Kennet Partners

Picture this: 50 of the best bootstrapped technology companies, all in one room. That’s what the Kennet Bootstrapped Technology Awards are all about—a celebration of the incredible companies and teams who are redefining B2B technology by building world-class businesses without external funding. Do you know a company or individual pushing boundaries in this space? Nominate them today: ➡️ kennet.com/awards ⬅️ Let’s shine a spotlight on the grit, creativity, and leadership driving these businesses forward. 🚀 #KennetAwards #Bootstrapped #SaaS #SustainableGrowth

Picture this: 50 of the best bootstrapped technology companies, all in one room. That’s what the Kennet Bootstrapped Technology Awards are all about—a celebration of the incredible companies and teams who are redefining B2B technology by building world-class businesses without external funding. Do you know a company or individual pushing boundaries in this space? Nominate them today: ➡️ kennet.com/awards ⬅️ Let’s shine a spotlight on the grit, creativity, and leadership driving these businesses forward. 🚀 #KennetAwards #Bootstrapped #SaaS #SustainableGrowth

💰💰💰 Taking Cash Off the Table 💰💰💰 VCs typically do not favor founders selling secondaries, viewing it as a negative signal in the founder's belief in the business's future. VCs worry that the founder might want to relax on a beach somewhere 🏖️🏖️🏖️. At Kennet Partners we have the opposite view. We actively encourage founders to take some cash out as part of a deal. Why? 🙋♂️⁉️ - **💼 All In**: Founders, particularly bootstrapped and capital-efficient ones, have usually invested everything into the business. - **🏠 Lifestyle Sacrifices**: They have made significant lifestyle sacrifices along the journey. Some cash out allows for things like mortgages and school fees to be paid off. - **💸 Wealth Concentration**: The business often represents nearly 100% of their personal net wealth. - **🛡️ Risk Mitigation**: As the business scales, founders can become risk-averse. Taking some cash out enables them to feel comfortable with the next stage of the journey. It’s actually pretty uncommon for a founder after selling secondaries to start to take it easy. Usually, it's the opposite – once they get a taste of success through a “mini secondary based exit” their drive to succeed actually increases. There are a bunch of other scenarios where we believe secondary sales make sense: - **👥 Co-Founder Departures**: Facilitating smooth transitions by selling the shares of departing founders, allowing the remaining founders to continue driving growth. - **💰 Employee Liquidity**: Offering liquidity to early employees who have been with the company for a long time, ensuring they are rewarded for their contributions. - **📈 Investor Returns**: Providing returns to early investors and angels who have been with the company from the beginning, aligning interests across the cap table. At Kennet, we believe that these scenarios, when managed correctly, can strengthen the company and align everyone's interests for long-term success 🚀🚀🚀

Really enjoyed participating in the growth equity panel at the Private Equity Insights Conference last week with Agnès Huyghues Despointes, Bernard-Louis Roques and Gabriel Kamensky Sharing my take on the current state of growth equity in SaaS: - Growth vs. Profitability: Growth is still the key driver for value being worth around 3x profit. But at exit, you need to be around breakeven. Managed burn during investment is fine, but you want to end in the black. - SaaS Valuations: Right now, we’re seeing a very, very wide dispersion in ARR multiples. - Key Market Themes; Largelly driven cost savings and simplification platforms are showing more defensibility than point solutions. If you’re a point solution, you need to be very sticky and mission-critical. - AI: we’re moving from “AI sprinkles…” to “show me the money”. - Having an Angle: Investing in B2B SaaS alone isn’t an angle. Real differentiation is essential to compete. - Right Here, Right Now: Is a great time to be building a B2B SaaS business! 💥💥💥 —- I invest in capital efficient and bootstrapped B2B SaaS companies at the growth stage (>$3 million ARR) so if that’s you - reach out! Kennet Partners #Growth #Bootstrapping #SaaS #VC

