The Ledger
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Wittenborn: Macro growth drivers matter far more than execution
“And so I believe that those companies benefit from growth drivers that are much more meaningful than any execution.”
Wittenborn: The US has a higher caliber of venture investors than Europe
“That being said, I've met many more investors that I'm impressed with in the U.S. Than in Europe, right?”
Wittenborn: Paywall display frequency is top driver of subscription conversion
“And so what Superwall is doing is optimizing paywalls. And so one of the learnings that we have from that is that the number one indicator for driving conversion is how often do you see the paywall, right?”
Wittenborn: VCs Dislike Consumer Subscription Until Tens of Millions in Revenue
“Because people don't like consumer subscription until it does tens of millions in revenue.”
Wittenborn: Existing consumer subscription apps will win most value from AI
“The way I think about it from an adjacent perspective is we're going to have companies that are already consumer subscription companies that are implementing this to make their products even more sticky, more functional and give features that were not possible…”
Wittenborn: Venture capital fund sizes will shrink in coming years
“It's certainly hard to make a blanket statement, but I think that fund sizes will go down.”
Wittenborn: Duolingo commands higher revenue multiples than comparable SaaS companies
“There's now a Duolingo that's, I would just want to stress this, in this current macro, they have a much higher multiple on their revenue run rate than comparable SaaS companies.”
Founders Fund was the only VC to proactively halve its fund size
“Also, they're the only ones that Cut their fund size in half proactively when the macro changed. So they went from, I don't know, 1.8 to nine hundred million in two funds, right?”
Wittenborn: Consumer subscription apps can reach $1B to $5B outcomes
“So I think that, yes, today, I believe we're early. However, I have enough confidence based on what I've seen that we can get to multi-billion dollar outcomes, right? I don't know about ten billion dollar outcomes, but I think one, two, three, four, five billi…”
Wittenborn: Consumer App Churn Resembles SMB SaaS After Year One
“The insight that we've had with some of the first companies we invested in is that the churn is usually high in the first year, and then from the second year on, it looks very much like SMB SaaS churn.”
Wittenborn: Consumer app prices will follow SaaS trajectory over 5-10 years
“The price increases that we have seen since, like, let's say, a corn launch to what it charges yearly today and what it will charge in five to 10 years, I think it has a similar trajectory to what we've seen with SaaS companies and their ability to extract val…”
Wittenborn: Seed-stage consumer subscription apps can reach tens of millions in revenue
“Often with a seed round, you get to tens of millions in revenue.”
Wittenborn: Adjacent Plans for Three-Year Cash Runway in Round Structuring
“At the same time, it enables the founder to have more money so that they have longer runway, which typically now I plan for three years.”
Wittenborn: Seed-Stage Startups Do Not Need Formal Board Seats
“At Seed, you don't need a board, I think, because you're chasing product market fit, and so most of the time I'm in your way.”
Point Nine broke its rules to invest in Revolut's seed round
“When I was with .9 and reinvested in Revolut, it was both outside of the focus, right? It's a mobile consumer app. It was actually had just closed the seat round with Balderton. So there was no actionable opportunity and the only way to get in was actually for…”
Wittenborn: Investment frameworks exist to test conviction when breaking them
“I think that part of the frameworks that we set for ourselves are litmus test for the conviction to break them.”
Wittenborn: Solo GP model fits early-stage VC better than consensus partnerships
“I think solo GP is, For the right person, a very good fit for the early stage. And I think most consensus driven models at the early stage, unless it's a very aware and mindful partnership that really supports each other and, you know, can all see the complexi…”
Wittenborn: Backed founders who initially aimed for $10M scale
“So I do, like, I've invested in founders that told me, we want to scale to ten million and then we'll see. Right? Like, which nobody else would do that.”
Wittenborn: European founders prioritize US venture investors over local funds
“One thing I've actually noticed is that the European founders care about having a US investor.”
Wittenborn: Founders respect VCs who built their own firm over hired partners
“And I think that is something, by the way, that I think founders respect, right? Because you're not an associate or principal, even a partner that was hired into a firm with a cushy salary, but you took a risk, you built something, and you're trying to, you kn…”
Massive user engagement allows early startups to figure out monetization later
“If you can show that this is something people really love, and there's just huge traction in terms of usage or growth, then we think that monetization can often, often follow that.”
Wittenborn: Tech evolution occurs deterministically through combining existing phenomena
“Evolution happens usually as a combination of the existing phenomena and in a relatively deterministic way.”
Wittenborn: Adjacent Portfolio Companies Must Pay Back CAC Within One Year
“We steer acquisition so that we recover the CAC with the first year, ok? So every time you get a yearly subscriber that pays back your CAC, you don't overspend”
Wittenborn: Consumer Apps Should Target 50% Organic Customer Acquisition
“The guideline I give is 50%.”
