Ben Winokur

The deal was nearly closed. A top-tier VC was ready to sign and wire. Then an early investor killed it... overnight. A founder recently emailed me and my colleague, Andrew Berg (shared with permission), which left me frustrated, sad, and angry. They raised pre-seed capital from a non-traditional investor (think hedge fund manager type) who ironically brands themselves to “partner with founders to build great companies.” The company’s multi-year journey ended, not because of market fit or founder execution, but because of misaligned capital. It’s a painful reminder- who you let on your cap table matters a lot. Get references before you take someone's check! Not all money is long-term aligned. And not all investors play the long game with your best interests in mind. #startups #venturecapital #founderlessons #evilinvestors

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Episode 42 of DualSource Discourse is live! 🎙️ This is a cornucopia episode where Sarah Scudder - ITAM Nerd and I discuss a wide ranging set of topics The episode covers: * Oro's Acquisition of ProcureTech: A surprise move that raised concerns about vendor neutrality and platform trust 🫢 * The surge in AI Investment Surge: Perplexity's rumored $1B raise highlights growing concentration of funding around major players 💵 💶 💷 💴 * Procurement Podcasts Take Off: A surge in content creation, with reflections on format fatigue and what makes a show stick 📻 * Cybersecurity in Multi-Cloud Environments: Google’s acquisition of Wiz and the importance of securing across diverse cloud infrastructures 🔐 Plus much more! Check it out now! 🎧 YouTube: https://lnkd.in/gKvkN7QB Kearney Lance Younger Shakil Nathoo Amanda Prochaska Shachi Rai Gupta S. Michael Cadieux Mark Raffan #DualSourceDiscourse #procurement #makingprocurementcool #supplychain #procuretech #PodcastEpisode

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So yeah – Capital One is acquiring Brex. Big number. Loud headlines. But the interesting part isn’t the card. Capital One didn’t buy a startup-friendly corporate card. They bought infrastructure. Brex quietly moved from “cards for startups” to something much closer to a horizontal spend + payments layer that actually plugs into real finance teams, real ERPs, real controls. That’s the asset. A product banks can distribute without rebuilding it from scratch. Inside the perimeter. On their rails. With their balance sheet. Now compare that to Ramp. Same market. Similar surface area. Very different outcomes (so far). Ramp is still priced as a growth company chasing category ownership. Brex is priced as a product that a bank can absorb. Neither is “wrong” – but only one of those is immediately acquirable. And yes, the irony is strong: Ramp’s founders previously sold a company to Capital One. You really couldn’t script it better. After closing Discover, Capital One now has: – a card network – distribution – underwriting – and a modern spend platform At some point you stop partnering and start owning. $12.3B → $5.15B looks rough if you freeze the chart in 2022. But this is still a real outcome for the founders, the team, and early believers. Brex looked written off more than once. Instead, it pulled off a quiet comeback and a very bankable exit. Guess you can’t Brex the laws of finance forever, eventually you have to Capital One-solid footing. ¯\(ツ)/¯

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Two trends in fundraising that I’m seeing on a daily basis: 1/ The "we'll monetize later" era for infrastructure startups is dead "We'll figure out revenue once we have users" / "we're focused on adoption first"/ "monetization comes later" This worked in 2021. It doesn't work now. Today’s market won’t reward research organizations or companies that believe in perfection over getting it in users' hands. If you don't have a clear path to revenue… you won't get funded. period. VCs aren't writing checks hoping you'll figure it out later. 2/ "Vibe ARR" is everywhere Remember Jasper? hyper growth, but the model companies ate them alive. We're seeing this again. Companies growing really quickly on point-in-time technology that isn't defensible These companies look amazing on paper. Growth charts going up and to the right. But if you think models are getting better and becoming platform companies, many solutions become obsolete. 

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If you look at the early-stage fundraising funnel, conversion rates are tightening, but the companies that do raise are doing so at higher valuations and with larger checks. The market seems to be betting on fewer winners, but those winners will be bigger. I’m not convinced. I do believe the very biggest winners will be larger than ever as AI expands the reach of technology, largely by replacing labor. But I don’t believe there will be fewer winners overall. Most B2B solutions are moving toward verticalized, specialized use cases that deliver superior value compared to generalized horizontal platforms. That shift should create more winners. While these vertical players may not reach the scale of the horizontal mega-winners, they can still generate the kind of multibillion-dollar outcomes that venture is built to fund.

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Yes, I’ve read the Culper short report on AppLovin. My thoughts: No, it’s not revelatory. Pre-loads and one-click installs on Android are common practice. Digital Turbine and ironSource offer similar products. App developers pay on app open. In fact, there’s no way to confirm the install absent an open. AppLovin also offers ROAS bidding. The notion that Google Play would be unaware of any malicious activity by AppLovin, the largest in-app broker ad network, is not credible. AppLovin is more than a decade old. Just because you’ve never heard of it doesn’t mean it’s a young company. Regarding front-running Meta spend: given the scale of AppLovin’s eCommerce advertisers’ Meta spend, they can necessarily measure incrementality. They wouldn’t scale on AppLovin if they didn’t see incrementality. I also don’t see how genuine front-running would be possible in an auction for in-app inventory. Further, it’s obvious why performance across the channels would be correlated. Full disclosure: I have a small, long-dated call position on AppLovin that amounts to <5% of my PA (notional). I have no commercial relationship with the company.

