Alejandro Fischer

Nic Poulos and I wrote an essay for Euclid Ventures, "An Era for Vertical Software." The TL;DR is that vertical SaaS is a distinct, enduring discipline that we believe is poised to dominate the software landscape over the next decade.   "2024 will represent a turning point, perhaps even a new era for venture capital. While the fog feels like it’s lifting, the path forward isn’t yet clear. One includes a soft landing for the US economy and the continuing recovery of software multiples, with ZIRP-era behaviors continuing around hot themes. Another sees a recessionary period in which VC capital inflows remain stagnant and startup funding the year dips below $100B. Either way, a more measured VC market in 2024 is a certainty. For many investors, that will come with a rude awakening as their strategy becomes more difficult to execute or their thesis of choice is negatively impacted by tightening markets.    We see this reversion of the venture ecosystem to its mean as a strong tailwind for Euclid and vertical software. As a category, Vertical SaaS is uniquely well suited to thrive in volatile market conditions and produce fund-returning outcomes. The sections below aim to answer the question: why is vertical software different? Our answer discusses the factors driving the natural market resilience we see in vertical software as a category–resilience that will help them thrive in 2024 and beyond."

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To my knowledge, there are only 3 methods to recruit elite talent: 1. Luck 2. Unique Motivation: Something about your organization attracts them, like mission-driven companies such as Coinbase. 3. Top of market compensation The only surefire path to win elite talent is option #3.

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Wendy Xiao, Molly Alter, Aaron Liu, and I recently hosted a dinner with CMIO / CIOs from top NY health systems and execs from startups who are building solutions across the care delivery and back-office billing stack. A few takeaways: - Delivering value-based care at scale changes the incentives for health systems in such a way that they require unique point solutions that can help them triage and manage at-risk patients. - While scribing platforms are certainly powerful in the administrative burden they can take off of doctors, their full value may not be unleashed until they can convert notes into the appropriate fields / codes for billing. - More attention needs to be paid to social determinants of health. For example, certain types of new addiction treatment, like gambling, may soon be covered by insurance if data continues to show that there are serious negative health implications for people affected. Treatments like Ozempic are also showing promise in the field of addiction. In the coming years there will an increasing acknowledgment of how interconnected social factors and medical health are across all patient populations. If you’re a healthcare exec looking to learn more about what the next generation of healthcare IT startups are building, or a healthcare startup looking to get involved, please reach out. cc Northzone

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NY friends! Please come see me at Tech Day on my panel discussing the future of the NY tech ecosystem and what I hope to bring to it!

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InVision has experienced the biggest fall from glory in Silicon Valley's recent history. $350M raised with a peak valuation of $2B. And now they are shutting down. Not acquihired or "acquired by private equity" or strategic tuck-in. Just a hard stop. It's so easy to s**t on them. They got out-innovated, they were not product driven etc. etc. But, the truth is most startups that raised monster rounds in ZIRP days could face this deadend. You raised too much money: 1/ So you are too expensive to acquire 2/ So you raised your burn too high to finance a big GTM team 2/ So you got complacent on product 3/ So you got lazy on shipping There will be a lot more inVisions in the next 24 months as startups run out of capital. It's sad. The employees & founders at these companies gave it their all, but raising too much money sealed their fate. For the next gen of startup founders, heed this advice: raise little, keep your burn low, ship fast!

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For NY Tech Week we'll be demo-ing Substrate at the South Park Commons Science Faire on Thursday: https://lnkd.in/e5JwDKKX There are so many incubator-shaped things out there these days, but there's nothing quite like SPC. It's like a chill, small-batch, locally-sourced alternative to YC, where you can either hang out as a member forever - or choose the VC-funded adventure. The -1 to 0 phase [0] they talk about at SPC is real, and it made a real difference for us to have a home at SPC. It takes a lot to quit your job and do something new, especially when it isn't entirely clear what you're doing. (1) Do it – take the leap! and (2) consider joining SPC. Though the core vision has remained the same, many of the important turns in our squiggle at Substrate (including the graph framework) came from those early days at SPC. If you're here for tech week and can't catch us at SPC on Thursday, DM me if you want to meet up! [0] https://lnkd.in/e6KEMr9V