Wittenborn: 70% to 80% of App Conversions Are Annual Upfront Subscriptions
“It's like 70, 80% of the conversions that we work with.”
Wittenborn: Paid conversion often drives higher user engagement
“And then paradoxically also, the pay conversion Oftentimes activates the user, right? So it's like, there is some like, it's like maybe the gym membership effect. I'm not sure, but it really often drives higher engagement.”
Wittenborn: PhotoRoom expanded beyond mobile into six-figure enterprise API contracts
“Take photo room. It's a prosumer product. We started on mobile. It's successful, not just in the US, but also in emerging countries. And now we're bringing the same product to web, to teams, and we have an API that people are paying 600 digits for a year.”
Wittenborn: Seed offers best risk-reward ratio for multi-billion dollar exit targets
“I believe that seed is the best in terms of upside potential, downside risk, and Expected future dilution, especially given that we, I operate under the assumption that we, I have multi-billion dollar exits, not ten billion dollar exit, right?”
Wittenborn: Early-stage VCs must bet on market change, not static metrics
“The way that a growth investor looks at is, is that the static, right? They need to understand the size and the benchmarks and make it fit their formulas. And then it has to add up and make sense. We, I think me, thesis driven investors, I think need to unders…”
Wittenborn: VC regret requires better decision-making, not more deal volume
“I think, I mean, this is actually a good also, I mean, so I think most regrets that we have as investors are the companies we didn't invest in. And so what does it mean? Does it mean that we have to see more companies? It usually means we have to be better at …”
Wittenborn: Application layer verticalization drives most software value creation
“A lot of the value that has been built in software over the last 20 years has actually been in the application layer that takes these breakthroughs and just verticalizes them for a specific use case or a specific customer demographic and monetizes them.”
Wittenborn: Consumer subscription apps will trigger a wave of smaller IPOs
“And so my hope is that in a few years we have more examples. And so it will open the door for smaller IPOs, but more IPOs. And so I think that will happen. The best of them will do that.”
Traditional TAM metrics fail when evaluating entirely new markets
“TAM, in a way, already is defined as a market that's already existing, right? Because you're trying to figure out Which part of an existing market you can address with this company or the solution?”
SaaS demands stronger technical and product teams than e-commerce
“Specifically for software as a service where you, you're essentially online or cloud software company, it's super important to have great product people and great technical people, right? Because at the end of the day, it's about really differentiating with th…”
Point Nine Capital avoids rigid MRR thresholds for seed investments
“So as some I mentioned right now, it's for us, because we're at such an early stage, hard to set kind of absolute barriers or criteria, because it depends so much on how, how far the company is, right? So we don't like to give out a number of total MRR or some…”
Early startups should track usage metrics over MRR
“And I think in the beginning, especially when there's, you know, it's just so much uncertainty, I think it's very, very good to figure this out on a high level and then track, Tracking this over time, because it doesn't necessarily, you know restrict you to th…”
Organic growth is difficult to fix after a product launches
“This is something that, that is very, honestly, very tough to fix once a product is out.”
Insight's Jeff Horing advised Nico Wittenborn not to be cheap
“One piece of advice that Jeff Hoaring, the founder of Insight gave me after working with me at Insight for a while, was that he basically, his only comment was, don't be so cheap.”
Wittenborn: Belkin founder Chet Pipkin bootstrapped and sold to Foxconn for $1B
“He bootstrapped the company and sold it for a billion to Foxconn.”
Point Nine Capital closed a €55M seed fund in May 2015
“For us at .9, we have a seed fund, right? The most recent fund that we closed in May this year is fifty five million euros.”
Point Nine Capital targets seed investments that can return the fund
“And for us, what we aim for when we do an investment is trying to get to an outcome that at least returns the fund once, right?”
Point Nine Capital focuses heavily on SaaS and marketplaces
“So at .9, for instance, we're very focused on, on SaaS and marketplaces, right?”
Point Nine Capital is named after software version 0.9
“The name .nine actually comes from the product version.nine, so we want to invest when it's not Product version one point zero yet, right? But it's almost there in a way.”
Point Nine Capital requires 6 to 12 months of usage data
“In, in, in most cases, this means that we invest when there's some six to 12 months of first data of actually usage of the product or maybe customers paying for this.”
Point Nine Capital invested in Typeform before the company began monetizing
“We looked at it quite early in the company's lifetime. They had the product pretty far, but they didn't charge users yet, right? They were kind of in an extended beta version, and we saw the product, and we just really loved it, and so we took a leap there, an…”
Point Nine invested in smoothie subscription startup Green Blender
“But this is actually one, this is which is a little unusual, I guess, for us, but I still really like it's a New York based company called Green Blender. And what they do actually is a smoothie as a service subscription play. Where, which sounds maybe a little…”