Punch Capital

What compelled us to write a check in JustPaid.io? I got to know the founding team, two of whom exited their businesses - one (Daniel Kivatinos) having earned a spot on Y Combinator’s Top 100 Exits list via selling DrChrono for $200M! They possess domain expertise, have chemistry as former colleagues, and were hungry to find JustPaid to address pain points they had personally encountered. JustPaid operates in the massive market of AI revenue ops. Their noble mission is to empower businesses with insight and oversight that simply hasn’t yet existed! Check out founder Anelya Grant in AI Business here: https://lnkd.in/dNkzpTjg. We were fortunate to invest alongside Y Combinator, Kleiner Perkins partner Mamoon Hamid, Josh Buckley, ex-SAP global head of digital marketing Matt McGill, and Dropbox founder Arash Ferdowsi. Watch them continue to release integrations and increase functionality to support a wider swath of customers. They just launched a finance AP and AI agent, too!

Why did we invest in Deasie? We met CEO Reece Griffiths before last summer’s Y Combinator Demo Day and were astounded by his sales presence and high energy. They had a compelling distribution approach, and it didn’t hurt that they had backing from General Catalyst and the founder of QuantumBlack, AI by McKinsey, McKinsey’s flagship AI product. Deasie operates in a multibillion-dollar market of enterprise AI, and they’re committed to making unstructured data more reliable via their automated labeling workflow. Check out their Techcrunch press release here: https://lnkd.in/dm_56ShV. Founders Reece Griffiths, Leonard Platzer, and Mikko Peiponen hail from the likes of McKinsey, MIT, Amazon, and Cambridge - and their engineering team are no slouches either! Watch them become more robust over time to serve enterprise clientele across verticals!

How did doola grab our attention? We come across founder Arjun Mahadevan during his seed raise while at my previous fund, and he left an impression as a sharp communicator who could run a process. doola is on a mission to help 1B people create their dream US business and democratize access to the American financial ecosystem. Check out their NYSE appearance here: https://lnkd.in/dPdjU-Qr. Founder Arjun Mahadevan has a high degree of self-belief. He’s insatiably curious and optimistic. He’s disciplined and believes in how execution compounds. What holds for the future? doola is soon launching borderless banking via a US account. Keep your eyes on them! Punch Capital doola

Shane Sabine writes: The human brain is wired to respond to stories. We've been telling each other tales for thousands of years. A story engages both emotion and logic. Let’s understand the emotion-engaging side of pitching. As a startup, your pitch deck offers the chance to create a great first impression. A compelling deck can be a key difference-maker in a young company's journey of raising investor capital. But what turns a good deck into a great one? Storytelling. The most effective pitch decks don't just present facts and figures. They tell a story that captures investors' interest and imagination. The story brings the startup's mission to life and gets stakeholders invested both financially and emotionally. Take Airbnb's first pitch deck in 2008. It opened not with market validation or financial projections, but with a dramatic story of its founders renting out air beds to make their rent. This anecdote established the startup's scrappy roots and people-first ethos. It hooked investors on Airbnb's against-the-odds origin story. Craft a hero's journey that investors can envision joining. Use storyboarding techniques to map out the narrative before creating slides. And remember - data supports but the story sells. An engaging storyline in your pitch deck can determine how easy or hard your fundraising journey can be. Don't just tell investors what your startup does. Show them through stories how it improves people's lives. Appeal to their emotions as well as their wallets. Craft a narrative arc that builds excitement leading up to your ask. Make your startup's mission relatable yet aspirational. Your goal should be to get the investors as excited about your startup as you are. This can be achieved only if they understand the problem you’re trying to solve and why your solution and your team are the right fit to solve it. They should be able to look at your vision through your eyes. In the end, storytelling sticks with investors long after the slides fade. So put on your storyteller's hat when creating your pitch deck. Spin that startup fairy tale, and your startup may get its happily ever after.

A startup needn't solve a complex problem to succeed. Let's dissect Linktree as a shining example: The Problem: Insta only allows one link in a profile bio. The Solution: Linktree offers a single link that aggregates all your links over Instagram. Linktree operates on a tiered subscription model with four plans: Free ($0 monthly), Starter ($5), Pro ($9), and Premium ($24). Their current valuation, you ask? $1.3 billion. So, what worked in their favor? 1. Solving a Specific Pain Point: Linktree created a solution for a particular problem many people had. 2. Freemium Model: The freemium model lets startups provide value early on without asking for anything in return. This builds trust and a bond with users. When users are ready to upgrade, they’ll think of you first because they already like and trust your product. 3. Flywheel Effect - Viral Growth: Linktree’s viral growth was straightforward: when someone used Linktree, all their social media followers saw it. Followers who clicked the Linktree link would see a cool landing page with all the links and realize they could create their own for free. Boom - viral loop achieved. 4. Incentives for User Engagement: There’s nothing more powerful than a cool dashboard that allows you to see how your audience is growing and how your potential clients are interacting. Linktree understood this early and built an analytics suite to track clicks and views. 5. Fast Iteration on User Feedback: I love this, and you should definitely consider it if you're a founder. Linktree had a Slack channel for user feedback and used Productboard to rank feature requests. Features requested more often were given higher priority. This approach allowed them to iterate quickly and effectively.

