest in 1-2 < .5% investment rate narrowing the field based on strike zone focus is where the magic happens

🥉 What Pre-Seed Investors Look For

Some of the responses to this tweet by yours truly

Diana Melencio 🇺🇸🇵🇭 @DianaMelencio

@justingordon212 1) founder’s ability to execute 2) addressing a true white space and not “next best widget” 3) ok to be pre-revenue but not pre-traction < more than just an idea and validated thru a pilot, customer surveys, etc

David Chang @changds

@justingordon212 @galeforceVC @carolinecasson_ @MacConwell @dunkhippo33 @irrvrntVC @startupstella @ArlanWasHere The holy trio of 👥 Compelling team: serial entrepreneurs or promising 1st-time founders, focus, grit, founder/oppty fit 📈 Big market oppty: clear pain point, large TAM, tailwinds 🪄 Differentiated solution: unique angle on competition & wedge to claim a stake in the long-term

Caroline Casson @carolinecasson_

@changds @justingordon212 @galeforceVC @MacConwell @dunkhippo33 @irrvrntVC @startupstella @ArlanWasHere Agree with @changds + massive disruptive idea 💡 + strategic data science strategy as part of differentiator 📈

Paul Johnson @PaulJohnsonMN

@justingordon212 90% founding team. Need someone who is committed, persistent, and market-relevant. I take the specific idea with a grain of salt, because I actually expect them to have to pivot (maybe multiple times). Question then becomes: Can this team pivot and find their market?

Andrew Gluck @irrvrntVC

@justingordon212 @galeforceVC @carolinecasson_ @MacConwell @dunkhippo33 @changds @startupstella @ArlanWasHere Differentiated approach to a large problem where they have unique insights. Real thought / work > customer interviews, time spent coding, etc.

Alex 💰⚾️⛳️🎸 @ARski34

@justingordon212 Understanding of prototype/market fit (customer feedback) and some leading indication of traction (customer waitlist, email sign-ups, etc.) Team should have domain expertise and willingness to share lessons ...and some indication of cash flow potential / slower burn rate.

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Resources

• The new START program from a16z

• Alternative funding options for founders

• A platform for finding angel investors

• THE list of VC lists

• A tool for B2B prospecting

• 7 different growth loops to implement

• The complete guide to content optimization

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Future of Work Reads

• The Amazonification of the American workforce (Vox)

• Five Surprising Ways The Metaverse Meets The Future Of Work (Forbes)

• What It Looks Like When Architects Build a Future of Work Space for Themselves (TIME)

• Hybrid work: Making it fit with your diversity, equity, and inclusion strategy (McKinsey)

• How Shifts in Remote Behavior Affect Employee Well-Being (MIT Sloan Management Review)

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The World of VITALIZE

• Claire Schmidt, Founder & CEO of All Voices (VITALIZE Portfolio Company), was on the FemTech Focus podcast

• VITALIZE Angels currently has 3 live deals

• This week, The VITALIZE Podcast featured Deena Shakir, Partner at Lux Capital, a venture firm with $4B of AUM that invests in emerging science and technology ventures at the outermost edges of what is possible

• Open jobs at Vitalize portfolio companies

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Future of Work Funding Rounds

• Checkr raised a $120M Series E

  • Checkr automates and speeds up the process of professional background checks.

  • Top Investors: GV, Y Combinator, Accel, Fidelity Management and Research Company, T. Rowe Price

• Mutiny raised a $50M Series B

  • Mutiny offers AI technology to optimize ads and landing pages based on customer behavior.

  • Top Investors: Sequoia Capital, Insight Partners, Y Combinator, Tiger Global Management, Liquid 2 Ventures

• Shipium raised a $27.5M Series A

  • Shipium operates as an e-commerce logistics company that helps companies provide a faster shopping experience for customers.

  • Top Investors: Insight Partners, Good Friends, PSL Ventures, Trilogy Equity Partners, Christopher North

• Slope raised a $24M Series A

  • Buy Now, Pay Later solution for B2B purchases

  • Top Investors: Union Square Ventures, Global Founders Capital, Monashees, William Hockey, Arash Ferdowsi

• Playbook raised an $18M Series A

  • Playbook is an “easy-to-use” cloud storage and sharing tool for freelancers and designers and applies tech such as image tagging to photos and videos, “turning a usually dry view of files into an expressive Pinterest-like gallery.

  • Top Investors: Founders Fund, Elad Gil, Bain Capital Ventures, Backend Capital, Inovia Capital

• Compt raised a $13M Series A

  • Compt is a perk management software that helps companies create, manage, and streamline perk stipends that delight employees.

  • Top Investors: Battery Ventures, Slack Fund, Harlem Capital Partners, Impellent Ventures

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Written by Justin Gordon, Director of Marketing at VITALIZE, a venture capital firm and 300+ member angel investing community for everyone investing in U.S.-based B2B software founders in the work revolution. Find us on Twitter, LinkedIn, and YouTube.