News

SAFEs can sometimes have unintended consequences. Especially when it comes to founder dilution.

The lies of small numbers are magnified when put into a spreadsheet. If you end-up with $100m revenue in your start-up’s business plan, it’s almost certainly more wrong that it should be 🙂

Like most VCs, Shearwater doesn’t sign NDAs. Here’s our explanation on why.

We look closely at gross margins (GM) at Shearwater – here’s why.

In one of life’s serendipitous moments, our most recent portfolio company Diffuse Energy has moved into a new office…on Shearwater Drive. Has to be a good sign!

The first founder’s dinner for 2020.

The standard line in venture is that the only way to get a meeting is via a warm-intro. Don’t bother with cold-contacting a VC, it’s said. We’re not fans of this approach, and here’s why.

In 1964, the typical S&P 500 company was in the list for 33 comfortable years. By 2016, this had reduced to 24 years. And it’s forecast to shrink to just 12 years by 2027. The pace is innovation and disruption has literally never been faster.

Playground XYZ came 8th in the Deloitte Fast 50 – what a great company to be involved with.

The fuel that startups run on is uncertainty. Large companies tend to value waiting for higher fidelity information before entering a market. This is your opportunity.

Bessemer Venture Partners, one of the oldest firms in the industry, celebrate their anti-portfolio: all the great deals they said no to. It makes for great reading.

You set the valuation, I’ll set the terms. The catch that often comes with achieving unicorn status.

A different way to venture.

The first principle with any business is that natural movement is to be operating at profit

Much the chatter surrounding the IPO of the We Company (aka WeWork) relates to the eye-watering valuation being sought. Yet recently there’s speculation that the IPO may end up closer to $20 billion, as opposed to the the $47 billion valuation SoftBank offered when they invested $5 billion in January 2019.

Why mega-rounds are so dominant in venture investment.

In late 2013 Y Combinator released its innovative Simple Agreement for Future Equity (SAFE) investment instrument. The purpose of the SAFE was to allow pricing to be deferred in an early investment round, as early stage companies are somewhat difficult to value. YC wanted to take some of the benefits from Convertible Notes (which are debt) and make them available in equity form. Thus the SAFE was born.

As the managing partner of Shearwater, I frequently find myself thinking about the quality of our own ‘product’. One of the differentiators of Shearwater is that we’re three founders investing our own money to back the generationally best tech companies in Australia and NZ