💰💰💰 𝐇𝐨𝐰 𝐭𝐨 𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐚 𝐅𝐨𝐮𝐧𝐝𝐞𝐫 𝐒𝐞𝐜𝐨𝐧𝐝𝐚𝐫𝐲 𝐋𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐑𝐞𝐪𝐮𝐞𝐬𝐭 💰💰💰 Founders are sometimes a bit hesitant to request secondary liquidity. This is often driven by the perception that some VCs view a secondary request as a negative signal🚩 Here are some ways to confidently position your request: 1️⃣ **𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐏𝐞𝐫𝐬𝐨𝐧𝐚𝐥 𝐒𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐚𝐬 𝐚 𝐂𝐚𝐭𝐚𝐥𝐲𝐬𝐭 𝐟𝐨𝐫 𝐆𝐫𝐨𝐰𝐭𝐡** Founders with financial stability are empowered to think bigger and more strategically. Be clear that secondary liquidity can relieve personal financial strain, enabling you to focus on long-term goals and take bolder risks to scale the business. 2️⃣ **𝐅𝐫𝐚𝐦𝐞 𝐈𝐭 𝐚𝐬 𝐒𝐦𝐚𝐫𝐭 𝐑𝐢𝐬𝐤 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭** With most of your net worth tied to the company, doubling down can be daunting. Secondary liquidity helps mitigate this by allowing you to pursue growth-focused decisions without the shadow of personal financial concerns. 3️⃣ **𝐓𝐢𝐞 𝐈𝐭 𝐭𝐨 𝐋𝐨𝐧𝐠-𝐓𝐞𝐫𝐦 𝐂𝐨𝐦𝐦𝐢𝐭𝐦𝐞𝐧𝐭** Emphasize that secondary liquidity isn’t about stepping back but rather deepening your commitment. Explain that with personal financial security, you can focus 100% on the company’s growth, going *all in* for the next phase* *Unless of course you do wish to exit which is fine too but it’s important to explain that upfront. 4️⃣ **𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭 𝐇𝐨𝐰 𝐈𝐭 𝐀𝐥𝐢𝐠𝐧𝐬 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐬 𝐀𝐜𝐫𝐨𝐬𝐬 𝐭𝐡𝐞 𝐓𝐞𝐚𝐦** Secondary liquidity can benefit early employees, co-founders, and early investors. This isn’t just about you; it's about creating financial balance across the team, keeping everyone motivated and invested in the journey. 5️⃣ **𝐂𝐨𝐧𝐟𝐢𝐫𝐦 𝐓𝐡𝐚𝐭 𝐭𝐡𝐞 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐇𝐚𝐬 𝐒𝐮𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐂𝐚𝐬𝐡/𝐏𝐫𝐢𝐦𝐚𝐫𝐲 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐭𝐨 𝐀𝐜𝐡𝐢𝐞𝐯𝐞 𝐭𝐡𝐞 𝐏𝐥𝐚𝐧** Ensure that stakeholders know the business has enough primary capital to execute its growth strategy without compromising on its objectives. Ultimately, it’s about creating stability that fuels founders and their teams to push forward with a clear, long-term vision. Agree/disagree? Comment below 👇🏻👇🏻 #Growth #SaaS #Bootstrapping #Secondaries #Liquidity

*In the presence of greatness 🎾🎾🎾* Venus Williams Great night at the Investor Allstars last night. Always a fantastic event put on by our good friends Manish Madhvani, Hugh Campbell, Per Roman, and the team at GP Bullhound. Thanks to Ylan Steiner and Orrick, Herrington & Sutcliffe LLP for hosting me at your table. Huge congrats to the well-deserving winners 🥇🥇🥇 The major highlight was the keynote speech from Venus Williams. Some golden nuggets from her talk: - “Don’t miss the last shot” — you have to win when it matters. - “There’s always a price to be paid” — there’s a price for chasing excellence and a price for not. - “Ask for more skills, not fewer challenges.” - “If you feel good about what you’re doing, you’ll get better results. Figure out how to be positive.” - “Take care of yourself and have fun.” - “Discipline gives you the ultimate freedom.” - “Be a leader worth following.” 💥💥💥

