Raj Kulasingam

Friends and family not fools... #startups #africa. Thanks @tomjackson1988 for a great article which captures @VishalsVoice and my ethos in this exciting space...

Understand the concept of "by-and-large" and use approximations. Because our educational system is hung up on precision, the art of being good at approximations is insufficiently valued. This impedes conceptual thinking. For example, when asked to multiply 38 by 12, most people do it the slow and hard way rather than simply rounding 38 up to 40, rounding 12 down to 10, and quickly determining that the answer is about 400. Look at the ice cream shop example and imagine the value of quickly seeing the approximate relationships between the dots versus taking the time to see all the edges precisely. It would be silly to spend time doing that, yet that's exactly what most people do. "By-and-large" is the level at which you need to understand most things in order to make effective decisions. Whenever a big-picture "by-and-large" statement is made and someone replies "Not always," my instinctual reaction is that we are probably about to dive into the weeds--i.e., into a discussion of the exceptions rather than the rule, and in the process we will lose sight of the rule. #principleoftheday

AI bros when I tell them Boeing outperformed Nvidia, Meta, Google, Broadcom, AMD, Microsoft this year

Last week we hosted our 4th fundraiser for 🇺🇦 with over £50,000 for @BritUkrAid with our #Walk4Ukraine event. We will keep doing it, we will keep our support for Ukraine! We are very grateful to you all for your continued participation! 🇺🇦 Read more: vm.ee/en/news/estoni…

OmniRetail just secured a $20 million Series A round. The B2B platform processed ~$810M last year and is betting big on embedded finance for profitable growth across Africa. Here’s how they’re building a serious moat in informal retail:

*BIG BREAKING * the People's #Bank of #China suddenly announced that the digital RMB (Renminbi, Chinese Yuan) cross-border settlement system will be fully connected to the ten ASEAN countries and six Middle Eastern countries, which means that 38% of the world's #trade volume will bypass the SWIFT system dominated by the US dollar and directly enter the "digital RMB moment". This financial game, which The #Economist called the "Bretton Woods System 2.0 Outpost Battle", is rewriting the underlying code of the global economy with blockchain technology. While the #SWIFT system is still struggling with the 3-5 day delay in cross-border payments, the #digital #currency bridge developed by China has compressed the clearing speed to 7 seconds. In the first test between Hong Kong and Abu Dhabi, a company paid a Middle Eastern supplier through digital RMB. The funds no longer went through six intermediary banks, but were received in real time through a distributed ledger, and the handling fee dropped by 98%. This "lightning payment" capability makes the traditional clearing system dominated by the US dollar instantly look clumsy. What makes the West even more frightened is the technical moat of China's digital currency. The blockchain technology used by the digital RMB not only makes transactions traceable, but also automatically enforces anti-money laundering rules. In the China-Indonesia "Two Countries, Two Parks" project, Industrial Bank used digital RMB to complete the first cross-border payment, which took only 8 seconds from order confirmation to funds arrival, 100 times more efficient than traditional methods. This technical advantage has enabled 23 central banks around the world to actively join the digital currency bridge test, among which Middle Eastern energy traders have reduced settlement costs by 75%. The deep impact of this technological revolution lies in the reconstruction of financial sovereignty. When the United States tried to sanction Iran with SWIFT, China had already built a closed loop of RMB payments in Southeast Asia. Data shows that the cross-border RMB settlement volume of ASEAN countries exceeded 5.8 trillion yuan in 2024, an increase of 120% over 2021. Six countries including Malaysia and Singapore have included RMB in their foreign exchange reserves, and Thailand has completed the first oil settlement with digital RMB. This wave of "de-dollarization" made the Bank for International Settlements exclaim: "China is defining the rules of the game in the era of digital currency." But what really shocked the world was China's strategic layout. Digital RMB is not only a payment tool, but also a technical carrier of the "Belt and Road" strategy. In projects such as the China-Laos Railway and the Jakarta-Bandung High-Speed ​​Railway, the digital RMB is deeply integrated with Beidou navigation and quantum communication to build a "Digital Silk Road". When European car companies use digital RMB to settle freight through the Arctic route, China is using blockchain technology to increase trade efficiency by 400%. This virtual-real strategy makes the US dollar hegemony feel a systemic threat for the first time. Today, 87% of countries in the world have completed the adaptation of the digital RMB system, and the scale of cross-border payments has exceeded 1.2 trillion US dollars. While the United States is still debating whether digital currency threatens the status of the #US #dollar, China has quietly built a digital payment network covering 200 countries. This silent financial revolution is not only about monetary sovereignty, but also determines who can control the lifeline of the future global economy! This is very big news It means De-dollarisation in a big way. It can completely re-set the world

