Ken Horenstein

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

31

8 Comments

🚀 Venture Capital Strategies with Martin Tobias! Dive into the Pacific Northwest venture capital scene with our latest episode of "Sound Investments." I spoke with Martin Tobias, Managing Partner at Incisive Ventures, to explore unique investment philosophies, tech trends, and transformative strategies in the B2B software space. Whether you're an aspiring founder or seasoned investor, you’ll enjoy this insightful discussion! 🎙️ Listen now: https://pod.fo/e/2bf291 #VentureCapital #Podcast #Seattle

77

2 Comments

💡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?

29

13 Comments

Over the past few years, fundraising has become significantly tougher, especially for smaller funds. This, unfortunately, is the case even for VCs delivering solid returns. In my recent Crunchbase piece, I talk about how emerging managers can survive (and even thrive!) in a challenging fundraising environment. I discuss why the process today is more about familiarity than performance, and highlight places where managers should look for capital that others ignore. Check out the full column via link in comments. Curious to hear from other managers who have recently raised successfully. Which part of this rings true?

72

4 Comments

What Our Top Performing Investments at SpringTide Ventures Have in Common Our most transformative healthcare startups, including PathologyWatch, OpenLoop, IgniteData, and Tava Health, all share three traits in common: 1. Cheetah CEOs These CEOs are exceptional at: ✅ Speed without chaos. They move fast—but never at the expense of execution. ✅ Hiring with precision. They don’t just hire for skills; they hire for speed and alignment. ✅ Betting bold. They go where legacy players have overcomplicated things for decades—and they simplify. They don’t wait. They don’t overthink. They act and embrace the process of failing quickly, often, and cheaply. They learn from these failures to iterate at rapid speed and quickly orient their way to the north star of success more nimbly than others. 2. No Unpaid Pilots The single biggest trap in healthcare venturing may well be the unpaid pilot. It’s a slow death. Months—sometimes years—of proving your value with nothing to show for it. The best founders? They refuse. They find a way to generate real revenue immediately. They structure deals that prove their worth—without giving away their product for free. They don’t waste time on handshakes that lead nowhere. 3. Integrated Solutions Win Point solutions don’t win in healthcare anymore. The best startups don’t just build products. They build systems. They understand the bigger picture—the way everything connects. They integrate seamlessly into existing workflows instead of fighting them. They don’t just add value—they make their solution the only viable choice. This integration often comes with lower margins in the early years of finding and building out product Market fit, but we gladly accept lower margins for such ambitious visions. Healthcare is brutal. Most startups don’t make it. But the bestredefine their categories. They’re led by Cheetah CEOs like Daniel Lambert, Jon Lensing, Zach Taft, MBA, and Dallen Allred—founders who execute relentlessly, think in integrated solutions, and get to real revenue fast.

109

7 Comments

Early founders & VCs over-value TAM. But the TRUE startup killer is under-valuing the wedge. It’s one of the most common fail-points we see at Euclid. Why? When you're building a vertical wedge product, the goal isn't to capture with a billion-dollar TAM. It's to earn the right to expand into one, fast. The TAM day zero founders should worry about most is 𝘛𝘰𝘵𝘢𝘭 𝘈𝘵𝘵𝘢𝘪𝘯𝘢𝘣𝘭𝘦 𝘔𝘰𝘮𝘦𝘯𝘵𝘶𝘮. Some truths we’ve learned backing dozens vertical software startups from inception: 1. Legendary vertical platforms often begin with TAMs <$500M 2. Their “small” markets hide desperate unmet workflows, plus deep fragmentation or high long-term ACV potential 3. Great wedges = a specific persona + job to be done + deep ties to a big workflow + ServiceTitan started with a desktop app for managing HVAC tech paperwork. + Mindbody started as a booking tool for boutique fitness studios. + Veeva started by making existing CRMs compliant for pharma reps. + Abridge started with an iOS app to summarize patient-doctor convos. Each wedge was specific, urgent, and extensible. They didn’t find product-market fit. They 𝘧𝘰𝘳𝘤𝘦𝘥 it—by obsessing over one workflow + expanding after clear success. So here’s the real question for vertical founders (and VCs) at the earliest stage: Pre-revenue, what gives you conviction in a wedge's potential for momentum?