A Framework for Looking at B2B SaaS Opportunities 💡💼 I don't think it's always clear what investors are looking for so I wanted to share how I assess new opportunities. As growth investors in B2B technology, we target returns of 3x or more while minimizing downside risk. Here’s the framework I use to evaluate whether a deal has the potential to meet those goals: Management Team 🧑💼👥 We seek teams that we believe can work effectively with us in scaling the business. Teams are often incomplete, so an important question is: Can the CEO, with our support, build a team that can significantly scale the business? Key questions: ↳ Collaborative Fit: Can we work well together? ↳ Experience: Have they built companies before, or are they first-time founders? (Both are fine!) ↳ Alignment: Does their approach align with our risk-return profile? ↳ Leadership Potential: Can they scale the business and inspire new team members with their vision? Market & Competition 🌍📊 We target growing markets with room for multiple winners, avoiding "winner-takes-all" strategies. ↳ Maturity: Is there proven demand? Can we speak to multiple customers actively using the product? ↳ Tailwinds: Is the market truly growing? ↳ Risk: What are the major risks (e.g., large tech competitors, regulatory issues)? ↳ Competition: How does the company differentiate itself? Financials 💰📈 We're interested in businesses that have shown efficient growth and achieved a reasonable level of scale. Key metrics: ↳ Revenue Growth: At least 20% year-over-year. ↳ High Gross Margins: Indicative of scalability. ↳ Capital Efficiency: Has the business used its capital wisely? Product Fit 🔧📦 We prefer products that are critical to their customers, rather than "nice-to-haves." ↳ Customer Feedback: How positive are customer references? ↳ Problem Solving: Does the product address a key customer pain point? ↳ Scalability: Can it grow with demand while maintaining quality? Deal Structure 🤝💼 We consider several factors in the deal itself: ↳ Valuation ↳ Deal Structure ↳ Investment Size ↳ Secondary considerations In addition to the above, intuition and conviction also play a key role in deciding whether to move forward with an investment. What would you add? 👇👇👇 #bootstrapping #growth #SaaS #Scaling #investing Kennet Partners

Last night, we hosted a fantastic drinks event in Paris to celebrate the launch of our latest fund! 🎉🍷🧀 It was a great opportunity to enjoy some wine and cheese with top B2B SaaS founders from the region, exchanging ideas and insights. A special highlight was the fireside chat between Hillel Zidel and Fabrice Lacroix (Fluid Topics) moderated by Cillian Hilliard where they shared valuable advice on how to successfully expand into the US market and avoid common pitfalls. Huge thanks to Edmond de Rothschild for providing the perfect space, and to everyone who attended and made the evening such a success! Exciting times ahead for the future of B2B SaaS in France 🇫🇷 🚀 #SaaS #FundLaunch #Expansion #B2B #Paris #USExpansion #Founders #Growth

**Investing in Bootstrapped Companies: Key Challenges** 🥾👢 I love investing in bootstrapped companies for several reasons: - **Exceptional founders** 🚀: Being able to scale without external capital is extremely challenging. - **Customer-centricity** 🤝: Customers become the bank, fostering strong relationships. - **Efficient capital allocation** 💰: Thoughtful resource management often leads to better outcomes. - **They are sustainable, sensible companies** 🌿 However, common challenges of bootstrapped companies include: 1. **Limited Systems/Reporting** 📊 2. **Very Lean Management Teams** 💼 3. **Technical Debt** 💻 4. **Inbound to Outbound Sales Shift** 📢 5. **Scaling Challenges** 📈 To succeed in scaling, you need plans for: - **System implementation** 🛠️ - **Talent acquisition** 👥 - **Technical debt management** 🔧 - **Sales strategy evolution** 📈 - **Scaling infrastructure** 🌐 Investing in bootstrapped companies is a craft that demands expertise and patience 🚀 #VC #Bootstrapped #GrowthStrategy #Investment #StartupLife Kennet Partners Photo: Sara Blakely who bootstrapped Spanx to a $1.2 billion exit and Yvon Chouinard who bootstrapped Patagonia to $1.5 billion in revenue.

Building Sustainable Growth: The Kennet Philosophy 🚀 At Kennet, we believe that bootstrapped companies, like eBay and Microsoft, are uniquely positioned to achieve sustainable growth through customer focus and disciplined capital allocation. However, raising capital at the right time can unlock further growth potential. Read our full philosophy here 👇 and visit *kennet.com/for-founders* to learn more or connect with our team. #Bootstrapping #SustainableGrowth #Software #SaaS