What do your startup and a wildlife ecosystem have in common? Consider Indian leopards, which thrive in grasslands. Imagine a grassland area where the leopard population is healthy. As an indicator species, the health of these leopards reflects the overall health of the entire ecosystem. So far, the ecosystem appears excellent. Now, let’s focus on the deer, the primary prey for leopards in this grassland. Initially, the deer population was thriving, supporting the leopards. But suddenly, a contagious disease devastates the deer population, bringing it to critically low levels. What happens next? If you weren’t monitoring the deer, you might not realize the leopards are at risk until it’s too late. Leopards begin starving, and you lose a significant portion of their population before recognizing the underlying problem. The health of any ecosystem can be gauged by tracking key species and understanding their interrelationships. The same principle applies to your startup metrics. A startup is like an ecosystem, and your metrics are the species within it. If you only focus on your north star metric without tracking its contributing factors, you may miss crucial signals that indicate trouble.

Founders Should Pitch Like Doctors Founders/CXOs = Doctors. Investors/VCs = Patients. Just as a well-informed doctor explains health issues to a patient, founders must be able to articulate the problem statement and solution to investors. Investors will ask counter-questions to understand the situation better. If a doctor gives confusing answers, the patient loses confidence. Similarly, investors need clear, confident, and direct responses. Key traits: - Confidence - Clarity - To the point Be the doctor of your startup. Know it inside out. These green flags are what investors

Recently our Managing Partner Shane Sabine was in Marbella on an exciting roundtable about ‘Building Financial Bridges: The Role of Investors in Entrepreneurial Success.' Summarizing his thoughts below on the topic of smart money: 1. Smart money is money that will actually help *drive returns*. 2. ⁠Dumb money *thinks too highly of itself*. 3. ⁠The immigrant founders we back are often rags to riches, and they want people who know how to generate returns. Naval Ravikant says *money is a form of energy, which implies it must be thoughtfully managed and that execution is involved*. 4. ⁠In VC, *you’re only as good as your last day* as it’s so competitive and changing. 5. ⁠VC is driven by the *power law*, so only the deals at the tail end of the bell curve might materialize and are worth fighting for. 6. ⁠Therefore, it feels odd, but sometimes *you’re selling yourself* to the entrepreneurs to take your money. 7. ⁠We carefully take an *unobtrusive yet active* approach meaning we don’t bother but will happily help when called upon - by *responding to asks in founders’ monthly email newsletters*, for example. 8. ⁠We don’t lead rounds and are therefore quiet champions of our companies most of the time. *Smart money knows to let the entrepreneurs lead their own companies*. 9. ⁠Dumb money will often be extractive by requiring burdensome diligence, providing milestone-based capital in tranches, and demanding too much ownership. That’s counter-productive because *the founders lack incentive to build unicorns* that way. 10. ⁠However, *smart money is at risk of becoming dumb* given humans can *get caught up in hysteria*. Refer to all of the *zombie companies from the ZIRP era*, for example. 11. It’s a small industry, and brand can go a long way. You can become smart money by intentionally hustling and positioning yourself - but *it takes time to compound!* Thanks to Startup Olé Accelerator for having us on stage.

A wrong interpretation of North Star Metric can turn out to be a disaster for amateur entrepreneurs. While defining your North Star Metric is essential, remember it’s an 'output metric.' It’s crucial to distinguish between output and input metrics. Output Metrics: Represent results (e.g., $6M in revenue, 100k weekly active users). Input Metrics: Represent actions (e.g., 10,000 pageviews, 1,200 registrations). Output metrics set long-term goals but are not actionable on their own. They’re like the scoreboard. To win, focus on the input metrics – the plays that drive the score. Focus on actions, not just results. #punchcapital #punchcap #immigrantfounders #funding #investment #startup #startups #founder #founders #venturecapital #venturecapitalist

A startup founder should think like a hitchhiker: finding the next free ride is more important than reaching the destination. Achieving a goal is just a byproduct of “following the process.” #punchcapital #punchcap #immigrantfounders #funding #investment #startup #startups #founder #founders #venturecapital #venturecapitalist