thanedar

7 ms·

31.
by thanedar 4y ago
I'm intentionally not talking about $0-10M "lifestyle businesses" here. I want to split SMB in American terminology into two categories - small businesses ($0-10M) and Mittelstands ($10M-$1B). My focus is the latter. SpaceX i
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by thanedar 4y ago
If I were starting a Mittelstand today, yes one great option would be to take YC's funding, take little to no additional capital, and exit as a Mittelstand with most of your equity. But having gone through YC in W15, they're defin
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by thanedar 4y ago
I mentioned this in another comment - pre-Mittelstand investing is also driven by power-law 100x+ returns. If you invest $100K at <$1M valuation pre-revenue in 100 pre-Mittelstands, 1-5% of those companies are going to get to $100M+, 10-
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by thanedar 4y ago
Pre-Mittelstand investing is also driven by power-law 100x+ returns. Let's say the deal is $100K for 10-20% of pre-revenue/pre-product pre-Mittelstands. You will get 100+ out of 200 businesses that are >1X+, 20+ that are 10X+,
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by thanedar 4y ago
There is an opportunity to invest in these businesses pre-revenue and even pre-product. Pipe doesn't do that. TinySeed is probably the best example of a YC for Mittelstands now. I love what Einar is doing there and am trying to refine
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by thanedar 4y ago
Mittelstands (defined as $10M-$1B in annual revenue) are very stable, profitable companies once they get to that stage. But there are very few funding options for pre-Mittelstand businesses. I would like to create a small fund to invest in
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by thanedar 4y ago
This is a follow-up to my most popular post, We Need a Middle Class for Startups: https://news.ycombinator.com/item?id=31327219 Both of these ideas are on my list of solutions to The World’s Biggest Problems. I want to rais
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Y Combinator for Mittelstands?(neilthanedar.com)
80 points by thanedar 4y ago|71 comments
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by thanedar 4y ago
The key is that Mittelstand businesses are much less likely to fail. (This is why PEs on average outperform VCs. I go into these economics in my post.) This can be the Goldilocks deal for founders where you raise <$5M from angels or PEs
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by thanedar 4y ago
I dig into the economics in the post. The data shows the median VC would get better net IRR returns with a Mittelstand PE strategy. It works because Mittelstand revenue and profitability is much more predictable. If you're on the Midas
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by thanedar 4y ago
I use my own "outline" style to make my posts easier to read fast. The brighter highlights are intended to be the most important points. Is that confusing? I can change the shade of the lighter highlights.
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by thanedar 4y ago
The capital for Mittelstands is in mid market PE funds. Making it "cool" means getting founders who'd otherwise take VC to target PE. It also means convincing these PEs to invest earlier. Thanks for the feedback. I'll tr
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by thanedar 4y ago
I think I actually learned this lesson from my failure to build a billion dollar startup with Labdoor (this story is in the post). We would've been better off raising less money and going for profitability earlier. Labdoor made it to t
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by thanedar 4y ago
I'm trying to split SMB into two categories. Lifestyle small businesses are great too, but I'm really talking about companies with $10M+ revenue potential. You can get top-tier VC returns by building a portfolio of Mittelstand bus
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We need a middle class for startups(neilthanedar.com)
899 points by thanedar 4y ago|305 comments
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Public Ventures: How Governments Can Run VC Funds(neilthanedar.com)
2 points by thanedar 4y ago|0 comments
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by thanedar 12y ago
It seems like the question is talking about large, zero-revenue startups. Ecomom definitely doesn't fit here, since they were collecting over $1M/month in gross revenues. Of course, they were discounting so much that each order ha
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Tech startups: The worst get rich quick scheme ever(neilthanedar.com)
2 points by thanedar 13y ago|0 comments