Following last week’s tweet and newsletter, I had the pleasure of jumping on a podcast on 20VC with Harry Stebbings and Jamin Ball (Altimeter).

Here’s a clip from our no-holds-barred, ☕ fueled Sunday morning chat.

I encourage you to listen if you want some hard truths on the discussions that should be happening in board rooms, what questions founders and investors should ask themselves when deciding to keep going or find an alternate path, why the game of musical chairs in M&A is in full swing - yes, we have 5-10 of each enterprise software co in every category, and why 2024 will be one of most epic classes for startups who build lean + mean from inception 🚀!

Get extended 75 minute version on Youtube or listen to the 66 minute version on Apple Podcast or Spotify.

BTW, I want to be 100% clear, this is not a call to shut companies down and quit, more a call to be realistic with one’s company, asking yourself if you still have the energy and conviction to keep going, and if you do, laying out a plan with your board to get there. Just having lots of cash and runway does not cut it. The time is now. Here’s a segment in which I share what that looks like.

And here are some of the 🔑 questions boards and founders should ask. Sometimes when you have that conversation, you’ll find that many founders may feel relieved when investors tell them, it’s ok if we just get our money back. Every company is different, and I just hope if you’re in this situation you have an open and honest dialogue with yourself, team, and board. And if you don’t get a F^%& you, then you’re not doing your job 🤣.

BTW, it’s not all doom and gloom, just creative destruction at its finest and from near death experiences, many companies have risen to become super valuable businesses. Here are a few from the boldstart portfolio 👇🏼

I also believe that the 2024 class of new startups will yield one of the best classes ever when we look back in 5+ years as founders build lean and mean from the start, take the right amount of capital at each round at the right prices without getting way over their skis while leveraging one of the biggest platform shifts in history with AI infused into all enterprise software where it makes sense and where customers will pay for it.

As the wise Kenny Rogers once sang in his famous song The Gambler - Know When to Hold ‘Em, Know When to Fold ‘Em (my original blog post from Feb 2011 here). Here’s an excerpt and it was true then and true as ever now:

Net net, way too many companies have received angel funding and many of these companies will not raise subsequent rounds of funding.

That is ok as that is how markets work.  If you are in this position, all I can say is don’t give up but also be honest with yourself and team.  Assess your strengths and weaknesses, dive into the market and opportunity, and be as lean as possible to give you as much time to get to where you want to go.  If you decide to fight through it and pivot and have the support of your existing investor base then great.  Many companies have been successful that way.  If you decide it is time to move on and capture whatever value you can for the assets then great as well.  Just make sure that you have this conversation with your investors earlier rather than later to ensure you have enough time to execute on the new path. In the end, this process is not unlike what The Gambler from  Kenny Rogers song had to go through at the table.

You got to know when to hold `em, know when to fold `em,
Know when to walk away and know when to run.
You never count your money when you`re sittin` at the table.
There`ll be time enough for countin` when the dealin`s done.

Here’s another story of survival from the dot.com era. This is how one of my former portfolio companies, Greenplum in the data infrastructure space, survived the dot.com crash, sold to EMC and IPOed as Pivotal Software.

Here’s a timely 🧵 from Lenny Ratchitsky on what one can do when stuck.

You can also read more as Jamin covered his extended views from our conversation in his awesome weekly Clouded Judgement:

Clouded Judgement

Clouded Judgement 1.12.24 - Hard Truths

Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Reinventing Founder Friendliness - Back to the Future This week I joined Ed Sim (Founder and Managing Partner at Boldstart Ventures) on…

Read more

a day ago · 70 likes · 1 comment · Jamin Ball

What it comes down to is founder energy, conviction, and realism, and all I’m trying to do is ensure that we all ask the right questions!

As always, 🙏🏼 for reading and please share with your friends and colleagues!

Scaling Startups

1. Resetting of expectations and changing of the guard at Pitch, a beloved presentation software co, which raised $138M of funding with last round at $600M valuation - must read, honest assessment from cofounder Christian Reber

2. Simply ❤️ this from Jeetu, EVP & GM Cisco Security & Collaboration Units on the “Scarcity Illusion Trap” - I encourage you to read it and absorb it.
   
   h/t @alex yampolskiy, co-founder and CEO of Security Scorecard, a portfolio co, who shared with me.

3. This is really good, 🧵 includes handy cheat sheet on expectations for each segment, different sales motions…

Enterprise Tech

1. Why did Invision really fail - was it Figma or something else? Here’s Jess’ take - worth a read as comments are 🔥

2. And Clark one of co-founders chimes in on his view

   And debunks myth that venture is bad and in this case actually helped him capture a large part of market early…

3. Sleeper cells in LLMs - new AI Security risk?

   New Anthropic Paper: Sleeper Agents. We trained LLMs to act secretly malicious. We found that, despite our best efforts at alignment training, deception still slipped through.

4. On the ML Tech Ecosystem in France and why some think it’s 🔥

5. Bitcoin ETFs approved and Franklin Templeton with $1.5 Trillion of assets under management having some fun along with CEO, Jenny Johnson, chiming in with a long 🧵 on all Franklin Templeton has been doing in crypto - building and running node infrastructure, investing in startups.
   
   And ❤️ this closing from Jenny - are we back????
   8/I keep coming back to the idea that blockchain is the future. That’s why we’re positioned the way we are, collaborating with communities and developing deep relationships to help build for the future. We seek to develop, support, and invest in the space in a meaningful way.

Markets

1. Reminder, what seems like a big deal at the moment fades quickly

2. From the JPM earnings call and Jamie Dimon’s view on interest rates (The Transcript)

   $JPM CEO Jamie Dimon: "There is also an ongoing need for increased spending due to the green economy, the restructuring of global supply chains, higher military spending & rising healthcare costs. This may lead inflation to be stickier & rates to be higher than markets expect""