Plexo Capital

Last week, we gathered at the beautiful CapitalG office in San Francisco for our Plexo Capital Summit 2024, and we could not be more thrilled with the turnout and energy from everyone who joined us! It was inspiring to see so many LPs, GPs, entrepreneurs, and friends of Plexo Capital come together, share ideas and celebrate our shared mission. This year’s summit was particularly powerful, as we welcomed both new and returning members of the Plexo Foundation’s GPx Cohorts, providing five GPs the platform to showcase their work and connect with our LP network. We were also privileged to hear from three outstanding speakers who shared their unique insights: Sayiddah M., MacArthur Foundation "A Genius Mission" Sayiddah discussed her thesis for investing at the MacArthur Foundation and her deep passion for the arts, shedding light on her unique approach to philanthropy and social impact. Ira Ehrenpreis, DBL Partners "Redefining Impact Investing" Ira shared his perspective on the generational shift in impact investing, showing how DBL Partners converges traditional venture-scale returns with meaningful social impact. Nnamdi Iregbulem, Lightspeed "Seed Valuations Aren’t Valuations" Nnamdi explored the complex nature of seed valuations, offering insight into the often mysterious drivers behind early-stage valuations in the venture capital space. Nnamdi's Blog post: https://bit.ly/4e3mn0r A heartfelt thanks to our sponsors and partners: - CapitalG for graciously hosting us at their beautiful Ferry Building space The MacArthur Foundation, IQ-EQ + Fenwick & West for their support of the Plexo Capital Summit - Our amazing LPs in attendance: Cisco Investments, Ford Foundation, MassMutual, Alphabet Inc., Kapor Capital, Thurman White, Barry Lawson Williams + Ira Ehrenpreis - The service providers who work tirelessly behind the scenes: Fenwick, IQ-EQ, KPMG + Cooley LLP - Other institutional LPs allocating to emerging managers in VC: Blueprint Capital Advisors LLC, Northwestern University, SamCERA + ALTA HOLDINGS - And the many donors supporting the Plexo Foundation, including Alphabet Inc., IIE.vc, the Ford Foundation, Cisco, Practical Venture Capital + Silicon Valley Bank A special shoutout to Jennifer P. Hopp, who leads the Plexo Foundation’s GPx program, along with Sam Toney and Kuji Chahal for their dedication in supporting the Plexo Capital GP Network. Finally, I want to give a special thanks to Allison Caragan from CapitalG for all her hard work behind the scenes. Thank you to everyone who made the 2024 Summit unforgettable. Your support drives us forward, and we can not wait to see what we will accomplish together in the coming year. Here’s to the continued growth of the Plexo Capital community! #venturecapital #emergingmanagers

I am so happy that Plexo Capital portfolio company Portex, led by the exceptionally talented Brittany Ennix, is now out of stealth mode. Brittany and I first met when she was working with Chris Bennett, and I was immediately struck by her passion and drive in her role...it was clear that there were big things in her future. Leveraging her experience in logistics from world class companies such as Uber and Flexport, Brittany started Portex to empower small-to-mid-sized businesses to connect with freight partners and manage shipments and operations in one place. World class investors saw the opportunity and knew that Brittany was best entrepreneur to lead the company. As a result, she was able to raise a $6.25M seed round led by Footwork with a syndicate that includes Base10 Partners (Plexo Capital GP), Cowboy Ventures + Susa Ventures. Congrats to Brittany and her amazing team!!! 🎉 🎉 🎉 https://lnkd.in/gjCrtnzv #startup #technology #venturecapital

This year, RSA saw some exciting announcements by Cisco in the area of AI. Since software has "eaten the world," every company needs to think about AI not only for productivity but also for infrastructure, with security being an important component. Cisco is leading the way, and we are proud Plexo Capital is a partner with Cisco Investments. Here are some of the major announcements made by Cisco at the RSA Conference 2024: - Cisco XDR Integration with Splunk: Leveraging Splunk's broad security telemetry for enhanced threat detection after Cisco's acquisition of Splunk.    - Hypershield Update: New capabilities to detect and stop attacks exploiting unknown vulnerabilities using AI to analyze process execution patterns. - Duo Security Authentication Improvements: Updates to reduce "MFA fatigue" by tracking sessions at the operating system level, eliminating the need for continual user re-authentication. - AI Assistant for Security in XDR: Introduction of an AI Assistant providing contextual insights and recommended actions within the Cisco XDR platform. - Splunk Asset and Risk Intelligence: A new offering to improve visibility into security risks by correlating data from various devices, tools, and environments. We look forward to more announcements and working with the team at Cisco Investments to find the next generation of startups for investment. #CiscoInvests #AspireFund #VentureCapital https://lnkd.in/gUrqAiPv

One of my favorite weeks of the entire year in Los Angeles is the week of the Milken Institute Global Conference. This year was absolutely incredible with so many people in town to convene around topics including global financial markets, diversity, equity and inclusion (DEI), geopolitics, public policy and the environment. At Plexo Capital, we always find Milken Global a great time to connect with colleagues, members of the Plexo Capital General Partner (GP) Network and the generous supporters of our funds and the Plexo Foundation. This year, we hosted our third annual reception and had an amazing group of limited partners from the Plexo Capital Limited Partner (LP) Network. We enjoyed great conversation over drinks and food with contemporary art as the backdrop. In addition, Jennifer P. Hopp, the interim executive director of the Plexo Foundation, talked with Aaron Samuels about his experience with the GPx program and how it was helpful for him from both a coaching and fundraising perspective. I was also able to have a fireside chat with Jeremiah Gordon, the General Counsel of CapitalG, who is also a member of the Plexo Capital LP Advisory Committee. We had a great discussion that the group found engaging. The Milken Institute Global Conference provides an invaluable opportunity to strengthen connections, share knowledge, and gain new insights. It's always a highlight of the year for Plexo Capital, and we look forward to continuing to participate in and contribute to this important gathering of minds. Thanks to all who attended and made it a special event including: Plexo Capital LPs: Ford Foundation - Gerald P. + Nathan Eskender Alphabet Inc. - Jeremiah Gordon Hearst Ventures - Scott English Hampton University - represented by Keon T. Holmes, CFA Plexo Foundation Donors/Partners: Milken Institute - Nicole Valentine + Troy Duffie IIE.VC - chris trinetti SVB - Tosh E. Ford Foundation Alphabet Inc. #MIGlobal #MilkenInstitute #LimitedPartner

