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Altitude Edition 015 is hot off the press from Cirrus Capital Partners ♾, the better way to finance your company.
As usual, here's our bird's eye 🦅 view of the most exciting news and insights around...
Successful Companies and Founding Teams
VC, PE, M&A, and Credit Transactions
Growth Metrics, Benchmarks, Charts & Data
New and Emergent Technologies
Productivity Hacks
Created for founders, bootstrappers, VCs, angel investors, marketers, technologists, executives, and operators—everywhere.
Let’s get into it:
Upcoming Events
Where you can find us ☕
FinovateFall 2024 | NYC | September 9-11, 2024
SaaStr Annual 2024 | Bay Area | September 10-12, 2024
AI vs. Everything Else (and a bit of parody...)
ModelModel Fights
Jack Kuveke of Jabroni Capital never fails to make us laugh when he puts out a newsletter...
In his recent release, he covers Jim Cramer’s penchant for being right on the money with market predictions (lol), Meta competing with ChatGPT by releasing an open-source AI model, and the director of the Secret Service resigning. Of course, each section is punctuated with top-tier memes and analogies. So, if you don’t read the content, at least go for those...
There's a divide between well-funded AI ventures and other struggling startups
The recent AI funding boom is obscuring a broader financial crunch for startups, as the time between funding rounds has extended from 15 to 19 months. While AI companies attract high valuations and substantial investment, many other startups face severe cash flow issues and tougher funding environments. VCs demand stronger business fundamentals, and many companies resort to smaller bridge rounds with investor-friendly terms to stay afloat. Woof.
Product Vision, Building Unicorns, and Playing To Win
The ideal small business lender (a deep dive essay)
Small businesses are the backbone of the United States economy.
Yet accessing capital remains a significant challenge. Though there’s been a rise of online lenders, many struggle with high costs and limited specialization.
That’s why the future might lie in Vertical ERPs or VERPs, which offer embedded lending solutions within industry-specific platforms so that loan processes are faster and more accurate. As the landscape evolves, fortune might favor small businesses that balance technology with deep customer relationships.
Top resources for building and scaling billion-dollar startups
The path of Entrepreneurship means you can kiss turning your brain off goodbye.
Market understanding, vision, and access to the right networks and resources.
(and a bit of luck...)
Here’s a laundry list of invaluable resources for everyone you’ll want to find and bookmark:
Guides on seed fundraising and financial modeling
The ultimate pitch deck template
200+ page deck of venture and startup insights
Guide to Venture Capital term sheets
Study on how VCs make decisions
Plus, ten more top resources for founders, CEOs, and VCs
How to take bigger, bolder product bets — lessons from Slack’s Chief Product Officer
If you want to take your product strategy from good to game-changing, Slack’s CPO isn’t a bad guy to take advice from. He just dropped some invaluable wisdom on making bold moves that can set your product apart.
In a nutshell: 1) Think big, 2) Have a unified vision, 3) Intuition matters, and 4) Collaborate for innovation.
Where To Play, How To Win
No company can be all things to everyone, so narrowing down the strategic playing field is a must.
Ask yourself, what choices have you made that narrows your competitive field across markets, segments, channels, categories, and ICPs in which you want to compete?
A sentence that stood out to me: "Competitors dying doesn't boost growth."
And remember: being a good player doesn't mean jack if you're playing the wrong game.
Four decades of Microsoft in one snapshot. It’s crazy that Microsoft is now in its 40s, but it’s certainly aged well.
Does it surprise you to know that Microsoft's largest stock growth was under Satya Nadella’s leadership?
We're still surprised (but really shouldn't be) at the sheer volume of $1B+ acquisitions they've completed. A few more, and they'll be the LVMH of tech.
Our visit to the market
SOFR Rate
5.35% 📈
WSJ Prime Rate
8.5%
Inflation Rate
3%
The brass tacks of what's happening in the economy:
A lousy jobs report—that's WSJ saying it, not us! In July, U.S. job growth slowed significantly, adding only 114,000 jobs, and the unemployment rate rose to 4.3%, its highest level since 2021. This slowdown caused a sharp decline in the stock market, with the Dow Jones dropping over 600 points.
Soft landing? More like hard landing. This unexpected weakening in the labor market has intensified fears of a potential economic downturn, leading to a sharp decline in stock markets. The Federal Reserve is now facing pressure to cut interest rates more aggressively to avoid a hard landing. The upcoming rate decision will be crucial, with debates on whether a quarter-point or half-point cut is necessary to stabilize the economy. While the job market remains historically strong, indicators like the Sahm rule suggest a potential recession risk, and concerns about economic stability persist.
Personal Consumption Expenditure index rose by 2.5% year over year, slightly down from May’s 2.6%, whereas Core inflation, excluding food and energy, remained steady at 2.6%
Fresh fundings 🥧
Notable Equity Rounds from big to small
Altana, a supply chain management startup, has secured $200 million in a Series C funding round, achieving unicorn status with a $1 billion valuation. Led by the US Innovative Technology Fund, this round also saw participation from March Capital, Generation Investment Management, Salesforce Ventures, and other existing investors. Altana's AI-powered platform offers comprehensive visibility into global supply chains, addressing challenges posed by trade restrictions, climate change, and national security concerns. Founded in 2018, Altana has raised $322 million to date.
Osapiens, a provider of ESG (Environmental, Social, and Governance) reporting solutions, has raised $120 million in a funding round. The investment aims to enhance Osapiens' platform capabilities, supporting companies in tracking and reporting ESG metrics. This funding round was led by global growth equity firm General Atlantic, with participation from other strategic investors. The new capital will help Osapiens expand its market presence and improve its technology to meet growing demands for comprehensive ESG data and reporting solutions.
Former Squad and Twitter executives have raised $7 million to develop a hardware AI assistant. The funding, led by several investors, will support the creation of a device designed to enhance productivity and streamline tasks through AI capabilities. The startup aims to differentiate itself in the competitive AI market by focusing on hardware integration and user-friendly features. This move signifies a growing trend towards specialized AI hardware solutions.
Notable Credit Transactions from big to small
Ares Management Corporation has closed its Ares Senior Direct Lending Fund III (SDL III) with $15.3 billion in equity commitments, exceeding its $10 billion target. The fund, which expects a total capital base of $33.6 billion with leverage, is nearly double the size of its predecessor, SDL II. Ares provides senior secured loans to middle-market companies in North America, having already committed $9 billion to over 165 companies—the fund benefits from Ares' extensive market relationships and investment experience.
esVolta secured $258 million in senior secured credit facilities to finance three standalone battery energy storage projects in Texas totaling 980 MWh. The financing includes construction and tax equity bridge financing, letters of credit, and a long-term loan. The projects aim to enhance the ERCOT market's energy response and grid reliability. MUFG Bank led the arrangement, with contributions from Nomura Securities, KeyBanc, Investec, and Cadence Bank. esVolta's CEO, Randolph Mann, highlighted the deal's importance for growth and supporting a decarbonized electric grid.
First Citizens Bank's CIT Commercial Services provided Crown Crafts Inc. with up to $48 million in financing. This includes a $5 million increase to a $40 million committed ABL revolving line of credit and an $8 million term loan. The funds facilitated Crown Crafts' acquisition of Baby Boom Consumer Products' assets, enhancing their toddler bedding and diaper bag offerings. CIT also offers factoring services to Crown Crafts. Mike Hudgens of CIT praised the extended relationship and the strategic acquisition's role in Crown Crafts' growth.
Until our next flight,
Sutheshna Mani | Chief Copywriter
Ryan Ridgway | Co-Founder, Managing Partner
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