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Super helpful article and accompanying doc with a #Startup #Equity Calculator to determine the equity for early hires, thanks to Pear VC head of talent Matt Birnbaum! Thanks for sharing Pejman Nozad! 🙏🏼 You can read more here How to structure startup equity for early hires: https://lnkd.in/ggmpT5-Y Google Doc: https://lnkd.in/gjsvths6

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Is Dart the next big thing in the programming world? Dillon Nys, founder of Celest (YC W24) and a passionate advocate for Dart, believes the language is poised for a major takeoff. While Dart may not yet have the extensive libraries and community support of established backend languages like Go or C#, Dillon sees a shift happening. More and more companies are recognizing the power and versatility of Dart for full-stack development. In this episode of The Lobster Talks podcast, Dillon dives deep into: -Why Dart is a highly capable language for various applications -The growing momentum behind Dart in the developer community -The potential for Dart to become a major player in the backend development space -How Celest is building the foundational tools to support Dart's expansion Hear Dillon's insights on the future of Dart and its potential impact on the software development landscape. Watch the complete episode on The Lobster Talks podcast here -> https://lnkd.in/ecE2FtwS #dart #flutter #celest #softwaredevelopment #backend #programming #futureofcoding #startups #lobstertalks

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How we raised our $1.4M seed round (and a step-by-step guide to help you raise yours) 👇 1️⃣ 👼 Get your round moving with angels The bulk of your seed round (80%+) will come from 1-3 institutional VCs. VCs, however, will rarely be your first check. The more traction your round has, the more confident a VC will be to invest. To find angels, tap into friends, family, and your network. We leveraged the Indian Institute of Technology, Madras alumni network in SF to collect several $10k-$30k checks, totalling over $100k. We got our first VC investment only after raising from angels. 2️⃣ 🗓 Get meetings with VCs booked Now that your round has traction, talk to VCs. NEVER send cold emails. That makes you look desperate, and VCs only invest in ‘hot’ companies. The BEST way to get investor meetings is through intros from their portfolio companies. Many of our Y Combinator batch companies introduced us to their investors! We also got our angels to introduce us to funds. Now’s also a good time to reach back out to investors who reached out when you weren’t raising. Usually, never ask an investor who has passed on you for intros. Only accept intros if the investor can't possibly invest in your company even if they wanted to, eg: they only do Series B+ rounds, they don’t invest in your space, etc. 3️⃣👩‍💼 Pitch! Make your pitch conversational. It should NOT be a one-sided presentation. Your slide deck should be <15 mins. Communicate that your market is large. Sometimes tweaks in positioning can make a big difference. For eg, expanding our target audience from just customer success to an all-in-one video & docs tool for CS, Product Marketing and L&D led to much more interest. At the end of the pitch, there should be clear next steps. Ask them straight up: “Are you going to invest?” If they say no, ask them why and answer their concerns. After the pitch meeting, follow up regularly. Send updates on new customers you’ve closed and new money you’ve raised. Build a sense of FOMO amongst VCs. 4️⃣ 🤝 Take money from whoever offers it to you Do NOT act smart and wait to hear back from the ‘top’ VCs before accepting offers on the table. Don’t try to schedule the meetings such that the “best” funds are first and the “worse” ones are later. Take money from whoever gives it to you. You want to wrap this up quickly and get back to the things that matter - building and closing customers. That said, a VC is going to be a long-term partner in your startup. If you want to learn more about their working style, you can ask them for referrals to portcos. 5️⃣ 🏃‍♂️ Keep at it As technical founders, we love building and talking to users. Running behind investors can be the least enjoyable part of your startup. Still, stick to it. If you can wrap this up now, you won’t have to come back for an extension round later. Even if it takes 2-3 months, get the job done. I'm happy to take any comments or questions on this strategy below! #funding #startups

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If you are a founder in AZ, you are doing yourself a disservice by relying only on the AZ investor ecosystem. Try to tap into SF, NYC, LA, etc. to give yourself more leverage, and even more importantly, a POV that spans beyond the desert.

