Former VC Investor - Now Supporting Tech Businesses Turn Strategy into Execution – Whilst Sharing Insight from Both Sides of the Fence

Hey!

I’m Kiran. I’m a VC investor by trade but I quit in 2024 as I knew I was an operator at heart and I wanted to be on the field, not watching and shouting from the sidelines.

In my time as a VC, I met hundreds of founders, deep dived on most sectors within enterprise SaaS and I invested into a dozen companies and sat on each of their Boards. When it comes to startups and scaleups, I’ve seen what works and what doesn’t.

I founded Catenae in 2024 to support enterprise software businesses with their scaling plans. I undertake fractional Chief of Staff roles with my retained clients to help founders translate their strategy into repeatable execution whilst increasing their capacity and making sure the tasks that really move the needle get done. I also work as a coach and a mentor to those looking for less hands-on support but someone to soundboard their ideas, plans or problems with.

If you’re interested in working together on a retained basis, hit me with a DM. If you’d like to book in some coaching time, check out my Hubble page: https://www.hubble.social/kiranmehta.

Alternatively, if you just want some daily insights from one of the few people in the UK that has both investing and operational experience, hit that follow button and ring the bell.

I'm writing a £1m cheque into 10 startups between now and the end of the year. Share with your network if of interest.

'Really?'

No! Neither is anyone else that's posting these kind of posts, they're a LinkedIn growth hack, 99% of them will never write a cheque.

Don't fall for it.

Kiran Mehta

If you're going to include a competitor slide in your deck, what's the best way to do it?

When I was an investor, I hated the fact that 95%+ of decks had a competitor page where there were unanimous ticks in their product features column. I much preferred it when founders where honest and open about the areas they were strong and the areas they consciously chose to not focus on.

In one slide, it showed the founders weren't blinkered to the risk, they understood in detail who’s in their ICP and who isn’t and it demonstrated they have a high degree of humility. A recipe for success in my book.

Far too many times I've seen a features page that looks like the frog watch has a monopoly on the watch industry!

When it comes to LinkedIn there's 4 golden rules I never deviate from:

1️⃣ No AI use in any post creation, there's enough generic content out there without me adding to it.
2️⃣ No ghostwriter, call me old fashioned but I believe a personal brand should be personal.
3️⃣ No 'Comment for X'. If you deliver good content, you don't need growth hacks.
4️⃣ Try to respond to most thoughtful comments, this is a conversation, not a seminar.

Others might be taking different approaches but that's my rulebook and I'm proud to continue to stick to it.

The fundraising market has actually gone mad right now.

If you're a pre-revenue AI business, that's never met a customer in it's existence, it's easier to raise capital than if you're an established business, which knows the market inside and out, trying to raise funds to invest into AI.

If I was managing a seed fund right now I'd be almost exclusively investing into businesses that are doing <£2m ARR and are lean, nimble and have a strong AI strategy to transition from the current SaaS offering to more of an AI agent, for that given market.

When VCs are screening for deals, there's so many questions on post-revenue businesses, from capital efficiencies, to growth metrics, to CAC payback period.

All of those are totally valid when comparing apples with apples. However, right now we are seeing pre-seed businesses being able to raise £10m off a PDF and MVP because they're AI first, yet in many cases they don't know the customer, and established businesses that have the same ambition and tech strategy are being told it's a max of 10x ARR and they only have £1m ARR so the max they could raise is £2m.

If you ask me, that math just ain't mathing and that logic is completely illogical too.

A business worth £5m where the founders own everything creates £5m of value for the founders.

A £100m business that’s raised £100m of capital with a 1x non-participating preference creates zero value for founders.

‘So, what’s your point Kiran?’

This industry is littered with over glamourisation of the fundraising journey. c.1% of businesses are really suitable for VC funding but 90%+ of the industry press covers it.

