👋🏾 Hi friends!

I got a little distracted today so apologies this is landing in your inbox a bit late this evening!

It’s been an interesting few weeks, not least because I found my face plastered on advertising units across a certain North London borough 🤩 

A massive shout out to Launchpod Studios where I’ve been recording Nothing Ventured since the beginning of 2023 and who organised this awesomeness and, to Jolt for agreeing to put my (somewhat) smiling face on their charging stations for the next few weeks.

I’m well underway writing about all the things I’ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it 😄.

Now let’s get down to business…

In this weeks Off Balance, I’ll be chatting about:

🎙️ Monik Pham and Reem Wyndham – Founding Partners of Pact on Nothing Ventured.
⏰ Vesting and Reverse Vesting Explained

Don’t just think about diversity, think about cognitive diversity too 💪🏾

I sat down with Monik Pham and Reem Mobassaleh two of the founding team, alongside Tong Gu, behind Pact an early stage VC fund investing in pre-seed and seed stage tech companies addressing the most pressing issues facing future generations across Access, Betterment and Climate.

In this episode, we talked about:

➡️ How unusual to have 3 women come together to found a fund.

➡️ Relevant diversity and cognitive diversity.

➡️ How Monik built a fund at 23 and how that inspired her to do it bigger and better.

➡️ Spending a year talking and deploying their own capital before launching Pact.

➡️ Mixing commercial and impact metrics to understand how one drives the other.

Check out the episode on YouTube, Spotify, Apple or wherever you get your podcasts and don’t forget to rate, subscribe and like 💪🏾

Check it out and let me know what you think!

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Now let’s get into it.

Off Balance

It’s been a pretty bizarre Q1 so far, and even with only a couple of weeks left, I decided to take a look at what might be happening in the world of VC that might explain what I’m seeing.

It’s not a massively detailed analysis by any stretch of the imagination, but it certainly supports what I have been feeling for some time now, I just didn’t have the numbers to back it up…

What’s the story in venture land?

Anyone else found the start of 2024 has been a REAL grind?

I’m hyper focussed on providing support to venture back tech startups and, I’m not gonna lie, this year has started out tough.

🛑 It’s not that we aren’t great at what we do.
🛑 It’s not that founders and startups don’t need our services.
🛑 It’s not even that there has been a bunch of competitors spring up.

It’s simply that fewer businesses are securing funding right now so there are just fewer businesses out there that might need our support.

Let’s put it into perspective.

In the first quarter of 2023, there were 398 deals listed on Crunchbase for startups that had raised a Pre-Seed, Seed, Series A or Series B in that period.

The equivalent number for Q1 2024?

202

Even accepting that we’re not at the end of the quarter and that some deals get announced well past actual investment date, we’re at ~50% of deals funded compared to last year.

Just in case, I checked out deals announced in the period from 1st Jan to 18th March 2023 so I could compare like for like – that was still 355 deals. 2024 is still looking like it’s tracking 44% lower on a like for like basis.

There are a couple of ways you can look at this drop.

There is less cash out there.

There are fewer startups looking for funding.

There has been a change in approach by VCs in what they’ll fund.

It’s widely known that there is a surfeit of capital out there yet to be deployed so I think we can discount that straight away.

I don’t know that there has been a drop in company formation, It may be that some companies have decided to bootstrap and not rely on external funding though I doubt that would account for a 44% drop.

No, the reality is that VCs have really modified their approach to company financing. And from what I am seeing, they are looking for:

➡️ R&D heavy businesses (hardware, deeptech, AI etc.) that can create moats.
➡️ Breakout traction which is an early signal of growth potential.
➡️ Untapped or underserved markets with massive $ value.
➡️ Ventures that can scale without tonnes of new capital.

And this means incredible businesses with immense potential, exactly the sort of companies we love to work with.

Excited for where things are heading 🚀

As always, my office hours are open, if you’d like to chat about this or anything else, just grab some time 😊.

I hope you found Off Balance #30 useful. As always, I’d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know 😊

🚀And that’s a wrap for this edition of Off Balance – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

📨 And if you think someone else might love this, please forward it on to them,

🎧 Finally, if you’re a fan of the Nothing Ventured podcast, please don’t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

That’s it from me so until next time…

Stay liquid 🙂

Aarish