The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 40 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 1 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Only a very small percentage of VCs add value beyond capital
“A very small percentage do. Don't believe most add any value beyond capital, but I'm partial because I think my investors do a stellar job of that.”
Denehy: Excessive startup valuations will trap tech companies
“Lower valuations. Just think a lot of companies are getting themselves into situations that are going to be very hard to get out of. So I think hip checking the valuations probably wouldn't hurt.”
Traditional VCs are skipping due diligence to win competitive deals
“Term sheet in two days. No diligence, right? Just like, maybe send us a board deck. And there used to be a small number of well-known growth stage fund who would do that, but increasingly what's happening is a lot of more sort of traditional VCs, I think, are …”
Raising larger rounds never allows startups to skip future fundraising rounds
“No one ever skips around. You spend the money and you're back out in market on the exact same schedule you were if you raised Half as much money.”
Startups with $15M ARR valued at $1.2B will struggle recruiting executives
“Like, hey, if you're a 15 millionaire or a business valued at 1.2 billion, I think you're going to have a challenging time recruiting the caliber of senior leadership that you want.”
Preemptive round markups rarely reflect actual commercial progress
“When you think about these like preemptive rounds where it's like, oh, some company raises at five hundred million in January, and then in March, they raise at a billion. It's like, it's unlikely in most of those cases that you actually engage in any commercia…”
Public markets cannot absorb the thousands of unicorns created since 2019
“If a thousand billion dollar plus valuation companies were created in the last two years, what we all know to be true is that in two to five years, like the public markets will not be able to ingest a thousand, maybe 2000 of these businesses far from it. And m…”
High valuations will trigger a major surge in total startup failures
“Yeah, so based on that, like, honestly, I think you're going to see a lot more zero.”
Capital cannot overcome limits on engineering hiring velocity
“More capital isn't necessarily going to make you move faster. There's a physical limit to how many talented engineers you can hire. In a six to eight month window.”
Raising at nosebleed valuations eliminates startup exit optionality
“And if you raise a nosebleed valuations and you ingest boatloads of capital, all of your optionality goes out the window in terms of successful exit.”
Scaling a startup gets easier as direct reports become senior executives
“Liz, it actually does get easier. Trust me. Like it does get easier because as you A bunch of things happen that make it easier. One, you understand your customer better. You understand your own business better. You understand the economic model better. In thi…”
Electric will be a successful public company within five years
“Electric's a public company, and a very successful one. Definitely within the next five years, that's a huge priority”
Denehy: Evaluating product-market fit based solely on revenue is lazy
“Revenue as a marker for product market fit on its own is probably a lazy way to look at it.”
Denehy: Pre-product market fit is about solution design, not custom engineering
“So when you're pre-product market fit, you generally don't get bonus points for building things from scratch. So really that Pre-product market fit stage has more to do with solution design than it does with engineering, or at least it should.”
Denehy: Zero technical debt means an engineering team lacks leverage
“I think most good engineering teams sort of look at technical debt like a credit card, right? You know, a balance of zero means you're probably not leveraging it enough. And if you owe Amex a 150,000 dollars, that's probably not good either.”
Denehy: Startups must prioritize commercial activity over perpetual research
“At the end of the day, you have to build a business, not a university research project. So there's a point at which you need to get the show on the road and engage in meaningful commercial activity.”
Denehy: Startups spending years in beta are usually uncompelling businesses
“And so some of these companies that have effectively been in beta and I'm using air quotes, you know, for years, they might be successful to the extent that they have an elegant product that many people like to use, but as businesses, they're probably not all …”
Denehy: The size of a VC's support team reveals their true value
“At the seed stage, VCs always say they add value beyond cash, but If you actually do the best way, and at the seed stage, you need all the help you can get. So you really want a VC that's going to be able to step up and support you. Well, the best way to kind …”
Denehy: Growth-stage startups need VCs with prior founder experience
“I think as you get to later, later stages, you know, your A or B and beyond, it's really important that some of the big money earlier on is coming from investors who were at one point entrepreneurs in their own right that had real companies”
Denehy: Electric will reach $100M ARR within five years
“Envision us as a de facto market leader. You know, this is a hundred million plus AR business, strong public market fundamentals, world-class leadership team, and probably still the coolest swag in the game.”
