Quentin Nickmans’ Post

We all already did know this, of course ( 😉 ), but nobody "really" wants to admit it... what I would absolutely love to see added to this chart, just so everybody FINALLY gets the message: one or two datapoints for each vintage, S&P500 and NASDAQ multiple over the same period of time... (or, if you think we live in a particularly "good" time for the general stock market - the AVERAGE S&P500 multiple over 13-7 years instead...). It is about time to realize that "traditional" VC does on average NOT create value (for their LPs). Instead of an asset class that chases bets, we instead need people who invest AND help operate and grow their targets. People who understand that "capitalism" and successful entrepreneurship and being a successful business means making decisions that lead to said business returning a PROFIT (or at the very least, being able to), hence increasing the value of the capital in the real worlds (DPI) and not on paper (TVPI). Also: excellent article linked in the OP by Quentin Nickmans. One comment on that though: I think VC themselves also are focusing too much on AUM at this point. So the story about carry being "just the cherry on top" applies here as well. What we need - again and especially right now - are "enterprises" (explicitly not necessarily funds) like Platinum Equity in its early days: Operators who identify a struggling but promising venture and take it from there, away from hallucinations of ARR and decacorns, and back into the real world of hard work, efficient and effective operations, real revenue from (and in service of) customers, and actual, hard-cash profit.

Navigating the Fundraising Landscape: A Stage-by-Stage Guide for Startups Fundraising can feel like a marathon, not a sprint. Understanding the different stages is crucial for any entrepreneur looking to secure capital and grow their venture. Here's a breakdown to help you strategically plan your approach: 1. Pre-Seed Stage: • Focus: Idea validation, market research, building a minimum viable product (MVP). • Source of Funds: Founders' personal savings, friends & family, small angel investments. • Goal: Prove concept, gather initial user feedback. 2. Seed Stage: • Focus: Product development, early user acquisition, team building. • Source of Funds: Angel investors, accelerators, early-stage venture capital (VC) firms. • Goal: Achieve product-market fit, demonstrate traction. 3. Series A Stage: • Focus: Scaling operations, expanding market reach, refining business model. • Source of Funds: Venture Capital firms. • Goal: Significant revenue growth, solidify competitive advantage. 4. Series B Stage: • Focus: Further scaling, entering new markets, potentially acquiring other companies. • Source of Funds: Larger Venture Capital firms, growth equity. • Goal: Rapid expansion, achieving market leadership. 5. Series C and Beyond: • Focus: Global expansion, strategic acquisitions, preparing for IPO or acquisition. • Source of Funds: Late-stage VC, private equity, institutional investors. • Goal: Maximize market share, prepare for exit opportunities. Each stage comes with its own challenges and opportunities. Understanding where you are and what investors are looking for at each point can significantly increase your chances of success. What stage is your business in, or what challenges have you faced in your fundraising journey? Share your insights below! #Fundraising #Startup #VentureCapital #Entrepreneurship #SeedFunding #SeriesA #BusinessGrowth

💸 Why Venture Capitalists Say “No” to Your Startup Many founders take investor rejection personally — as if it means their idea isn’t good enough. But in the venture capital world, “No” doesn’t mean your idea is bad. It simply means it’s not yet investable.” According to insights compiled by Venture Café, there are over 50 common reasons why VCs decline a startup pitch. If we group them, most fall into four key categories: Market, Team, Financials, and Strategy. 🧭 1️⃣ Market & Opportunity A great product can still fail if the timing or market fit is off. VCs often walk away when the target market is too small, the business model isn’t proven, or the product hasn’t achieved product-market fit. Sometimes the idea sounds “interesting but not scalable.” 💡 Lesson: Build for a large, growing, and validated market. Show evidence of traction, not assumptions on a slide. 👥 2️⃣ Team VCs often say, “We invest in people, not just products.” Even a simple idea can win if the execution team is strong. However, investors lose confidence when founders aren’t full-time, teams lack complementary skills, or internal chemistry seems weak. 💡 Lesson: Build a complete, committed, and capable founding team. A powerful vision needs strong human infrastructure. 💰 3️⃣ Financials & Fundraising Many startups fall apart during due diligence because their financials are messy: overly optimistic projections, unclear cap tables, or unrealistic burn rates. Others aim for inflated valuations without sufficient traction or metrics. 💡 Lesson: Be transparent. Manage capital efficiently and anchor your valuation in logic and data — not hope. 🧩 4️⃣ Strategy & Communication A pitch deck can open doors — or close them. VCs reject pitches when storytelling is weak, market research is shallow, or the scaling plan is vague. Founders must clearly show how the business can grow 10x, not just that they dream it will. 💡 Lesson: Craft a compelling narrative backed by strategy. Show the path from vision to execution. 🚀 Final Takeaway VCs don’t reject startups — they reject unmanaged risk. Every “no” is feedback. Every rejection is a data point to refine your business model, story, and execution. The best founders don’t fear rejection; they use it to get sharper. Because in venture building, rejection isn’t the end — it’s the start of refinement. #VentureCapital #StartupFunding #Founders #Entrepreneurship #Innovation #PitchDeck #StartupTips #VCInsights