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Recently, Cognition AI raised $175M at $2B Valuation - Six-month-old company with < 30 people and most likely pre revenue! What gives? It’s impossible to justify the valuation based on a traditional SaaS ARR 20X multiple. It will likely take them years to get to $100M ARR with a per seat model and grow into their valuation. Hence, you have to believe that the business case for Cognition is that Devin, their AI-powered coding assistant, may likely be priced on the value prop of replacing software engineers. This may be the first in an era of startups based on Agentic models that can act independently, learn from real-world interactions, and adapt their behavior. Very different paradigm than traditional AI, which is usually programmed to perform repetitive tasks and lacks the ability to understand complex workflows. Big bold ambition for sure, time will tell if it works. What do folks think? https://lnkd.in/gqrkcsK4

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A good short practical list!

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Wild to see New York Tech Week be such a thing still 2 years later. When we started it at Capital, I had to fight, scratch, claw, and (sometimes) beg people and companies to host events. Didn't look like that publicly because we drove a ton of hype and momentum to it. Eventually, the hype becomes a self-fulfilling prophesy. But the 0 to 1 to keep that hype going required a ton of effort. Now the whole thing has a momentum of it's own. For example, two companies that told me no to hosting events just invited me to their tech week events for this year. The lesson - drive enough momentum and eventually something becomes the default. Inevitable. Inevitability can be engineered.

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I've noticed it's common for first time founders to fall into the trap of over-investing in hypothetical future problems. Questions like, "How much will this BaaS (Backend as a Service) cost when we have a million users?" seem to consume more focus than "How do we get (and keep) our first 100 users?". At Vygo, I was the sole technical founder and only engineer for many years. By keeping our technical overhead low and choosing services and frameworks that simplified my workload instead of trying to manage everything myself, we were able to overcome many challenges and grow with an extremely lean team. While planning for scalability is important, spending too much of your limited capacity solving for potential future scenarios can be counterproductive early on. Building a sustainable company with a small team and the ability to iterate quickly to support your customers is key. A manageable foundation will help to ensure your company reaches the stage where these "good problems to have" can now be solved.

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Summary: The article discusses NASA's mission to Mars to collect rocks, the growing opportunity for startups in the space industry, latest venture capital news, and a breakdown of a16z's $7.2 billion worth of new funds. Key takeaways: NASA's mission to Mars to collect rocks was expected to cost $11 billion and take a long time, but with open input from startups, the cost and timeline may improve. Startups are increasingly interested in the space industry, as shown by Two Chairs' Series C funding and Quilt's recent fundraising for heat pump work. a16z's recent announcement of $7.2 billion worth of new funds indicates their continued success and shows they are unaffected by the current venture slowdown. Counter arguments: Some may argue that the cost and timeline for NASA's mission to Mars is not feasible, even with support from startups. While a growth in startups in the space industry is promising, there is still a long way to go before it becomes a major player in the startup world. #venturecapital #vc #venture #startups

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Calling all fintech start-ups! C10 Labs has exciting news to share. J.P. Morgan is now supporting C10 Labs and its cohorts of entrepreneurs. As part of this partnership, C10 Labs companies will have access to J.P. Morgan's insights, products, bankers, and technologists. This support will assist C10 founders through their entrepreneurial journey and help them accelerate business growth. If you're interested in co-creating AI-First ventures, especially those in fintech, C10 Labs' 2nd cohort is now open for applications. Apply here: https://lnkd.in/eCjnUBnn Contact a C10 Labs team member about partnership opportunities here: https://lnkd.in/ewGCfhBb We want to extend our thanks to the incredible support by the J.P. Morgan team. To connect with them, click here: https://lnkd.in/eeEgvzSC. #entrepreneurs #accelerate #AI #fintech #partnership