20 Years Ago, #OnThisDay Boxing Day Tsunami 🌊hit Sri Lanka 🇱🇰. Over 35,000 were lost. 2 Minutes Silence from 9.25- 9.27am for all victims🙏 Remembering 2004 Tsunami victims🙏 #LKA #SriLanka #Tsunami2004 #Tsunami #TwitterSilence

One lesson I learned the hard way as a founder is that most investors make-up their minds in the first couple of minutes of a pitch. You can spend endless follow up meetings trying to convince them but it’s often an uphill battle. Much easier to fill the top of the funnel with new potential investors realizing that fundraising is really a numbers game 🎲

LPs and GPs, it’s often said that fund size determines strategy and that’s very true for portfolio construction. But, another element on fund size is what the total value of exits need to be. A simple rule is what I’ll call the Rule of 30. This assumes that a fund owns 10% of a portfolio company on exit. Multiply fund size by 30 and that’s the total exit value the fund needs to get a 3x gross multiple. Example: a $500M fund means it needs $15B of exit value. 10% ownership at exit is $1.5B which is the 3x gross multiple. $15B of exit value in 1 fund means 15 unicorn exits or a decacorn exit and 5 unicorn exits. Assuming a portfolio of 35 companies, that’s quite a hit rate 🤔 Btw a 3x gross multiple for a $500M fund is about a 2.6x net multiple ($1.5B less $200M of carry / $500M). Aside from deciding if that $500M fund can generate $15B of exit value, an LP will consider that 2.6x for venture vs what they can get in small buyout with a shorter timeline for distributions and perhaps lower risk.

“The best life is the one in which the creative impulses play the largest part and the possessive impulses the smallest.” — ​Bertrand Russell​ via the 5-Bullet Friday newsletter (tim.blog/fbf) from @tferriss

The #yc halo

This is an unreal discrepancy. This FT journalist 👇 claims only 1,202 "new startups were founded" in China in 2023. Yet Chinese statistics show that 32.73 million new businesses were created in China in 2023 (stats.gov.cn/english/PressR…), a small 30,000 times more than her number! Now to be fair I understand that not all these 32.7M companies may qualify as "startups" (however it's defined). In fact we know that the vast majority of these business are individually owned businesses, basically like Single-Member LLC in the US. This article (english.news.cn/20240131/aea0b…) says 22.58 million such businesses were newly registered in 2023, 72% of the 32.7M. But still that leaves us 10.1M other types of businesses newly created in China in 2023. Are you telling me only 1,202 of these were "start-ups" (again with no definition of what she means by that in the article)? That's just not believable... I get that the business environment is slightly depressed in China but it's not THAT depressed, we're talking about a country still growing at 5% a year that's constantly innovating in so many fields at the same time, and thousands of new products being launched every day. This article would have you think the economy just basically died, with business creation virtually dried up. The FT does its readers a disservice with such sensationalist claims.

The world can be magical and unexpected…. Yup

A litmus test for VC fund performance: • Have you marked up your valuations based on SAFEs? (And if so, which ones) • Have you ever marked down any of those positions? There's no bigger black box of valuation shenanigans in VC than SAFEs These charts highlight the problem—

This Founder mode article is causing some good and some very bad reactions, really bad. Some people will start confusing founder mode with being an a$$hole.