From the book “Investors and Startups: Understanding the investment market for startup as an investor” Tip 5: Insight into the book that you need to know as an investor and startup before you plunge into that investment. “History and Evolution of Start-up Capital To understand where start-up investing is today—and where it’s heading—it’s important to look at its historical journey. The concept of investing in new ventures is not new. From the merchant explorers of the Renaissance to the digital unicorns of Silicon Valley, capital has always chased opportunity. But the form, scale, and structure of start-up capital have evolved dramatically. These are the record in history: 1. Early Origins: Risk Capital in Exploration and Trade 2. Industrial Era (18th – 19th Century): Capital Meets Industry 3. The Birth of Venture Capital (1940s – 1960s) 4. The Silicon Valley Boom (1970s – 1990s) 5. The Dot-Com Era and Crash (Late 1990s – Early 2000s) 6. The Rise of Angel Investing and Accelerators (2005 – 2015) 7. The Unicorn Era and Global Expansion (2015 – Present) 8. Post-Pandemic and Beyond (2020s and Future)” Get ready to collect your copy soon on Lulu.

Lessons from a Reluctant Startup Investor: 5 Takeaway Lessons from Startup Investing from a Turnaround Professional https://lnkd.in/gS7TKw4d From my recently posted article on lessons I learned (and relearned) from my experiences working with early-stage startup's and their founders. 1)     Raising “dumb” money on purpose just isn’t smart 2)     Don’t waste time in a pitch meeting describing the wrenches you will use to build the thing that’s going to generate your company’s revenue 3)     We all know about climate change and the detrimental outcomes, allocate your time wisely in a pitch meeting and consider using a simple formula to allocate that time 4)     If it’s so secret you can’t discuss it in reasonable detail, your startup isn’t a good venture capital investment 5)     If you aren’t on the experience curve that you can confidently scale you aren’t ready for a series A raise, so understand in what proportions Newton’s Laws and Moore’s Laws apply to your organizing vision and mission’s success Bonus 6)     Don’t say anything on social media you wouldn’t say to any investor’s face – not just the ones you are currently pitching or plan on pitching – but any investor, anywhere

Many hold misconceptions about angel investing. Here's a clear breakdown of a common myth versus reality. Myth: Angel investors are mostly affluent individuals in tech-heavy regions like Silicon Valley. Fact: Contrary to popular belief, most angel investors are spread across various regions, significantly outside traditional venture capital hotspots. This offers entrepreneurs broader access to funding. Myth: Women are not prominent in the angel investment scene. Fact: Women make up about 22% of all angel investors, and they increasingly support women-led startups, which is crucial for equity in entrepreneurship. The landscape of angel investing is broadening, presenting exciting avenues for startups. What do you think this means for emerging businesses and investors alike? Are we seeing a shift in how investments are made? https://lnkd.in/eZ22UNsz

I just completed the webinar "How to Evaluate a Startup’s Founder-Market Fit" organized by Angeles Investors and facilitated by Jeshua Cardenas, Director of Growth, Angeles Investors and Lister Delgado, Managing Partner, IDEA Fund Partners. It was a great webinar that covered some important concepts such as what “Founder–Market Fit” really means and why it’s a critical predictor of success, how to evaluate a founder’s credibility, domain expertise, and personal connection to the problem, what are the signals that reveal strong alignment between vision, capability, and market opportunity and finally, the presenters discussed some real examples of how top investors identify — or miss — founder–market fit in early deals. The importance when evaluating an investment to ask the founder to explain why he/she started the company, what is the "origin story" of the company, you normally most of what you need to know. Quality over quantity of leadership of the founder is more important, as an investor as you develop investment experience you will develop stronger ability to identify the intangibles and the quality that founders may bring into the venture. In most cases it is situation dependent, for example understanding if the industry requires disruption or not is critical, in cases like this a brand new perspective in founders could be more important than experience in an evolutionary type of venture. Repeat founders don't always have a good "founder-market-fit" especially if the founder never had failure before but it is moving into an area that may be unknown and risky to the repeat founder. The best way to demonstrate good market-fit is the ability to generate revenue in the new venture. Establishing good leading indicators for the company you are investing is a good best practice in the absence or as a complement of revenue projections. It is important to look into the deep domain expertise that founders really know of their customers, what competitors are doing, and their deep knowledge of their market, and the true value of the innovation they are introducing. It is important for investors to have multiple conversations with founders, it is important to assess how resilient, driven an ambitious the founders are, who are their advisors and the people that surround them. We need to look to our investors as part of our team, are they bringing credibility, are they part of our community, do they have board/advisory experience, do we have the right mix and diversity to help to make the business successful. We will continue to see accelerated progress in innovation.