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The early days of founding Outreach was a bumpy ride. At one point we were 7 pivots deep with 3 weeks of runway in the bank. Here's how we survived: 1. We convinced our investors our 8th pivot was "the one." Before this pivot, we were a tech-focused recruiting marketplace called GroupTalent. We had spent 3 years throwing everything at the wall trying to get growth, but nothing worked. We had one more idea. To help us source developers and designers to join our talent pool, we built an internal tool which allowed us to send personalized emails at scale. The reply rates to these emails were off the charts, and we found that other recruiters wanted to buy the tool. This tool eventually became the first version of Outreach sequences. Our investors had no reason to believe this pivot would be any different but they gave us one final shot - which gave us enough time to prove out an MVP. 🙏🏼 2. We had each other’s back. Most startups die of suicide, not murder. Being founders is more than just a working relationship. It’s like a marriage. You’re with each other sometimes 16 hours a day and you need tools to get through the lows. The four of us made time to get together every friday over drinks, and talk about the highs and lows of the week. And not just team-level highs and lows, we did individual-level highs and lows about each other which prevented little issues from festering and made us stronger as a team. 3. We found our “Founder Market Fit.” Before Outreach, we were basically recruiters that could have run GroupTalent off of a spreadsheet. We built a ton of tech for a problem that didn’t need it. For example, we built a really cool workflow and matching automation engine that tried to intelligently match talent up with projects. But we didn’t have the scale to warrant this investment. GroupTalent was a bad product fit for our team. The value we were selling at the end of the day was the talent itself, not the tech. But with Outreach, the value was the tech and building the tech was our superpower. Once we figured this out, we were seeing a much higher ROI. 4.  We obsessed over our customers. With Outreach, we had customers since day 1 and boy did we listen to them. We were all doing customer support in the early days and built very close relationships with them. It was nice having customers finally care about the tech we were building and we were thankful for it. (Queue up our 2014 Thanksgiving video) Being so close with our customers helped us build the right product out of the gate and build up a loyal following for years to come. LOTS more to go into later, but these were the major themes that got us to the next milestone as a company.

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Summary: Harlem Capital, a venture capital firm focused on backing diverse founders, is raising its largest fund to date of $150 million. This would be its third fund and is a testament to the industry's continued support for diverse communities. Key takeaways: Harlem Capital was founded in 2015 with the goal of supporting diverse founders. The firm has $174 million in assets under management and has made investments in over 80 companies. The successful raising of the $150 million fund would be a show of success for both Harlem Capital and the industry's continued focus on diversity and inclusion. #venturecapital #vc #venture #diversity #dei

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Been seeing PropelAuth pop around a bunch and boy do I love auth. Always like new players in the game. Let's take a quick look. Pricing. I don't get it. The first tier is 150/month for 2.5k mau. 6c an MAU is pretty crazy expensive esp given most competitors offer 10k for free... The feature breakdown between tiers is also a bit confusing. Some features which seem critical to building an app are behind paywalls where as others which are "nice to haves" are in the free bucket. Unlimited orgs is nice I suppose but that cost is just built into the MAU pricing. Maybe I don't need unlimited? I know Clerk charges way more per org but their MAU's are almost free in comparison. Features. Outside the usually suspects, (2FA, SSO, email, RBAC, etc) the API key stuff was pretty cool esp if you are setting up a dev focused product. Waitlist feature is also a nice little touch. I think most waitlists are disgustingly complicated for their purpose and it is cool they have this on the free tier. It would be nice if there was a drop in UI to let end orgs manage their own users but I couldn't find that anywhere. Clerk has this but it was a little janky in my experience. Docs. The setup is awkward or maybe more so strange. When i go to quickstart I see all these warnings about framework selection. It took a solid 5 minutes before I realized there is a selector in the UI. Using what appears to be a HOC withAuthInfo, seems again awkward at least in the react realm unless I am missing a reason for this. I'd strongly recommend dropping all the HOC usage esp given their are hooks which do the same. Backend was pretty simple. My 2c after an all be it brief review, docs need a bit of love. Which features fit into what payment bucket could also use a review. Clerk and everyone elese for example let me have a staging env at the free tier given it is kinda a requirement to move anything to prod. Little odd to gate that behind a 150/month paywall. It is actually kinda a complete non-starter for any project. 2FA is not needed for a free tier and could easily move to a paid feature. The target customer seems to be anyone launching a very early enterprise developer focused product. A waitlist with unlimited orgs and built in api keys hits many of the fast path needs for a GTM play in that space. The per mau cost isn't as important here but the feature bucketing is strange and would be a non-starter for me. I wish propel the best of luck as auth certainly needs more innovation. It is my least favorite part of building an app.

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