It’s time we do more ‘business readiness’ than ‘investor readiness’. It’s time to celebrate the founders that started, bootstrap and exit a great business, even though the exit never makes it onto Crunchbase!

Yes, the VC journey is great for the right businesses but it’s a total myth that it’s the only route available.

I was chatting to a US fund recently and some of the things they said really stuck with me.

1️⃣ 'We're an early-stage fund, we invest $3m-$5m into businesses that are approaching $1m ARR'.

↳ Big difference compared to the UK, we'd see that as highly late stage, which shows just how small later stage capital is here.


2️⃣ 'If you're growing >100% year-on-year you can still expect 10x-15x ARR'.
↳ Again, vastly different to the UK, where we are still looking at mid to high single digit multiples, even for those growing well.

3️⃣ 'We close all our rounds in 30 days, if we don't know something after 30 days we'll either never know or it's not worth knowing'.
↳ This is a major problem in UK VC. It's often death by diligence, which drives founder fatigue. US funds just hit different, they want founders energised post-deal, ready to go, not beaten up and needing a break.

One of the things so many VCs forget is at exit the founders will hold all of the cards.

I see far too many predatory VCs out there right now, especially in the UK market.

They're clipping off insane fees, they're putting in funky preference structures, they're pushing founders down on valuation and they forget that one day, in the not so distant future, founders will be the ones sat in front of acquirers.

Think about a deal structure at an exit, the founders are almost always needed in the acquiring company, at least for the transition. They're negotiating the exit value but they're also negotiating their package and potential earn out.

Guess which founders are going to go to bat harder for their salary than exit price? Guess which founders are going to share the real details of how competitive the deal actually is with the acquirer?

You've guessed it, it'll be the ones that the investors haven't treated right on the way in and through the investment period.

The best VCs are founder friendly, one because they're good people but two because they know that one day they'll need the founder to be investor friendly back.

On both sides of the table, the people in the early-stage ecosystem that are surrounded by success realise that this is a long term, multi-round game. It's not a one round negotiation where you can play it as winner takes all.

If you are trying to raise a pre-seed round right now and you are not a previously exited founder and/or you're not building a deep tech AI business, then your most likely source of funding is going to be your customers.

Sell consultancy, sell services, sell a bespoke build version of the product to get some early cash in to build out the tech. It's hard, it's really hard but, right now, especially in the UK, it's a lot easier than trying to raise cash for a pre-revenue business.

What started off as a lighthearted joke with a serious theme of not falling for clickbait quickly turned into quite the social experiment.

A couple of days back I posted the post below and the way the summary function works only the first line was visible until you clicked the 'more' button. I was attempting to let people know that most of these kind of posts are designed to drive virality and nobody that posts them actually writes cheques.

Then, what happened?

I've had over two dozen people DM me their pitch decks. Maybe the problem isn't solely those that post this kind of rubbish, maybe the problem is we live in such an information heavy world where a lot of people (obvs not all, plenty of people got the joke!) have a quick skim read and then act on the summary instead of the whole story.

It's quite worrying in my opinion, I really think as a society we need to get back to a place where we do less things but do them well.

'CEO's should be working on the business not in the business'.

Some of the worst advice possible for any pre-scale business, if you're sub £5m ARR and the CEO is not regularly in the business speaking to the team and out in the market speaking to customers you're going to have a massive problem. Yes, there's a lot of strategic things that will take up their time but you can't formulate any kind of strategy without first knowing what's going on in the business and with your customers.

One of my new year's resolutions for 2025 was to launch a newsletter. It's taken me all the way until December to get there but I've finally got started and hopefully it's a lot easier to maintain than it has been to get going.

I always criticise the news and content that's flying around the early-stage tech and VC space. In my opinion it's far too wishy washy, too generic and doesn't cut to the heart of some of the big problems. Each week I'll be taking one topic, it could be about VC, it could be about tech, it might be some of the scaling pains within businesses and instead of talking about the things that are easy and obvious, we go deeper to look at some of the things we thought were true because they sound obvious but when we look deeper they're actually completely the opposite of what we thought.