Is the "meritocracy" of venture capital really just a well-disguised "relationship business"? Two recent articles have me thinking about the power dynamics in VC, and it's not all about finding the most contrarian ideas. It seems success in this industry hinges more on who you know than what you know. Here are a few takeaways that stood out: 🔑 𝗩𝗖 𝗶𝘀 𝗮 𝘀𝗼𝗰𝗶𝗮𝗹 𝗴𝗮𝗺𝗲. Forget the lone wolf persona. The reality is that early-stage startups are a bet on people, not just ideas. This makes networking and reputation paramount. In a world where every firm is selling the same product (money for equity), your social capital is what sets you apart. 🤝 𝗔 𝗰𝗹𝗼𝘀𝗲𝗱 𝗻𝗲𝘁𝘄𝗼𝗿𝗸 𝗼𝗳 𝗶𝗻𝗰𝘂𝗺𝗯𝗲𝗻𝘁𝘀. It's no secret that a small number of players hold a shocking amount of power. In 2024, just 30 VC funds raised 75% of all venture capital in the US. This concentration of capital and power in the hands of a few firms, mostly in San Francisco, creates a system that can feel more like a cartel than a competitive market. 📉 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽𝘀 𝗼𝘃𝗲𝗿 𝗿𝗲𝘁𝘂𝗿𝗻𝘀? This "relationship-driven" environment can lead to some questionable outcomes. There are unspoken agreements to mark up each other's portfolio companies in exchange for deal flow, which can distort the market. This raises the question: is the focus truly on finding the best companies, or is it about maintaining the existing power structure? The big takeaway for me is that while we celebrate the disruptive power of startups, the industry that funds them can be incredibly resistant to change. It's a powerful reminder that even in a world obsessed with data and innovation, human connection and insider networks still hold immense power. What are your thoughts? Is the VC world as meritocratic as it claims to be? Sources: https://lnkd.in/d9-cuV5R https://lnkd.in/deBV_XP9 #VentureCapital #StartupCulture #Networking #Innovation #Tech #Entrepreneurship

What Investors Look For—Notes on Winning Some Venture Capital Here is what I have learned working with both VCs and venture-backed startups: Investors focus on concrete innovation—solving problems in new ways with real market impact and/or disruptive potential. Gaining market share from traditional players is an advantage, as is a strong founding team with a track record that signals execution and resilience; solo founders often face more skepticism. Today, VCs also look for traction through revenue or growth, a clearly defined market (TAM and SAM), and thoughtful competitor analysis. Clearly, the founders’ personal financial commitment (“skin in the game”) serves as a litmus test for seriousness, especially in capital-intensive projects involving software and hardware. When that element is missing, the chances of funding may decrease. The more of these elements a business demonstrates, the higher its chances of securing support and thriving in a competitive venture landscape. In recent discussions with a former colleague in the financing field, the core topic was what investors and traditional credit managers seek in tech-enabled deals—beyond just financial statements. Proving a unique value proposition or real innovation (not merely big ideas but actual IP or deployments), founders having “skin in the game,” and presenting a credible, compelling pitch remain essential. While capital intensity remains a challenge—in particular for hardware companies—the current venture market is increasingly focused on software and AI, prioritizing startups with innovation, disruption, leadership experience, or a combination of those. An important lesson: even non-startups must demonstrate growth potential, risk-sharing, and founder commitment to overcome traditional credit barriers and attract serious investment. Ultimately, the right mix of innovation, team pedigree, personal investment, and revenue runway makes all the difference. #VentureCapital #Startups #Fundraising #InvestorInsights #Founders #TechInnovation #StartupGrowth #VCFundamentals #Entrepreneurship #EarlyStageVenture #InnovationEconomy #FundingStrategies #ScaleUp #SeedFunding #DisruptiveTech

💬 When Venture Capital Forgets Its Soul Here’s the truth: Most VCs say they back “diverse” and “mission-driven” founders… but only when those missions fit a specific narrative. Faith-driven founders. Ethical builders. Value-centered entrepreneurs of all backgrounds. They’re quietly filtered out. And that’s ironic — because these were the very kinds of people who built the world’s most trusted companies back in the day. They built from conviction, craftsmanship, and conscience — not from hype or market optics. They cared about integrity more than valuation. And they didn’t have to trade their soul for scale. Today’s startup culture has turned scaling into an idol. When you pressure every founder to “scale or fail,” you don’t breed innovation — you breed recklessness. That’s why we’re seeing more: • Dissatisfied customers • Legal blowback • Burnout across entire ecosystems Hypergrowth has become a moral trap. True diversity isn’t about politics or optics — it’s about conviction. It’s about giving space to founders who build ethically, sustainably, and in alignment with their beliefs. Once upon a time, venture capital funded that kind of courage. Now, it often filters it out. It’s time to rediscover the diversity of thought, faith, and conscience that built real innovation — the kind that lasts for decades, not funding rounds. 🌿 That’s why I am building Palettea — a creative platform designed for ethical collaboration, not exploitation. Because innovation doesn’t need to abandon morality to make impact. Real art. Real integrity. Real purpose. That’s the kind of scale that matters. #VentureCapital #FaithDrivenFounders #EthicalEntrepreneurship #InnovationWithIntegrity #CreativeEconomy #Palettea