My 2022 angel investment thesis

My startup investment experience:

My startup investments include:

My investment portfolio. Alto Pharmacy (Seed); Narrator.ai (Series A); Depict.ai (Seed); Fathom Video (Seed); Gorgias (Series B); Alba Orbital (Seed); CaptivateIQ (Series B); Deel (Series C); Vitally.io (Series A); Canvas (Seed); Navattic (Seed); Treble.ai (Seed); Cointracker (Series A); Initialized Capital (Fund VI); DEX Screener (Seed); Maverick (Seed); Pioneer Fund (Alumni Fund 2022); Givebutter (Seed);
My investments from 2015–2021

What I look for:

  1. I invest in SaaS, and moonshots. But mostly SaaS.
  2. I define moonshots as tech companies that are a potential paradigm shift for a given sector (e.g. Boom, SpaceX, Solugen, Netflix, Instacart, Cruise, Bedrocan, etc.) or developing locale.
  3. I invest in Seed, Seed-extension, and Series A rounds, with a slight preference for Seed-extension.
  4. For SaaS, I look to invest in companies with vital metrics above or around the 75% percentile; the article Measuring and benchmarking the four vital signs of SaaS is good reference in that regard. I’m pretty focused on velocity, so ARR volume and growth rate will be my main focus. Great net dollar retention can also be very compelling.
A chart showing revenue breaks by stage, annual recurring revenue amount, and annual recurring revenue growth rate.
Measuring and benchmarking the four vital signs of SaaS, Techcrunch

What I offer in return:

  1. Founder empathy and peer mentorship. I’ve been an operator (founder) for 11 years. I’ve bootstrapped 2 companies from zero to 7 figures in annual revenue, and I’ve grown a company to 8 figures in annual recurring revenue. Startups are hard- I fully understand that my investment is likely to go to zero. Whether you’re thriving or failing; I’ll be there if you’d like my help. That said, sometimes founders prefer investors to invest and then be completely hands off — and I can appreciate that as well.
  2. Scaling/company building advice. Tying hiring plans to goals/OKRs, hiring at the right level (according to the stage of the startup), change management. Stuff like that. I’ve scaled companies from 0 to close to 200 team members, and I have organizational learnings I’ll be happy to share.
  3. SaaS best practices. Best practices for low and high touch SaaS models, product led growth (PLG), and go-to-market motions (Shogun Page Builder is low to high touch SaaS, Shogun Frontend is high touch). Personalized review and advice on metrics that matter for SaaS company health, and optimal fundraising.
  4. Navigating pivots. At the outlay in Spring 2015, Shogun was a page builder for Rails web applications. But that didn’t go so well. In Fall of 2015, we pivoted to become a page builder for Shopify, and by 2017 Shogun had become a page builder for ecommerce platforms, generally (i.e. Shopify, BigCommerce, Salesforce Commerce Cloud, etc.). And in 2019 we innovated a completely new product; an ecommerce focused “frontend-as-a-service ” platform. I believe pivots are less of a scary thing, and more of a common characteristic of successful startups.
  5. Structured advice and co-working sessions for fundraising process. Most of my investments appreciate advice and collaboration on running a successful fundraise process. Fundraising is hard, and the way that you structure your process, and how you negotiate on terms, matters a lot. With Shogun, we bootstrapped to $1.2M ARR, and then raised:

A note on the unit economics of tech startup investing:

2020 and 2021 were a pretty crazy time for startups and fundraising. Valuations got out of control. The risk to reward ratio got wonky. There has been a market correction as a result.

Bar chart showing “The realistic case” for VC investment portfolio. Five startups fail and do $0, three exit at $25 million, one exits at $200 million and our superstar does $1 billion.
The meeting that showed me the truth about VCs, Techcrunch

In closing

My interest in investing in startups goes beyond financial gain.

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Nick Raushenbush

Nick Raushenbush

Cofounder @Shogun (eCom SaaS), former Cofounder @ Glass + Marker (creative agency). Y Combinator alum. Angel investor. LP in Initialized and Pioneer Fund.