I was going to make this into a nicely phrased point about venture debt, but I decided to just give you a screenshot of the DM I sent to a YC founder yesterday.

🏋️ I made a Deadlift ETF with only companies with CEOs that lift weights or do fight sports (not just cardio) It outperforms the S&P500 by 140% or 2.4x over the last 4 years! Lifting weights = $$$

The world's brightest minds in finance recently spoke on the worst investment advice they ever got, which included not buying Bitcoin, Facebook and non diversification

Revolut just posted 2023 financial results and they are insane 🤯 - $2.2B revenue (+95% YoY) - $428M net profit, up from $7M in 2022. - A record 12M new customers in 2023 - $22.7B in customer balances on the platform (+38% YoY) The crazy part? 70% of new retail customers joined @RevolutApp organically or were referred by someone they know. FinTech is back 🚀

Nigerian crypto startup, raised $23 million dollars in 2022, lost $15.9m, spent $9.1m on salaries with no product and…

@fintechjunkie Good advice

Landing The Plane: A Necessary Choice For Many Startups How many Founders does it take to land a plane? None, they'll just pivot to a helicopter ride-sharing service. Joking aside, there’s nothing more fun than being part of an incredibly successful Startup. The relentless ambition of passionate teams doing everything they can to ship code and scale is energizing. And for most Startups, their goal is to join the ranks of “real” companies by growing large enough to eventually execute a well-received Initial Public Offering. Having their own ticker symbol etched in the annals of Wall Street drives many Founders, and as importantly, IPOs are a critical source of investment returns for the VCs that fuel the startup ecosystem. Without IPOs, VC math doesn’t math! However, reality is sobering. Only a few percent of all Startups backed by Tier 1 VCs achieve the scale required for a successful public offering, and the numbers are much, much worse for the broader Startup ecosystem. So, what happens when it’s obvious that a Startup isn’t on a trajectory to capture hundreds of millions of dollars of high margin revenue which would allow them to go public? The unfortunate truth is that once it’s clear that a Startup is going to struggle to achieve escape velocity, they need to work with their Investors to “Land The Plane.” This is typically very tricky because navigating a safe and controlled descent towards a positive outcome isn’t straightforward nor guaranteed. It often involves finding a strategic buyer that recognizes the value in the Startup's financial performance, technology, customer base, or talent pool. It often devolves into very heated debates about how to distribute a pool of money or stock that’s less than everyone is happy with. And it often requires a Founder to internalize what they’ve built and what their options are with crystal clarity rather than through their normal “eternally optimistic” lens. And given the “Grand Reset” that’s happening within the Startup ecosystem (which I wrote about here: x.com/fintechjunkie/… ), everyone is embracing the reality that the ZIRP environment funded too many Startups that will never achieve escape velocity. The implication is that there are a lot of planes in the air right now that need to be guided to safe landings or they’ll most likely run out of fuel and crash. STEP 1: AGREE TO LAND THE PLANE While not the original destination, a strategic acquisition can be a win for a Founder and for a VC, even if the financial windfall isn't astronomical. Internalizing this is important for all parties because it takes alignment and coordination to pull off a safe landing. Benefits include: Payment For Value Creation: In many cases, a strategic sale translates to some form of renumeration, whether it be in terms of cash or stock. Even if the financial returns aren’t great, any cash returned to Investors means they can return it to their LPs which is a major driver in raising additional money from them in the future. And if the payment is in stock, hopefully there will be some return in the future that offsets the time and money poured into the Startup. The Mission Can Continue: Acquisition by a larger company often injects valuable resources, expertise, and market access that can accelerate a Startup’s mission. The startup's technology, service or product could gain instant exposure to a wider audience, potentially amplifying its original mission far beyond what it could have achieved independently. Founders witnessing their creation flourishing within a larger ecosystem can be incredibly rewarding, even if they're no longer “at the top of the food chain”. Employee Success: A strategic buyer is likely interested in retaining the Startup's talent because these are the people who built what the