Hey Reader,

Here’s edition #1 of Altitude, from Cirrus Capital Partners, a newsletter that gives Founders a birds-eye-view of where and how the money is moving so they can elevate their lives and their business.

Get the brass tacks of what’s happening in the world of investing and business financing—because, beyond the capital, time is a Founder’s most precious asset.

Also, some newsletters are boring af. We can’t promise Pultizer-worthy every week, but we can at least promise John Newbury-worthy. Warning: We don’t talk about ourselves too much, but we do promote ourselves because…marketing. 🤷 But so we don’t annoy you, we only link once to our blog and put our 44 words of juicy self-aggrandizing copy at the end.

P.s. let us know if you want off the list and we'll always respect that. Otherwise, can you do us a huuuuuuge favor and mark us as a safe sender if we land in your spam this first go-around? 🙏
​

Let’s get into it:

​Forecast: After A Turbulent Few Years, Venture Should Steady In 2024​

The venture capital roller coaster ride might even out for a bit. There were years of storms, heavy winds, and windfall, but in 2024, venture capitalists have some “cautious optimism,” especially regarding conditions for startup funding and exits. There’s an expectation for a more balanced and realistic market environment. There will also be a “right-sizing” of the market, potential mergers and acquisitions, and initial public offerings (IPOs). Expect a slowdown in artificial intelligence investments due to high valuations and ongoing adjustments, including layoffs in the tech sector.

This is good news for startups seeking venture capital or an exit strategy. Not only are public companies sitting on hordes of cash, but so are private equity and buyout funds—and, while mergers and acquisitions are the more popular route for startup exits, IPOs are expected to pick up steam.

​Beware of all green dashboards ​

First, this accurately summarizes Jeff Bezos's interview with Lex Fridman. Second, it espouses a truth that leaves too many cautionary tales in its wake. Companies often measure performance against specific metrics, but metrics, like any variable, can rise and fall in importance depending on the business's present or future needs. What metrics might seem important to a company in 2015 might be different in 2024—but all too often, companies are managing towards metrics that they barely understand five years later, or as CJ Gustofson more aptly summarizes: “They lose connection with the underlying truth the metric is supposed to serve as a proxy for.” Gustafson offers solid recommendations, including getting brutally honest say uncomfortable truths. Let the numbers guy speak first instead of the senior person, and revisit KPIs every quarter.

The moral of the story: If it looks too good to be true, it probably is.

​Venture Capital vs Venture Debt: Which Is Right for Your Startup?​

Venture Capital and Venture debt come with risks—you just have to decide what you’re willing to risk.

With Venture Capital, you don’t just access funds; you access a network of potential partners, advisors, and clients. VC funds also bring mentorship to the table. There’s a reason why people on Shark Tank are particularly choosey with who gives them money; they want the know-how of a particular shark. On the flip side, Venture Debt provides you with the same funds without taking a single percentage of equity, less stringent deadlines on hitting specific KPIs, and mutability of goals without investors' sign-off.

What happens if you don’t pay back your venture debt? You run the risk of diluting equity to your lender at a predetermined price.

Suppose you’re okay with debt to retain complete ownership of your business and control over business operations. In that case, Venture Debt might be the better option for you.

Venture Capital is the way to go if you’re okay with relinquishing equity and would prefer to get large capital infusions with multiple stakeholders to help steer the ship. Just remember that investors have high expectations for growth, so ensure that every bit of funding is maximized to deliver rapid growth.

​People who were no smarter than you​

Nothing big, nothing grand, no deep dives or new information. Just something for you to read and, print out, paste to your wall so you can look at it every day. The things you see around you, all of life, were made (mostly) by people who were no more intelligent than you. Once you learn that it has always been within you, the ability to build things that people can, will, and want to use, your life will change.

Look, I have to put something pithy and motivational in this newsletter; otherwise, I’ll just sound like Kevin O’Leary.

​The Experimentation Layer​

When Rabbit dropped its $199 AI device, it sold 40,000 devices on pre-order for $8M in revenue. It also launched harsh criticism across X, threads, and Linkedin regarding its necessity, why it “should have been an app,” that the cost didn’t make sense, and that “it didn’t have a real use case.”