Bad executives can be fired, but bad 10% investors cannot
“Because if I hire an executive and they don't work out, I can fire them. But if I bring on an investor and they suck, you can't really like fire someone who owns 10% of your company.”
Electric raised an $80M Series D at just 10% dilution
“The number we came up with was roughly eighty million. And then we looked at that and said, okay, look at comps in the market. Hey, eighty million actually works out to where, you know, we can raise that round with, you know, 10% dilution. That feels right for…”
Electric grew ARR from $17M to nearly $40M in 2021
“A company like ours that went from, you know, 17 to close to forty million in ARR this year”
Growth startups can fail on experiments if core targets are met
“As long as the stuff in that experimental bucket doesn't drag down or otherwise negatively impact the OKRs of the business that we're aiming for next year, do what you want. Like, obviously, we want those things to work, but, like, it's okay to fail in that re…”
Denehy: Enduring SaaS startups require need-to-have products, not sales tactics
“The solution you're delivering has to be a need to have, not a nice to have, full stop. You know, if your business is just clever marketing, or it's just jamming something down a customer's throat with an inside sales You're going to struggle to build a really…”
Denehy: Swarm's retail analytics model failed due to a $50 monthly cap
“Even if we solved it perfectly, our customer would never pay us more than 50 dollars a month per store. So, you know, I think in the end, like the business model was kind of a waste of time.”
Denehy: A startup is not over until the last dollar is spent
“Until the last dollar is spent, it's not over.”
Denehy: Leadership strength and vulnerability are self-reinforcing
“The two actually really, I think, are self-reinforcing. Like, you as a leader have to exhibit a lot of strength in order to sort of have the courage to just own up to things, whether you're stressed or just being honest about things not going well. So a lot of…”
Denehy: Early-stage CEOs face severe context switching as player-coaches
“The early days, like the sort of one to 30 or 40 years Employees and the, you know, zero to one to two million as a CEO, you're a player coach. So you're doing a lot of jobs as an IC, but you're also managing maybe some frontline folks and you have CEO stuff t…”
Denehy: Electric has reached $8M to $10M in revenue
“The stage that I think tends to come after that, and this is sort of where, where electric's at right now is when you start to get to sort of that early growth stage, the eight to ten million revenue on up.”
Denehy: Scaling past $10M revenue requires processes and experienced leadership
“Your first five to ten million in revenue can come from a lot of individual heroics, but beyond that, you need really scalable processes and teams with bench depth and predictability with respect to the outcomes they're driving, and so you'll never get there i…”
Denehy: VP hiring takes up to six months, requiring early recruiting
“And this is something even, even with electric, I completely underestimated in our early days and didn't get right, but it's going to take three to six months to hire a VP level or above person. Sometimes you'll get lucky, you'll hire him faster, but for the m…”
Denehy: Founders must start executive hiring before fundraising rounds
“You've got to start ahead of the fundraise and ahead of that next inflection point, because you're going to find yourself having been caught flat footed and needing to execute on a plan that you just simply don't have the People and leadership to do.”
Denehy: Electric grew from 5 to 150 employees in under three years
“A company like ours that goes from four customers and five employees to 300 customers and 150 employees in less than three years.”
Electric raised a $90M funding round led by GGV Capital
“Raised ninety million, led by GGV, and you know, all of our other insiders came in and got the round done”
Zero of Denehy's 25 angel investments went bust in two years
“I have been of the 25 companies I've invested in in the last two years. No one's gone out of business.”
Denehy: Every company needs software to automate IT management
“And so then when we had a whole bunch of it stuff that had to get handled, I just thought to myself, well, Hey, if you can automate HR stuff with software, why can't you automate it stuff with software? Every company needs this.”
Denehy: Swarm sold its lousy $100 Wi-Fi sensor MVP to 100 customers
“And then we were able to, you know, we were able to sell that product to probably, I think, our first 50 or a hundred customers. It was a lousy product, but it was good enough for the early adopters to see what we were trying to do and prove that there was a b…”
Denehy: Swarm avoided total layoffs with a $300K wire before a wedding
“Our last two companies were at times days away from running out of money, and I think in the most extreme case at Swarm, Rudd's wedding was on a Saturday, and we were gonna have to lay everybody off on Monday, and so two days before the wedding, we got a wire …”