Hi,
In this week's edition of Fundraising Demystified, I share some insight on the buzz around IPOs.
Also;
📸 - Social Snapshot- the DTC evolution
đź“Š - Step-down acquisitions
🎙️ - Episode 61: VC isn't for everyone w/ MPD
🆓 - A guide to nailing 1st calls with investors
Welcome to issue #97, and happy election day to the US readers!
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Some thoughts on the Direct-to-consumer biz by Feras Khouri on LinkedIn.
Also:
🌟 What incredible pitch decks have in common by Julian Shapiro on X.
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Episode 61: You Don't Have To Raise Venture Capital
Tune in to watch my chat with Mark Peter Davis (MPD) who busts some myths on fundraising and VC. We talk about why most companies shouldn't raise venture capital and the differences between raising capital as a founder vs. a GP. Plus- what makes Interplay unique and how founders can get their attention.
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Data Corner
Valuation step-ups at exit have become rare for US unicorns
According to Pitchbook, when the market dipped in 2022, big acquirers like Salesforce hit a pause on M&A deals, even disbanding their M&A committee. But with deals like Salesforce’s recent $1.9 billion purchase of Own at a steep discount, reluctant buyers are being drawn back in.
But in this market, big discounts are the norm, and founders often have little room to negotiate. VCs are pushing low-performing companies to sell, even at a loss, just to get some capital back. While AI companies are still thriving with rapid capital raises, some are already eyeing exits through acquihire deals, offering their teams lucrative payouts in an uncertain future.
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Raising Capital for your startup?
Thunder's mission is to guide founders toward the right path to reach their North Star, be it through securing equity or debt financing or navigating the path to a successful exit.
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Preparing for the IPO Resurgence: Is Your Startup Ready?
I wanna talk about the IPO—the dream of every founder who’s ever had visions of popping champagne, ringing that bell, splashing their ticker symbol across Times Square, and watching their stock price soar. But really, for the past couple of years, going public hasn't been that fashionable. The market hasn’t exactly been welcoming, and most companies have kept their IPO plans tucked safely away.
But now? There’s talk of a comeback. Some big-name companies like Arm, Birkenstock, and Instacart tested the waters last year. The results have been mixed, but the buzz is growing, and it looks like the IPO freeze might finally be thawing. So, the question is—are you ready to jump in? Or more importantly, should you?
Why IPOs Are Heating Up Again
Volatile markets, inflation, and investor hesitation made going public tricky. But things are shifting—slowly. The economy is stabilizing (fingers crossed), and institutional investors are showing signs of renewed interest. Suddenly, the idea of an IPO doesn’t seem so far-fetched (if you're at that stage).
Plus, the spotlight cast by recent big-ticket IPOs like Reddit's, sparking discussions around public offerings. If the market continues to warm up, we could see more companies jumping in.
Are You IPo-ready?
Going public isn't as simple as slapping together some pitch decks, calling a banker, and picking out your bell-ringing outfit. There's a lot more that goes into it. The hard truth? Not every startup should be considering an IPO right now, even if the markets are warming up.
Here are some things you need to ask yourself before you start dreaming about your stock ticker:
Do You Have the Financials? The public markets demand a level of transparency that private companies aren’t used to. You’ll need robust financials with consistent revenue, profitability (or at least a path to it), and well-managed expenses. If you're still burning through cash faster than you can raise it, now might not be your moment.
Are You Ready for Public Scrutiny? As a private company, you’ve had the luxury of keeping certain things under wraps—like that time you spent way too much on swag at a startup conference. Going public means everything is in the open: your financials, your management decisions, your margins, and your CEO’s tweets. If you're not prepared for that level of scrutiny, the IPO path could be a nightmare.
Can You Tell a Compelling Growth Story? Public investors aren’t just looking at where you are today—they want to know where you're going tomorrow. Having a clear, convincing growth narrative is crucial. If you can’t explain how you’ll dominate your market or expand into new ones, you’ll struggle to attract investor attention post-IPO. And let's be honest, no one wants to be the IPO flop of the year.
Is Your Team Up to the Task? The transition from private to public company is a heavy lift. You'll need a team that knows how to operate in a public company environment—legal, compliance, investor relations, and more. If your current team isn’t up to the challenge, now's the time to start hiring those heavy hitters.
Timing is Everything
Even if you’re convinced your startup is ready, timing is crucial. The market is still cautiously optimistic, but anything could change with a sudden macroeconomic shift. Monitor the market closely, keep an ear to the ground on trends, and don’t rush into an IPO just because it seems like the hot thing to do. I know founders who took the plunge too soon wished they’d waited a little longer.
Hot Take
The IPO market might be warming up again, but it’s not an all-you-can-eat buffet for startups. It's a complex, high-stakes game, and only the well-prepared should step into the ring. If you’re ready to weather the storm of public scrutiny, deliver clear growth, and face the realities of being a public company, an IPO could be your next big move. But if you’re not there yet? There’s no shame in sitting this one out until you’re truly ready to ring that bell.
At least then, you’ll know you’ve earned that champagne.
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