Before the Fab Co-Creation Studio Ventures panel yesterday, I was able to digest some data from a very informative article written by the team at Forerunner Ventures on the attractiveness of VC backed consumer companies relative to VC backed enterprise companies (dataset is 12,000+ companies that raised a Series B since 2010 which translated into 3,100+ consumer and 4,600+ enterprise companies). Some highlights from the article: 1/ Consumer had a higher conversion rate to IPO after Series B -> Consumer companies converted at 1.69% (or 88 companies) while enterprise converted at 1.50% (82 companies) 2/ Consumer companies had a better Rule of 40 (growth rate + profit margin where 40+ is good; this metric is a staple in enterprise investing) -> Consumer companies from the analysis landed at 52% with enterprise at 32%; also, 62% of consumer companies were above 40% compared to 44% of enterprise companies landing above the 40% benchmark 3/ Consumer companies had a higher valuation at IPO -> 18.8% of consumer companies had a valuation above $10B while only 9.6% of enterprise companies exceeded $10B at IPO 4/ Timeline to go public was shorter for consumer companies -> The median timeline for IPO from founding for consumer companies was 76 months compared to 78 months for enterprise companies. Very interesting data given how investors, specifically generalists, have moved away from consumer. That movement is understood given how difficult it can be to identify consumer companies that will become outliers + the pressure for consumer’s scarce dollars with more expensive economies (luxury excluded :). Nonetheless, the data shows when investors get consumer correct, the payoff is meaningful. https://lnkd.in/g5kGyitG

On Thursday, Reddit (Plexo Capital portfolio company) will enter the public markets via an IPO and watched very closely by individual investors, institutional investors (both public and private), venture capitalists and CEOs of private (venture backed) tech companies. The journey for Reddit to the public market has been a long road, which in many ways is emblematic of the potential opening of the IPO window. Since the height of the IPO window in 2021 when 1,035 companies went public in the US, only 335 companies went public in 2022 + 2023 combined. So far this year, there have been only 33 IPOs. IPOs are critical for the venture capital (VC) ecosystem as they provide liquidity to the VCs. That liquidity is also beneficial to the institutions who invest into VC funds (known as limited partners or LPs). These LPs will often reinvest proceeds received back into other venture capital funds. Therefore, IPOS not only provide a return on investment but also free up cash for more VC investments. Reddit will be watched closely for many reasons; however, there are two important factors many will track: 1/ the company’s stock performance (both at IPO and longer term) + 2/ the company’s financial performance. Obviously, the two are related, but the most recent information is available in the S-1 filing for the company’s performance, so we will see how investors react to it at the IPO. Looking at the numbers, Reddit closed 2023 with $804M in revenue, which is a 21% increase over 2022. Reddit’s primary source of revenue is advertising and monetized its users at an average revenue of $12.31 in 2023 (average revenue per active user or ARPU). However, Reddit is not yet profitable and lost $90.8M in 2023. For comparison, Snap’s revenue for 2023 was $4,606M with an ARPU of $11.49 (please see the comments for a chart of comparable companies in the social media space). Reddit is expected to price between $5B and $6.5B. If the IPO is priced at the high end of the range, then the revenue multiple would be 8.1. The revenue multiple of Snap is 4.0 while Meta comes in at 9.4. It is important to note that the last valuation of Reddit in the private markets was ~$10B, so even at the high end of the range, the valuation is off 35%. Pinterest was the last social media company to go public, which happened in 2019. Pinterest went public at a valuation of $10B which was down from its last private market valuation of $12B (17% decline). At the end of 2018, Pinterest had revenue of $756M, so the revenue multiple was 13.2, and a loss of $63M at that time. A successful Reddit IPO alone will not open the IPO window. There are many highly anticipated companies in the IPO pipeline (e.g., Stripe, Databricks + Turo to name a few), and we need to see solid performance from many companies to return to normalcy (or a new normal). That said, if Reddit stumbles, that will likely induce more damage to the IPO market than a successful IPO will provide support. #reddit #ipo #VC

The Milken Institute and Plexo Capital hosted an intimate dinner last evening with allocators + GPs. Our main topic was the Milken Institute’s initiative around Inclusive Capitalism lead by Blair C. Smith, Troy Duffie and Melanie S. We had an amazing conversation with so many great points to follow up and explore. Thanks to everyone who made it out on short notice in the LA rain! Read more about the initiative here: https://lnkd.in/grbFXhGP #milkeninstitute #venturecapital #longla

💡 Charmel Maynard became the Chief Investment Officer of University of Miami at 32, becoming one of the youngest CIO’s of an endowment nationwide. 🎤 How did Charmel achieve this? I interviewed Charmel on this and: 1️⃣ Whether VCs can raise via Zoom 2️⃣ Whether DPI is overrated? 3️⃣ How LPs and GPs can leverage geography Video clip below - Sound on. Click “+ Follow” by my name to see more clips. P.S. Link to full episode in comments.   #VentureCapital #VC #Startups #OpenLP Turpentine