133

23 Comments

I recently sat down with Josh R., Co-Founder & CEO of Gusto, for a fireside chat at Afore Capital's Pre-Seed Summit.   Gusto is a testament to solid fundamentals. We partnered at the Series B over a decade ago (Jason Green). Since then, they've steadily built a business that's amassed more ARR than Cursor, Lovable, and Harvey combined, is executing profitably, making accretive acquisitions and integrating the latest in GenAI to improve their stack.   Here are 5 tips Josh shared for early-stage founders with similar goals:   1. Start with co-founder selection, not the problem   Unlike most founders who begin by identifying a problem to solve, Josh prioritized finding co-founders based on relationship quality and complement. The investment in those relationships has paid dividends—their families are so close that the founders' moms have a group text thread.   2. Problem authenticity accelerates product-market fit   Josh and his co-founders had experienced payroll pain firsthand at previous startups. I've observed this same pattern repeatedly with portfolio founders who reach PMF fastest. Austin Hughes at Unify knew the GTM space from his work at Ramp. Eric S. Yuan was VP of Engineering at Webex before founding Zoom. Authentic problem experience creates both passion and expertise that compound over time.   3. Sequence your biggest risks first   When Josh started Gusto, he took a methodical approach to de-risking. Before burning cash on frontend or go-to-market, they built the backend systems—tax calculations, payments, and all the complex infrastructure. Then they manually tested these systems at friends' companies to validate that they worked before building front end. This sequential risk management helped proved technical feasibility before they committed resources elsewhere.   4. Don't trust surface-level competitive analysis   Payroll looked terrifying from the outside. ADP, Paychecks, and Intuit all dominated SMB, while Zenefits was an aggressive upstart. But when Josh dug deeper, a different picture emerged: the incumbents combined only had 50% market share, and 40% of SMBs were still doing payroll manually. Markets often have more white space than initial analysis suggests.   5. Find why you can win the untapped market   Identifying opportunity is one thing. Capturing it requires a superior go-to-market motion or a better product than incumbents. Josh developed both over time. The question every founder should answer: "Why can we tap the market segment the established players have left behind?"

90

8 Comments

Don't Build a Better Wheat Farm" - Why Defensibility Stakes Are Higher in Deep Tech Just published a new piece on my "Ignore the Confusion" blog, building on thoughtful insights from Eric Ver Ploeg at Tunitas Ventures about startup defensibility. Eric's core thesis: Too many startups pitch like wheat farmers - "huge TAM, slow incumbents, growing market, domain expertise" - but fail to think through long-term defensibility until it's too late. From a deep tech perspective, the stakes are even higher: ** Unlike software, deep tech founders must commit to defensibility strategies from day one - their funding depends on it ** Patent vs. trade secret decisions are often difficult to reverse and shape your entire competitive strategy ** Even "picks and shovels" providers (the tools that make industries more efficient) become commodities without proper moats The key insight that resonates: Defensibility can't be retrofitted. Whether you're building software or deep tech, your moat must be architected into the business model from the start. Thanks to Eric Ver Ploeg for sharing these insights on startup strategy and letting me build on his framework from a deep tech lens. Read the full post: https://lnkd.in/dEj_iF-Q #DeepTech #StartupStrategy #Defensibility #VentureCapital #Innovation

21

2 Comments

🏴‍☠️ Introducing Black Flag: The Accelerator for Founders Building America's Critical Technologies Today, we're excited to launch Black Flag — a new accelerator from Harpoon Ventures, in collaboration with Shield Capital and IQT (In-Q-Tel).​ Black Flag is for the most ambitious founders, those engineering the technologies that will define America’s future in an increasingly contested world. Space. Defense. Energy. Manufacturing. Biotech. Autonomy. If your work has national significance, you belong here. ​ Here’s what Black Flag offers: 💰 $250K–$1M in funding 🤝 Mentorship from operators and technical leaders at Astranis Space Technologies, Solugen, Kodiak, and more 🎯 Guidance on securing strategic, non-dilutive government funding 🛠️ Support with design, branding, website, and pitching 📡 Access to a network that spans top-tier deep tech VC funds, defense customers, and national security decision-makers Black Flag operates on a rolling basis, with batches selected monthly. We're ready when you are. If you're building  technologies that shape the balance of power — where the technical challenge is hard, the mission is urgent, and the stakes are national — we want to hear from you. 👉 Learn more and apply: https://www.blackflag.vc

171

10 Comments

I’m a strong believer in venture debt. When used at the right stage, it can be a powerful tool for fueling growth—providing fast, minimally dilutive capital to help founders scale without giving up more ownership. But timing matters. Too often, I see early-stage startups take on debt before they’ve found product-market fit or built a predictable revenue stream. At that stage, flexibility is critical—and the financial covenants that come with debt can do more harm than good. The bottom line: venture debt works best when the company has traction, a proven model, and a clear path to profitability. That’s when the structure makes most sense and debt becomes a true growth accelerator. I shared more thoughts in this piece for Benzinga. https://lnkd.in/gNC7R865

89

10 Comments

What many Founders don't appreciate is that fundraising isn't just a "necessary pursuit of capital." It's an unforgiving crucible that strips away illusions and sharpens your grasp on the business you're building. Fundraising crystalizes what you fundamentally believe to be true about your business, but it also exposes what assumptions you've been coasting on and what you need to test to have any knowledge about whatsoever. Good VCs probe relentlessly, revealing if your idea is built on firm ground or just wishful thinking in disguise. It's a wake-up call that forces you to confront the gaps and the shaky premises that could unravel everything if left untested. The process no doubt forges you in fire. Rejections can bruise the ego and feedback can sting. But if you lean into it, you emerge with a refined strategy, a tighter product, and a team that's aligned on what matters. The pain? It's just the price of building something that the world has never seen before.

101

16 Comments