Signed, Sealed, Delivered
w.176 | Delivery Associates, Rob @ Ulu, Assure, "Only 4% Of Our Fund” Is Misleading
Hi friends,
I love the energy of December in New York. This week has been particularly packed, but in the best way.
The big news from me this week is that we announced that Delivery Associates, the company I co-founded a decade ago, received an investment from Trill Impact, a European private equity firm with $1B+ assets under management. It’s been a journey to get to this point, the origins can be traced to when I was a consultant at McKinsey working for Sir Michael Barber on education reform in Pakistan.
Thanks to everyone who reached out, shared the news, and wrote nice things on the Internet (I’ll admit here that it took me 45 minutes to recover emotionally from Arvind’s contribution). I can find it hard to celebrate success, but it feels great to do so with your friends.
Also, if you are in Los Angeles next week and want to hang out around Venice/Santa Monica, please let me know!
Today's Contents:
Deal Delivered
Good Reads: Sensible Investing & Trends
Song of the Week: Signed, Sealed, Delivered
Deal Delivered
I’ll say more about Delivery Associates, the lessons I learned about how to launch and scale a services company, and more in the weeks to come. A transaction is a fleeting milestone for an incredible amount of work, unseen failure, and uncertainty.
A few things that people have asked me this week and my responses:
From a fellow VC/friend: “Did you go shopping this week?”
Yeah, I bought a bunch of ETFs from my favorite boutique located outside of Philly. Luckily, they have an online store. The prices at Vanguard are looking better and better these days. (But, also, yes to dollar cost averaging and tax-loss harvesting).
From my old friend: “This is the result? We’ve listened to you gripe about all the difficulties of this company for years! YEARS!”
This is my acknowledgment that building a company from scratch is tough. Thank you to all my friends who listened to me struggle through all the up and downs. It takes a long time. There was never any complacency. Once you solve one problem, several more emerge. There are absolutely no certainties on the outcome.
From my new friend: “I clicked and don’t quite understand what that company does.”
LOL. It always amuses me how many people don’t understand what Delivery Associates does or what it is, even after I try to explain it. I’ll give it another go in next week’s edition.
Good Reads: Sensible Investing
Podcast with Rob Sheridan, founder of Uluwatu Limited, a Hong Kong-based investment manager. He discusses how to identify the companies which will matter the most in Asia over the coming decades. Rob is a Duke friend who has just started his own long-only firm.
TL/DR: Seems like a lot of smart, sensible investing.
“Look at your portfolio fresh every day.”
“It’s important to stick with a framework consistently through the cycle.”
One of his investments is Xero, the accounting system we use at Delivery Associates!
If you are looking for an internship, Rob is hiring.
Why VCs Explaining “It Was Only 4% Of Our Fund” Is Misleading Minimization: When a high-flying startup implodes as multibillion-dollar private companies shrivel, what their investors aren’t saying about these losses. By Hunter Walk.
TL/DR: There are a bunch of invisible costs and long-term impacts (things that are difficult to quantify today):
Reputation Effect.
Opportunity Cost of GP’s Time
Opportunity Cost of Follow-on Capital
Opportunity Cost of Non-Investment in Competitors
Relationship Cost of SPVs/Direct Co-Investment and LP Credibility
Disappearing TVPI.
Core Investment Tenets from Upslope Capital Management. Fun list to review.
52 Things I Learned in 2022. Not about investing but I thought I’d include it.
Assure, a Fintech Startup Specializing in SPV Administration is Shutting Down. Why does this matter? It was founded a decade ago and was the back office for a ton of SPV activity. Yes, I had heard rumblings from other managers about the poor customer service of Assure, but nothing seemed fatal. From what I’ve heard now, Assure has given customers two weeks to find a solution and will give no refunds (you usually pay $8-10K upfront for the life of the 10-year entity). This means many people running SPVs will be out of cash for administrative expenses they might never incur.
The bigger issue, though, is that it raises questions about other fintech products and companies that are PROBABLY using cash they collected up front to manage a ten-year entity to fund operations today. Did they use models that predicted steady future growth based on two outlier years of activity? Will they survive the next two years? Who knows. Worth considering the possibility.
Selfie & Song of the Week
Signed, Sealed, Delivered.
Video of Stevie Wonder performing live here.
It’s a fun song. It works well for the Delivery Associates deal. And it makes clear what the word delivered indicates (irrefutable results)!
Signed, Sealed, Delivered (I'm Yours) by Stevie Wonder
Here I am baby,
Oh, you've got the future in your hand
(signed, sealed, delivered, I'm yours)
Selfie of the Week:
Thanks for reading, friends. Please always be in touch.
As always,
Katelyn