@dkimerling
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Founder + Managing Partner @Deciens; Lead Investor, @chippercashapp @GlacierGrid @Funding_U @treasuryprime & many other fintechs. 💍 to @jojonojojo
Albuquerque, NM
Joined January 2008
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amen
The "game on the field" is to go stratospheric or explode on the pad. Nothing in-between is ideal.
No patience for somebody pursuing their life's work; just a rat race for ARR that turns technology into a hamster wheel that spins ever faster while going nowhere.
This attitude resulted in a remarkable immolation of capital in 2018–2022, and is arguably worse today.
There is simply not enough intellectual bandwidth relative to the amount of capital in VC right now.
My infrequent reminder that, valuation (price) is what you pay value is what you get.
Valuation = Price, Valuation ≠ Value
If you geniuneuly feel like one and done is the right thing for you, come find me.
Founders, stop telling VCs you’re only going to raise one round, maybe one more, and then never need capital again.
It sounds capital efficient. To a VC, it can sound like you don’t understand how venture works.
VCs are investing in companies they believe can compound quickly, attract more capital, raise at higher valuations and create markups along the way. Those subsequent rounds help validate the investment, establish new pricing and give funds something tangible to show LPs long before an exit.
If your pitch is “we’ll raise $3M, become profitable and never need another dollar,” you may be describing a great business. But you’re not necessarily describing the type of company the venture model is built to fund.
And the other problem is simpler: investors probably don’t believe you anyway.
If the company grows as quickly as you’re promising, there’s a good chance you’ll eventually decide that taking another $20M to accelerate growth is rational.
Capital efficiency is great. Optionality is great. Pretending you know today that you’ll never raise again usually isn’t.
Dan Kimerling retweeted
Risk management 101—every exposure should have a limit, even when you’re sure nothing could go wrong. After all, the Titanic sank and AAA mortgage bonds went to zero. I worry about the market’s (and the economy’s) unlimited appetite for exposure to the positive AI revenue story.
This too shall pass.
We are currently at the biggest bifurcation in early stage startup funding I’ve ever seen.
I’ve had dozens of conversations over the last few weeks with founders, VCs and family offices about what is actually “fundable” right now, and the list keeps getting shorter as expectations rise.
There is plenty of capital, but it’s concentrating into fewer companies.
At one end, the best companies are raising bigger rounds at higher valuations earlier than ever. At the other, good companies with real revenue, customers and solid growth are struggling to raise at all.
The middle is disappearing.
Being a good business isn’t enough anymore. Investors increasingly want to believe you can become an enormous business, very quickly.
More capital. Higher expectations. Fewer companies that qualify.
amen
RATIONAL CAPITAL
The reasonably priced 3T2D series A and B might be the best investment opportunity in the market today
These companies are trading at significant discounts to public markets and what financial sponsors will pay
Just need to be able to keep the companies solvent and be patient as they mature and market self-corrects
In a market where VCs are paying 100x revenue and giving unicorn valuations to companies that haven’t launched a product, this is what we call good ole fashioned rational capital
i’ve known @pitdesi for 15+ years. i think he’s a hell of a guy and love working with him. thankful for the friendship and partnership he’s shown me and our shared companies.
anytime you see ad hominem attacks you should think carefully about the attackers incentives
1). You should never work with VCs who devote their time to dunking on startups on x. Taking money from Sheel’d fund is a hugely negative signal for the startups who do that for this reason, he is bad for the ecosystem and this behavior is a pattern of his. I’d imagine that his fund will have adverse selection because of this sort of nasty online presence. VCs who endlessly critique startups from the sidelines in public deserve no respect.
2). I don’t talk about our etf business much because we did not officially launch it yet, but it’s not that hard to understand that launching ETFs with (typically) 1/3 to 1/2 the fees of legacy incumbents for comparable products is a strategy that will lead to inflows, even if it takes some time. Clowning on us for this is like clowning on any startup for having small revenue while completely ignoring growth rate, unit economics, etc. giving investors choices at a (typically) lowest in category expense ratio is (in my opinion) a good strategy for our company. If you don’t like it, keep paying the high fees and choose other funds (there’s plenty to choose from)!
this x100
Right now, you're either:
* an AI-native rocketship, which sounds fun until you realize it means being in a permanent fundraising situation at ever more scary valuations to hoover up capital and talent, and in a constant death match with other rocketships to capture customers, sacrificing gross margins; or
* basically left for dead, regardless of how good a company you actually are
This has been the case for a while, but feels like it just escalated a notch.
The GOAT speaks
Specialist, experienced, product-first, very early stage venture firms FTW.
I’ve been discussing this since I first founded @iaventures and it’s the same at @gamechangersvc: an investment from us is a commitment, a partnership to help founders get from 0=>1. Then we help them scale from there. It’s a life cycle approach that starts at the beginning. We have deep founder alignment and what happens matters to all of us.
It’s all we do. It’s what we do. And we do it well.
Dan Kimerling retweeted
Specialist, experienced, product-first, very early stage venture firms FTW.
I’ve been discussing this since I first founded @iaventures and it’s the same at @gamechangersvc: an investment from us is a commitment, a partnership to help founders get from 0=>1. Then we help them scale from there. It’s a life cycle approach that starts at the beginning. We have deep founder alignment and what happens matters to all of us.
It’s all we do. It’s what we do. And we do it well.
- Platform firms spray the Seed market with high-cap call options, hoping to catch the rocket ships.
- If a startup becomes a rocket ship, the Seed price matters much less than access to later rounds.
- If it doesn't take off immediately, the high price will make it much harder to raise subsequent capital.
- Series A activity falls, as overpriced startups are less able to experiment, pivot and test the market.
- The survivors are mostly incremental products with high execution risk and little idiosyncratic risk.
- The total real value of the startup world begins to fall, though the contraction is masked by overbidding.
- More of the remaining value is concentrated in the portfolios of the platform firms, at inflated marks.
- Performance is understood on a relative basis, so the platform firms still appear attractive to LPs.
- Smaller firms are washed out of the market, victims of concentration and weaker risk appetite.
- Liquidity falls, but exits get much larger which is twisted to claim the concentration is logical.
- Large exits are substantially overvalued, and the companies virtually all flounder afterwards.
- Innovation slows, fewer jobs are created, and less wealth is generated for pensions and retail investors.
- "Tech" becomes associated with rent-seeking oligarchs rather than optimism and progress.
<<< We are here.
- Butlerian jihad / Luddite rebellion / Socialism.
Everyday I read a lot of funding announcements.
This is my periodic reminder that raising capital is not winning. Raising capital is a tool to help companies win.
Don't confuse the cart for the horse.
Being right about a technology ≠ making money from it.
People who bought Amazon at the peak of the Dotcom Bubble waited 10 years to break even. Cisco buyers waited 24.
Timing is the variable most investors underweight and most founders under-plan for.
deciens.com/press-and-insigh…
Dan Kimerling retweeted
We are incredibly proud of everyone on the Sydecar team and thankful to our customers and partners who helped make this possible: as of the end of September, Sydecar has surpassed $3B in assets under administration.
Dan Kimerling retweeted
Just dropped a 🔥 convo w/ @dkimerling of @Deciens Capital on @vcmastermind.
💡 Leading every deal
💡 Concentration over diversification
💡 6,000 LP leads → 183 yeses for Fund III
Why differentiation = survival in VC.
🎧 vcmastermind.com/conviction-…