But people forget that Steve Jobs did a ROKR E1 in partnership with Motorola before the iPhone—a total flop. The point is: No one gets it right the first time, not even Steve Jobs. There is a “layer of experimentation” that every startup goes through. Most new ideas, programs, and products don’t get it right first. You don’t need to get it right the first time. You need to experiment, learn, and try again. If someone points out your product for not being right at the first launch, that’s not a criticism. That’s just a naysayer.

Like the author says: You have to f*ck around to find out.

​5 Low-Cost Marketing Strategies For Startups On A Limited Budget​

If content creator is a title that makes you roll your eyes, I’m sorry to say that you’ll have to get used to becoming one to grow a business.

But don’t worry; you won’t need to label yourself that. You can give yourself a cooler name. Sometimes, I say that I’m a Curator of Persuasive Passages.

Organic content marketing is the most effective and low-cost means to generate quality leads. There is, however, a right way to do it. An effective content marketing strategy requires a consistent time investment in producing content your audience reads to channels they're active on. Write a long-form blog or whitepaper and use it as a lead magnet to create buzz around your business. Also, offer something your customer base or target audience finds valuable to their life or business. Use email marketing to nurture more engaged leads, use social media to train algorithms to push your content to new online audiences, and dabble in some PR or micro-influencer coverage if you have the budget. Either way, you’re going to have to be a content creator. At least initially. Then, you can pay someone to do it ;)

​The thing about PRIME drink…​

When PRIME Drink (started and owned by Max Clemons and Trey Steiger of Congo Brands) brought on famous YouTubers Logan Paul and KSI, the notoriety of these creators generated so much organic hype that it was leveraged to create incredible demand by releasing less inventory and forging partnerships with UFC, FC Barcelona, Bayern Munich, and elite athletes like Patrick Mahomes. They went from 250M in the first year to 5x-ing that number the following year. Great numbers, right?

Well, Gordon Ramsay said it was like swallowing perfume. Then, it started getting banned in schools (and some countries) and investigated by the FDA due to its high caffeine content.

So, if Influencer marketing is done right, it can be the lean and mean marketing strategy that yields high YoY returns…

But at the end of the day, how long will those gains last if your product is snake oil? Only time can tell.

​Check out this meme...​

It’s funny because you know it's true sometimes...

​Aha!’s bootstrapped journey to $100M+ in ARR​

Growth Unhinged features a guest story by Danny Archer, who worked at Aha! for seven years. He was employee #4, and by the time he left, Aha! had scaled to 110 employees and $100M in ARR.

And they didn’t get a dime in outside funding.

How? They used their website to drive one thing and one thing only: Free trials. From then on, they shifted from marketing strategy to product strategy:

• KPIs measuring their product activity and feature usage
• Lifecycle emails
• Automated adoption emails
• Robust and proactive customer support
• Straightforward pricing
• Work off inbound motion, build outbound motion for net-new leads, and introduce strong account management to upsell and cross-sell.

When selling a product, marketing first, then product-led sales. Sales should serve as a consulting effort. When you find moments to offer help, offer help and develop channels where they can help themselves. When you make customer-centric and product-led sales, you drive higher engagement and higher value.

​People failed to predict SVB ​

Yes, I know the internet has beaten a dead horse that is SVB, but I have not gotten a swing at the Pińata yet. (This will be the first of many, sorry).

In an autopsy of the SVP crisis post-mort, clear signs were ignored. From growing super fast (typically a red flag for banks), too many uninsured deposits, a clientele with the majority of their wealth in equity, poor risk management, and most importantly—no CRO??

Ultimately, big banks won the hearts (again) of mid to late-stage startups after the SVB crises caused a payroll crunch and made acquiring venture debt more challenging. Not to mention the apparent poaching of SVB employees by J.P. Morgan Chase. In the end (this article predicts), the neo-banks like Brex and Mercury will come out on top.

Diversify your funding. Diversify your banking. If you’re a startup founder, there are ways to get some nimble startup debt that doesn’t involve tremendous risk.

Sooooo FinTech FTW (?!).

That’s it for now. Every week, we talk about different topics from a high altitude, and we’ll try to shove in a few more memes next time.
​

The Long Awaited Juicy Promo copy: We’re Cirrus Capital Partners: Sector-agnostic money matchmakers for Founders.

We’re part-tech, part-team, because cyborgs are cooler than robots. With data and intel, we match Founders to the best non-dilutive capital providers in the market and make warm introductions.

Until our next flight,

Ryan Ridgway & your friends at Cirrus

​cirruscap.com

​
​
​

​

​