This week we're kicking off the first edition with quite a controversial topic at the moment: the state of the UK pre-seed market, how we've got here and what we might need to change to get to somewhere better.

If you prefer short form content, this isn't the newsletter for you, but if you want some deeper analytics check out this week's article and I hope you hit the subscribe button and come back next week, where we might just be taking a deep dive into some of the problems with 'market standard' venture docs.

CFO, CTO, CRO, CMO, CSO, CCO, COO, CXO…

The list is endless.

The list of what?

Over-inflated titles that come back to bite early stage businesses.

For companies that are pre-Series-A, c-suite roles are often not needed. It is highly unlikely that you will be able to afford a plethora of heads that are strategically focussed, which is by definition a c-suite role, but many companies still allocate them.

It then causes a massive problem down the road when, inevitably, the £60k Chief Revenue Officer, with two years’ sales experience, isn’t quite the individual you need to lead the sales team to £10m ARR. You then have the emotional battle of trying to re-arrange the team and people feeling they’re being ‘demoted’ when actually they just had the wrong title in the first place.

What’s a better way of doing this? Retaining headroom in your org chat. If today’s Marketing Manager has the ability to be tomorrow’s CMO, definitely get that on both party’s agendas, and that could totally be Plan A.

However, don’t sell titles early to try and attract talent. It’s potentially solving today’s problem but almost certainly causing a tsunami for further down the road.

A founder asked me the other day 'I have two term sheets on the table, which one should I take?'

My advice was take the offer from the one that responded the quickest. The founder said that sounds neat but don't you want to read the term sheets first?

So we opened them up and guess what we found. The one that made the decision the quickest had no fees (compared to a 5% arrangement fee and £12k annual monitoring fee from the other), they had a much lighter touch due diligence process (there's very little to diligence at pre-seed anyway) and they wanted to invest into the same share class as the founders whereas the other wanted a downside liquidation preference (tbf I don't mind a downside protection, it's participating preferences I don't like, but still someone going into the ords is even better).

Of course, I'm not advocating playing your hand blind and taking the first offer without considering all the various factors that go into it but, more often than not, speed is a signal of the type of person you are speaking to, their understanding of what building an early stage business really means and what they'll be like to work with post investment.

Reaching out to investors through their website or pitch deck portal is destroying your chances of fundraising.

Like really, if this is what you are doing you might as well not be fundraising at all.

VCs are a wash with deal flow and their website is almost always the worst quality as a cohort. Therefore, even if you're the best company in the world, going through their website is putting you into a bucket where the VC knows the quality is usually minimal and therefore isn't worth much of their time.

They'll skim that deck in even less time than the 150 seconds the average pitch deck gets reviewed in.

So, what's the best way to make that first contact with a VC?

Either:
1️⃣ A warm introduction; or
2️⃣ None generic direct outreach on LinkedIn.

Queue the uprising on VC is an elitist circle, it's all done on warm intros. That's actually not the case, a warm introduction is way way easier than most people think, it just requires a little bit of patience and some hard work. As a founder, the easiest people to network with are other founders. A lot of other founders will have angels and VCs on their cap table that you want on your cap table. They are the best source of introductions as their views carry weight with investors (a founder likely knows what another good founder looks like) and they're relatively easy to do, with that little bit of work and patience.

If you absolutely cannot get an intro to the person you want then direct outreach on LinkedIn is the next best way to go, imo. Again though, it can't be a copy and paste where you forget to change the investors name. There has to be something tangible that's personal to that investor (previous deals they've done, content they've posted, etc.). Back to that term patience again, it's also a lot easier if you spend a bit of time interacting with your preferred investor(s) before hitting them with a pitch deck and InMail. Comment on their posts, build relationships and be someone they'll recognise before you land in their inbox.

