Mike MacCombie

@MikeMacCombie

Pre-seed investor, community builder, behavior science geek. Curating the best gems/opportunities/content each week for people in tech/VC: bit.ly/3YTzECB

New York, NYJoined April 2009

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Mike MacCombie

@MikeMacCombie

Nov 1, 2022

Going to attempt 30 threads in 30 days, have a backlog of content Let’s see what happens Will cover: 💎Random gems 🧠Mental frameworks 🤯Behavioral science 🙌🏼Community building 📈Startup/VC commentary 🙅🏻‍♂️Solutions to stuff people say is hard You can find all 30 threads here 👇🏻

(B) Will need to be ready in terms of progress for top-of-market Seed valuation with bottom of market traction expectations. Next raise will be slow to come together unless they break through to perception of being a top deal.

(A) Likely not enough money to prove out the milestones needed to get to the next round at a reasonably higher valuation. Next raise will likely be only a fraction higher valuation.

I'm seeing a lot of deals at 2 levels: (A) $500K-$1M raises at $10M post, pre-product. (B) $3M at $15M post, first round, pre-revenue. Both are going to be tough:

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Mike MacCombie

@MikeMacCombie

Feb 4

What effect does having the "oh shit, I'm going to be dead at some point" life crisis realization have on overall cortisol levels before and after?

Is there a connection between people with misophonia and those with ASMR?

Is there a genetic basis for people who have really accurate internal senses of what time it is?

Are people who have gone through traumatic experiences more likely to go to bed late and procrastinate, because it's their coping mechanism to feel less helpless?

Are Android users more likely to use certain dating apps than others compared to iPhone users? And are they more likely to match with other Android users on apps?

How much of the divorce rate is due to people with avoidant attachment?

Are there a higher percentage of introverts living in Brooklyn than Manhattan?

Interesting questions that came up at events this week about psychology and society :

Shoutout of the week to

@zehranaqvi_

who has been impressive with her work on ecosystem building - choosing specific events with refreshing curation/themes/content, being intentional with the value she brings, and building a reputation that if she is hosting it, it will be good

Mike MacCombie

@MikeMacCombie

Feb 3

Reminder for my GP friends. 💯

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Eric Bahn

@ericbahn

Jan 31

We're not a big fund ($150M AUM, including SPVs), but we've said NO to tens of millions of dollars of LP commits. I wanted to create a thread about the common reasons why we reject LP money.

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Mike MacCombie

@MikeMacCombie

Feb 3

Hosted a post-holiday winter party and a new to NYC VC dinner for 25 this week. If you are in the NYC VC ecosystem and want to get more connected to the community Shoot me a DM - we’re at almost 400 members now

Mike MacCombie

@MikeMacCombie

Feb 2

Inflection, they won't get higher than a $25M raise. The valuation of a first round doesn't represent a deficit of the founder - it represents grounding in reality and a high likelihood of never having a down round or fundamental risk around fundraising.

(B) - Had a fast revenue ramp up at this round, and can raise next round easily. (C) - Might not need to raise again. Those companies that raised a first round at a $15M post pre-revenue? That reality check will be their next round, and likelihood is if they don't hit...

Each one has been categorized as too low of a valuation by founders. But: (A) - Building out distribution that will let it skip to a $10M A round. Early on revenue, but inflection point happens within a year. First round let them raise bridge raises easily without much delay

How do you determine which to go for? Capital needs for success / when your inflection point happens. 3 companies from my portfolio: (A): $5M post, 20% dilution. Pre-revenue (B): $6M post, second round $11M post, $900K ARR (C): $24M post, $600K monthly profit.

But in this market, there is a ceiling around $500M valuations where almost nothing is budging. Bad stock market -> low expectations for growth round -> minimal leeway in A round valuations. So given this - you can pick reality in the pre-seed, seed, or A.

Some even made it to IPO and haven't fully hit the wall yet (e.g. Uber) In the land of unlimited optimism in downstream investment rounds, founders could raise their first rounds at whatever price they could still get checks.

Nearly every company will have to face reality at some point in their lifecycle. Reality = valuation based on performance, without hype to bolster it up. Usually it's at the Series A for most companies. Some make it past the A. Some get acquired before it happens.

The "reality round" I've seen judgement of founders for initial fundraises at lower valuations, assuming they made a mistake or didn't know how to negotiate. Why I disagree: They chose to raise based on reality sooner than later. Here's what I mean, with portfolio examples:

Portfolio founder: “Hey! Want to chat this week?” My 🧠💭: Something’s wrong, time to support 🫡 On call: “Everything is going great! Folks want to invest more, we want to capture the market that just got another tailwind, and we want to give you allocation again” 😅🥰🙌🏼

Mike MacCombie

@MikeMacCombie

Feb 2

-“How did you get started with X”- if it is about something someone created for a lot of people, odds are they have answered this question multiple times already at an event. -“How’s it going”: 95% odds it will become “great/good, you?”

Questions that aren’t great for building up conversation when you meet someone: -“Tell me more about X”: Puts the obligation on the other person to figure out what to share, without clarity about what is enough information -Questions that just require a yes/no answer…

But they are losing the battle for attention by doing that. If you take these questions, ask them genuinely and with thought for every slide, I guarantee your deck will be more compelling than before.

It means choose the minimum viable communication to make the point credibly. Now, those are two very basic questions. But 95% of founders don't *deeply* internalize them in making their deck. They want to include the details - show the VCs their world to make the point.

-Investors spend at most 4 minutes lookin at a deck. At worst - 40 seconds or so if you lose them quickly. -Reduce the thinking needed to understand your points and believe them. If one graph proves something more than three bullets, do it. This does not mean put nothing.

Second question: "What is the least amount of information you could give on this slide to prove that point with credibility?" I see a ton of slides that should be broken into three separate slides, or have gratuitous description. Reasons why I ask this:

Whatever the founder gets to in terms of the ideal conclusion, I tell them to make that the title of the slide. e.g. "I want to show them that we have the ability to build a mode via data accumulation" -> Great, then say that.

Reasons why I ask this: -Slides should not be titled "problem" "solution" "team" etc in my opinion. It's valuable real estate, make it purposeful. -The titles should be points of view, and the slide just goes to prove whatever the point of view is - aka the desired outcome

I've walked through this process with dozens of founders, and for every slide, it is the same steps. First question I ask: "What is the conclusion that you want an investor to make from reading this slide?" Not the topic. Not the information. What do you want them to think?

Too many pitch decks get in their own way because of unclear messaging and noise. Two basic questions would take care of 95% of the problem decks:

A portfolio founder told me today they wanted to send a potential customer to a direct competitor to compete side by side with them, because they win head-to-heads against all their competitors and wanted the datapoint on the expected win 🤯

Mike MacCombie

@MikeMacCombie

Jan 30

If you work in: -Partnerships -Evangelist -BD-related role at an organization And sponsor events... Or have a space that you like to host events in...(in NYC, to start) Shoot me a DM

Admins will share events that come up (via requests, referrals) for the community to consider: -Event type -Desired area -Curation -Size -Timing -Budget Members will then be able to opt in for more info on the sponsor/space side, and then we make connections or consider 2/

🚨Community Launch: NYC Event Collabs🚨 Every time I host an event, I wish I had an easy way to figure out space and sponsors. So, I'm launching a community for It. Where space owners and event sponsors can hear about opportunities... How it will work: 1/

This is not medical advice, but rather just some ideas that might help you work through your Sunday anxieties.

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