Happy Friday.
Venture Capital 3.0
The venture capital (VC) industry is entering its third major epoch, marking a radical shift from its cottage industry roots and software-focused adolescence. Today's VC 3.0 is defined by true market ubiquity, as venture dollars flow beyond traditional software into sectors like defense, biotech and space, while simultaneously expanding internationally at an unprecedented pace. The emergence of 20+ mega multi-stage funds (like Sequoia, A16Z and Greylock) signals we've entered the incumbent phase, where intense competition at later stages will drive down returns and blur the lines between VC and private equity. Traditional software investments, which fueled VC's explosive growth since 1994 with relatively easy 100x returns, will become increasingly rare as VCs must adapt to grittier, more complex sectors. Artificial intelligence (AI) is fundamentally reshaping how VCs operate — from deal sourcing and analysis to decision-making and portfolio support — enabling firms to process more deals but potentially eliminating their information advantages. As valuations climb and competition intensifies, VCs must transform from pure value creators into efficiency experts, potentially leading to more challenging dynamics for founders in terms of control and operational oversight. For founders, this transformation is a double-edged sword: While access to capital and higher valuations have never been better, they'll face both increased competition from well-funded rivals and potentially more demanding investors who expect faster paths to profitability. NFX (16 minutes)
Press For Champagne
Would you believe that Britain's highest-selling champagne venue isn't winning because of their selection or prices but because of a simple button? Bob Bob Ricard, a London restaurant, has mastered the art of reducing friction with their ingenious "Press for Champagne" button at every table, eliminating the awkward dance of flagging down servers or second-guessing another glass. This brilliantly simple insight reveals a profound truth about human behavior: We don't always do what we want; we do what's easiest. What unnecessary friction points are you maintaining in your product, and what "champagne buttons" could transform your conversion rates overnight? Ozan Varol (5 minutes)
Ads on Tik Tok
Think TikTok is just for dancing teens? From sophisticated pixel tracking to seamless ecommerce integrations, this comprehensive guide reveals why founders are leveraging TikTok's 1 billion users across 154 countries to drive unprecedented conversion rates and customer acquisition. While the platform rewards authenticity over polished perfection, its real power lies in its sophisticated tracking capabilities, including the updated 2024 TikTok Pixel and comprehensive attribution windows that bridge the gap between engagement and sales. TikTok's unmatched ability to convert Gen Z audiences (who control 40% of global consumer spending) through diverse ad formats like in-feed videos, TopView ads and live shopping experiences makes it an essential channel for modern growth strategies. For founders weighing the investment, the platform's true advantage isn't just its reach — it's the ability to turn viral moments into measurable business outcomes through advanced tracking and ecommerce integrations that traditional platforms can't match. Search Engine Land (20 minutes)
Founder FAQ: What’s the Difference Between an Exempt and Non-Exempt Employee?
Think that paying everyone a salary makes them exempt from overtime? This common startup misconception could cost you thousands in back pay and legal penalties. Federal law requires a sophisticated three-part analysis of job duties, salary levels and payment methods to properly classify employees as exempt or nonexempt, with each category carrying distinct obligations around overtime pay and minimum wage requirements. Beyond the baseline salary requirement of $684 per week, exempt employees must fit specific executive, administrative or professional exemptions —- and job titles alone won't protect you from misclassification penalties. For startup founders navigating rapid growth, getting this classification right from the start isn't just about compliance — it's about building a sustainable foundation that won't crumble under regulatory scrutiny. Westaway (11 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Convertible Note: Guide / Video
Certainty in an Uncertain World
The startup journey is filled with uncertainty. A fractional General Counsel (GC) provides the certainty of on-call legal expertise. Having an experienced GC gives founders invaluable peace of mind. With a seasoned startup legal expert on demand, founders have a steady guide through uncertain legal terrain. The GC acts as a trusted strategic advisor while handling day-to-day legal tasks. This lifts a huge burden off of startup leaders, allowing them to focus on growth with legal confidence. Rather than getting bogged down in legal details, founders feel empowered delegating tasks to an expert and focusing on their vision. Founders sleep better knowing their GC can swiftly handle any legal issue that arises. If you’re curious how a fractional GC can give you peace of mind, let’s talk.