It's hard but the VC funnel is so brutal, funds typically invest into 1% of the deals they see. As a founder you can either complain about the way the industry works or use it to your advantage to stand out from the crowd.

For startups and scaleups when it comes to finding the right talent and building the right org chart, it's way easier to mould your roles around good people than it is to try and mould your people around rigid roles.

The biggest mistake I see with company's early hires is they put way too much emphasis on how well someone will fit for a role when the reality is you just need smart people that get stuff done, it's the people that are just on the cusp of being founders themselves but don't quite want to take on that financial risk that you should be looking for in those early hires.

Of course, they've got to have the technical skills to do that given role, I'm not talking about putting a Marketing Exec into a Development role, but you don't need the person with the best domain skills in their area, you need those that will think of the business holistically, get stuck in and drive change across the business, not just do their role with blinkers on.

LinkedIn is so hard, thinking of original content most days gets tougher and tougher every single week, after posting daily for the past 3 years I am starting to run out of things to say.

If anyone has any topics they're interested in me talking about, drop me a comment below and together we can replenish the ideas list.

Most of the advice on LinkedIn comes from investors and that's great but a lot of it doesn't reflect what your customers are feeling and doing. If you're a consumer business or B2SME then maybe vibe coding is a good way to get started, if you're enterprise SaaS asking people to part with 5 figures per year then the likelihood of getting your solution vibe coded platform adopted by clients is a number extremely close to zero imo.

There's a huge irony here that there's a V missing from the right hand side of this graphic and after half a dozen re-prompts I still couldn't get it to change it without it changing the rest of the image, so when it comes to vibe coding, images is hard enough, never mind full stack SaaS platforms.

'Pitch decks are useless, I'm thinking about recording a loom of myself delivering the pitch and sending that to VCs instead'.

A few people have mentioned this to me recently and honestly it's quite the double edged sword. Whilst I actually agree that a video is a lot easier to convey who you are, what the business is doing and why you're doing it, it still isn't well accepted from a lot of VCs. The reality is, VCs love the pitch deck because it allows them to skim read and make a decision in literally one or two minutes. If you send a 10 minute video pitch, one of two things are going to happen:

1️⃣ If they actually watch the video, an investor is much more likely to take a meeting; or
2️⃣ They simply won't watch it and won't reply, giving you less likelihood of success than sending the pitch deck.

One isn't better or worse, you've just got to pick your poison: do you want a greater chance of it being opened but through a vanilla medium or do you want something that stands out from the crowd but may get ignored all together?

Imagine if every company sacked their CEO every four years and the next CEO was elected based on a popularity contest from their customers.

That would seem quite the flawed system to most but that's also the exact reality of how politics work, you give someone a four year tenure, where in the first year they're able to blame their predecessor, in the middle couple of years they try and do what they think is right and in the final year they drop prices and do what's popular because their main objective is not running the country but lobbying for re-election.

At the moment, whichever party is in-power is unpopular but usually if everyone is wrong then the problem is with the system not the participants.

Am I the only one that thinks that four year terms just simply aren't long enough and if you want to do something well you need to give people enough time to make longer term choices and actually be around to see how they play out?

It's so cliche but the best people I work with never assume others know less than them.

We've all seen it right?

'The competition don't know what they're talking about'

'That ex-employee was clueless'

'Potential investors don't understand what we're doing'

The list goes on and on but it isn't helpful the the business and it almost never drives the right outcome.

The best founders that I have worked with always assume that there's some level of information and insight that they can take from others. They're often delivering a better product than their competitors but they know there's one or two features or one or two GTM strands that they could implement in their business to move faster. They know it didn't work out with that ex-employee but they listen to their concerns and ask themselves if something needs to change. They're frustrated that they haven't raised from a given investor but they take their feedback onboard and at least stop to ponder, could we do something different or at least explain it differently.

Like I said, it's super cliche, but the best founders really do have the most open minds and recognise that there's something we can learn from everybody.

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