Front Porch Venture Partners

One of the toughest aspects of building a venture firm is creating a machine of differentiated deal flow that can be sustained over the long run. Some firms and/or partners have brands that create deal flow, others grab their pens and thumbs to generate inbound with content, and others hit the phones, emails and texts for outbound sourcing — though most utilize a combo of these. As we started to build Front Porch, we didn’t have any of these things, so we needed to find a different way to build our deal flow machinery. And we needed that machine to get us access to the best deals, not just the ones that everybody else sees.

Our stats on fund partners so far: - 24 fund partners invested in (alumni count as a single fund partner) - 31 individual funds invested in (7 partners backed in both Fund 1 and 2) - 2.63 average fund number (i.e., number count of funds the firm has created) - $79.9M average fund size (across all funds that we’ve invested in) - 12 emerging managers (deploying their first or second fund)

Nice job as always to our friends at BIP Ventures today on their State of Startups in the Southeast report and debrief — only feedback is that we couldn’t see which new pair of Nikes that Mark donned today. First up — BIP summarizes the report in four key takeaways: a) Through the Trough (tldr; things are flat but improving) b) The Southeast Is Ahead (context: the Southeast has shorter time between rounds compared to US average for two years in a row) c) Rise of Private Credit (tldr; non/less-dilutive capital continues to find a way post-SVB especially with more “default alive” startups) d) AI is the Tool, Not the Toolbelt (translation: the impact of AI will be/is far beyond the headline-grabbing core AI platforms) Next up — back to the long term trend line…? Always tough to apply averages to an outlier industry, but stepping back is a healthy exercise. Q1 2024 and Q1 2019 had the same total deal count (~650 deals) and total capital deployed (~$2.5-3B) in the Southeast. Annually, both 2024 (so far) and 2019 had average post-money valuations that were ~20-22% periods below the national average. This is a rebound from being as low as 30% below the US average in 2022 (the data has indicated and our own experience suggests the Southeast had less medicine to take and generally took it early). Last thing — swinging lamps in Pisa. State league tables are murky, but they’re worth a look. In this data every state is projected DOWN on deal count when compared to 2023, except maybe South Carolina and Mississippi on relatively low volume. The Carolinas are projected UP in total capital deployed, but everyone else is FLAT or DOWN. So… what does that mean? We read a lot of this data and visualize a pendulum that is perpetually moving between demand (for capital) and supply (of capital). With this in mind, we don’t put UP/FLAT/DOWN into a GOOD/MEH/BAD category, because it really depends on which seat you’re in. The bid/ask spread went super wide (if not non-existent) in early 2022. Although it has narrowed since and continues to do so, normalizing takes time and 2025 may just get us back to equilibrium. cc: Front Porch Venture Partners

"Search It Up" - The title of a Substack post by partner Joe Mancini of Front Porch Venture Partners out of the #Triangle area of NC. I thought it was a very insightful piece relating to his learnings from his own children when thinking about the future of digital technologies. Insightful since I realized it was the exact experience I had when my children were (much) younger - I learned SO much from just watching them. It is particularly relevant for investors and entrepreneurs as we look to how the newest technologies are used by those that really don't know any other way. To be honest, I miss those days, but the good news is that it is only a few more years before my grandchildren reach the ages of Joe's children. I look forward to learning and maybe even investing based on a whole new generation. Link to his post: https://lnkd.in/eQxuHDpK

Venture math is tough, so hybrid funds like ours are purpose-built to ensure accredited investors can get exposure to the best managers and then double down on the best individuals deals -- without having to gamble or try (and fail) to market-time singular verticals, industries, stages, vintages, or cycles.

We often get questions on how the math works for a hybrid fund, so... here you go! More detail on fund structure, fees, and DIY substitutes.

Thanks to our friends at CED (Center for Entrepreneurial Development) for featuring Natrx | Adaptive Infrastructure and Lucid Bots at yesterday’s Investor Fly-In!

We’re excited to announce the close of our oversubscribed $100M Fund IV to invest in early-stage frontier science companies! 🎉🎉 Congrats to the team and Phil Grayeski Ph.D., who got promoted to Managing Partner and Patrick Malone, MD PhD , to Partner. 🔥🔥 Excited for the future and sharing our release here: https://lnkd.in/eXhrdxTn

Super excited to launch our new website today! We think/hope you'll find a big upgrade that showcases a lot more detail on our strategy and portfolio, plus easy access to insights and a bunch of ways to connect with us. Big thanks to our friends at Morphic for their help with this launch. If you are a fund or a startup who is looking to check a new brand and website off your list quickly without sacrificing quality, Morphic will be a great partner for you. Please send feedback our way -- we always appreciate it.

TO ANY ENTREPRENEUR SCROLLING, IF YOU STAY CONSISTENT, YOU WILL WIN! 🏆 Last week, SmartWiz.io was announced as the prize winner of Venture Atlanta Conference. I cheered and screamed until I lost my voice lol. But as I sit back and reflect on such a magical day, I think about the work it took to get there. Two years ago, when the idea of Smartwiz was just something in our heads that we couldn’t quite communicate but knew the world needed to hear about, our team would pitch every single day… Yes, you read that right. Every single day, after performing the tasks of the business, we would spend hours working on our pitch. The words we would say, the details of the slides, and most importantly, the presence we would have on stage if anyone gave us the chance. Friends, family, random people walking around—we would take the time to pitch to them all. And let me tell you... The pitch literally made ZERO sense. People would scratch their heads, wondering exactly what the heck we were trying to do lol. But we didn’t care. Every night, we would tweak the pitch based on feedback and go at it again. A lot has happened since those early days of running around, but the mindset has remained the same: Whatever your idea is, work at it every single day—even when you don’t feel like it. Practice makes perfect, and for everyone in the room at Venture Atlanta, you saw a flawless execution of what we’ve been working on in the background for over two years. Thank you again to Venture Atlanta and our Smartwiz team. Success doesn’t come overnight, but we are eager for every day that allows us to work towards that overnight success. P.S. We are hiring 😊! If you have what it takes and want to win, we would love to have you on board! https://lnkd.in/eAFUKmkZ