acquirer is coveting. Many times, the Founders and Employees end up with great jobs at the acquirer and no longer feel the pressure of having to outrun the cash burn of an underfunded Startup. Employees are typically offered opportunities for growth that also come with great pay packages and real stability. Founders who prioritize their team's happiness can find solace in knowing they've secured great jobs for the people who believed in their vision. And it’s common for Founders to use the integration period to breathe, learn from past experiences, and potentially prepare themselves to build something even bigger. Building a Strong Reputation: A successful acquisition, even at a moderate valuation, can solidify a Founder's reputation in the VC ecosystem. It demonstrates their ability to build something of value, attract interest from Investors, and navigate the complexities of a sale. This positive track record positions them for future success when seeking funding for their next venture. Investors are more likely to back Founders who can navigate “Landing The Plane” instead of “Fighting To Remain Independent” when the writing is on the wall that it’s time to sell. STEP 2: PREPARE FOR A SALE Preparing to sell a company isn’t as easy as it sounds. It’s not as simple as hiring a Banker and putting together a data room. Building awareness about what a Startup does within the prospective buyer community and cleaning up how it operates are critically important and time consuming steps in most successful M&A processes. This means that the time to sell a company is 6-12 months before it would run out of cash. Cutting it too close will almost always lead to a fire sale, an acqui-hire (with no value exchanged for the Startup’s assets) or a no-bid. Building Awareness Within The Buyer Community: Most successful M&A transactions occur between known parties. If your first outreach to a potential strategic buyer is a Banker led M&A process then the odds of completing a transaction with that buyer is extremely low and diligence will be extremely long. Many times the buyer is a company that already interacts with the Startup in some form or fashion or has already expressed interest in the past. If the Investors and Founders of a Startup determine it’s time to sell, then the first step is to take stock of who already knows the company and whether or not they’re likely buyers. The second step is to determine who knows other potential buyers and put a plan in place for introductions in advance of launching a formal process. This can take many months or even many quarters depending on how the potential universe of buyers makes decisions. So starting early is critically important. Cleaning Up How A Startup Operates: The truth that nobody in the Startup ecosystem wants to internalize is that most Startups are actually liabilities, not assets. If a Startup is burning money, then the cash-burn of the entity is a liability it wants a buyer to assume. If a Startup has a tech stack that doesn’t seamlessly integrate with a buyer’s tech stack, the integration and cut-over costs are liabilities that the Startup wants the buyer to assume. If employees would “die before they’d work for a big company”, then the acquirer is being asked to absorb the disruption of near guaranteed attrition. Not all these issues can be solved before kicking off an M&A process, but the ones that can be addressed should. Reducing the burn of the entity is CRITICALLY important so making cuts to G&A and other “optional” areas should be done before pulling together a forecast of future performance. And talking to the leadership team about “who’s in and who’s out” can help negotiations down the road, especially if a Founder can get commitments from their team about the value of putting in “two years and one day” for the sake of everyone involved. STEP 3: RUN AN ORGANIZED M&A PROCESS Books could be written about the nuances how to set up an M&A process for maximum odds of success, but the high level generic advice consists of running a very organized process with a clean data room and financials, being prepared to tell a compelling story about the value of what’s been built, being realistic about what the real value is to each potential acquirer, and doing everything possible to get more than one buyer interested to generate leverage. Conclusion: “Landing The Plane” may not be the glamorous IPO envisioned by Founders and Investors, but by no means should it be considered a complete failure. It signifies the ability to internalize reality, adapt to market conditions, and secure some outcome for all stakeholders. Ultimately, a successful landing paves the way for another journey in the future. And a successful landing could return cash to and free up time for Investors to seek out the next potential rocket ship.