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jensen called the idea that enterprise cos will rip+replace software 'illogical' and he's right. no one wants to vibe code their payroll - software is 8-10% of enterprise budgets & for most companies the compliance risk of rebuilding mission-critical systems far outweighs the software savings

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We don't believe in budgeting at Clay. That might seem crazy for a $100M+ company with nine figures in the bank. It kind of is. But budgets give people a target. And targets become ceilings. I've seen so many companies where a team gets to November with a great idea, but they've already spent their number. So they don't do it. That's very zero sum. That's not the culture we want to build at Clay. We want to create owners. So, I sat down with our Head of Finance Karan Parekh to break down how it actually works. I think this is the most non-boring 6 minutes ever recorded on startup budgeting. Some of what we get into: - Karan's "non-budget budgeting" framework and the questions he asks every team instead of handing them a number - The real cost of no budgets. Yes, sometimes there are vendor overages and duplicates. We just found one costing us $10,000 a month. That's not nothing. - Why no budgets does NOT mean running the ship blind; we check in with every operating leader every month - What actually changes if you go public (less than you think!) - Why this approach works for us but might not work for you We hope our approach can be helpful to other teams figuring out how to set up and run a finance team at this scale, and still enable teams to move with urgency. Take a watch below and let us know what you think 👇

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Excited to share a new blog post I co-wrote with Patrick McClanahan on the evolving landscape of #VerticalSaaS! As Vertical SaaS companies navigate limited market sizes, sustainable growth comes down to two key levers: expanding the customer base and deepening monetization. From embedded payments to AI-powered workflow automation, industry leaders like Shopify, Toast, and Clio - Cloud-Based Legal Technology are using AI to enhance user experiences and unlock new revenue streams. The future of Vertical SaaS is intelligent, adaptive, and built on deep domain expertise—and AI is accelerating that shift. A few of our takeaways: 📈Vertical SaaS Growth: SAM/SOM growth comes from serving new customers and deepening monetization 🤝Proven Strategies: In the past, leading companies grew their addressable market with strategies like integrated payments and ecosystem integrations 💡AI Opportunity: AI enables Vertical SaaS to reach previously unreachable workflows and solve new pain points, growing SAM and share of wallet 🏆Moving Beyond Service Providers: In the future, the most successful Vertical SaaS companies will leverage intelligence and automation to move from service providers to AI-enabled advisors and co-pilots Check out the full post and let us know what you think!  https://lnkd.in/g3vipcKq #VerticalSaaS #AI #GrowthStrategies #SaaS Fika Ventures

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Seed VC isn’t just in a downturn—it’s facing extinction unless it evolves fast. Great read from Rob Go & David Beisel at NextView Ventures... - YC and mega-funds now dominate the early-stage landscape, squeezing out traditional seed investors - Power law thinking has gone mainstream—everyone’s chasing trillion-dollar outliers - AI isn’t helping seed VCs—it’s raising the stakes, crowding the field, and disrupting VC itself - The middle of the market has collapsed, and excess profits are gone - Hope isn’t a strategy—seed needs a new model, now Link here... https://lnkd.in/ek2MZGhm And if you like this topic, I wrote a piece on venture bifurcating into inception funds and mega funds here: https://lnkd.in/eJz5DmX6 #ai #venturecapital #vc

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💡Emerging GP Fundraising Insight #8: Rolling Closes Keep You Moving Small funds can't always afford to sit still until the target is hit. Rolling closes let you start deploying earlier, build a track record, and show momentum to prospective LPs. One GP told me that for Fund I ($5M target), he took capital as it came, signed, wired, and got to work. It wasn't perfect, but it kept the lights on and the deals moving. Sometimes the "sign and wire as it comes" approach is the only way to get moving. Takeaway: Momentum is a fundraising asset and rolling closes can help you keep it. Has anyone here used rolling closes as a strategic advantage?

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We spent months trying to sell debt repayment companies on debit card rails. Zero traction. Complete waste of time. Then we interviewed target customers more deeply. Turns out debt repayment companies didn't need new payment rails. They needed ACH that actually worked for their specific workflows. Custom scheduling. Exception reporting. Data elements that matched their existing systems. So we rebuilt our ACH processing from the ground up. Made it work exactly how debt repayment operations needed it to work. The volume doubled on ACH alone. Only then did those same companies start asking about modern payment options. Once we'd solved their real operational problems, they trusted us with the new stuff. The pattern holds across every vertical we've entered. Fix the boring, critical stuff first. Make their existing processes work better. Earn the right to introduce innovation.

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