Connor Frischmeyer

Co-Founder & Partner at Auxo Partners // Amateur Musician

[Connor Frischmeyer @FrischmeyerC]

@justindross Need to learn more about this!

[Deedy @deedydas]

I'm never going to consume news the same way.

"Claude, generate me a detailed interactive website covering the ServiceNow acquisition of Moveworks"

It generated this insanely good report in ~60s using the new web search. Consultants charge ->$10k and 4 weeks for this!

[Connor Frischmeyer @FrischmeyerC]

@Andrew_Namanny The World wants more of your art! Tell me I’m next?

[Connor Frischmeyer @FrischmeyerC]

Something I'm reading today. #2 and #3 were the most interesting to me.

https://t.co/60wbip6GjW

[Connor Frischmeyer @FrischmeyerC]

@roshanpateI @jefielding There's also the problem of capital-intensive startups (not as relevant to either of you) where cash burn does need to be monitored from day 1... e.x. energy, robotics, hardware, other kinds of deep tech, etc.

[Connor Frischmeyer @FrischmeyerC]

@roshanpateI @jefielding However, an understanding of unit economics and how they might scale, expected cash burn and runway at close, some preliminary research on CAC, etc. is important. Far too many promising companies burn out early because cash evaporates faster than expected.

[fintechjunkie @fintechjunkie]

Right now, "mistakes were made" is a hot topic of discussion in the startup ecosystem.

Here are a few common learnings I'm hearing from Investors who don't want to repeat the mistakes they made during "peak madness".

Theme 1
Paying crazy prices was just playing the game on the field. It was market at the time and the alternative was to sit out the cycle.

Learning 1
An entire vintage of VC funds are going to underperform as a result of everyone "playing the game on the field".

And an entire vintage of startups will have LOWER odds of success due to their messed up cap tables, sloppy deployment of capital and mis-aligned incentives (existing investors vs. new investors vs. the team).

Raising the bar and pacing the deployment of capital would have been better than sitting out and better than fully leaning in.

Theme 2
The deals were moving so quickly that conducting proper diligence was impossible. Credible teams with tangible momentum, a cap table with Tier 1 Investors and 3X+ growth projections were almost rubber stamped.

Learning 2
The speed dating that took place between Investors and Founders during peak madness is frequently ending in tears. Most first Board meetings post-investment were "oh shit" Board meetings because Investors finally had the time to dig in and understand what they invested in.

Many Investors feel "fooled" by the highly sanitized views of the startups they invested in when timelines were compressed which has led them to feel low/no attachment to these companies if they need help or money.

Theme 3
It was very difficult to win a deal without offering an uncomfortably large amount of capital and being OK with the “use of proceeds” going to unproven initiatives.

Learning 3
Abundant capital led to Founders biting off too many new initiatives and hiring too many people too quickly. And the environment led to Investors giving bad advice on what startups needed to accomplish with the capital they were raising.

The combination has created a class of companies that burned a lot of cash without a lot to show for it which has made them incredibly difficult to fund. Somebody has to take the hit for these mistakes which has created a lot of animosity between existing Investors and Founders. Wasted money hurts Investor returns and wasted money dilutes Founders which has led to many “why bother” situations.

Theme 4
The distortion caused by the combination of an abnormally low interest rate environment and pandemic trends made many startups look better than they actually were.

Learning 4
One of the most important questions to answer when funding a startup is “why now” and unfortunately the “why now” for many startups funded during peak madness was fueled by temporal market conditions.

Most of the historically greatest startups were built on top of new S-Curves that represented permanent change (i.e. – internet, mobile, cloud, etc). But during the ZIRP era, many startups were scaling products that only worked in a low rate environment with free flowing capital. When these conditions “normalized”, many startups found they no longer had product market fit.

The TL;DR is that the mistakes that were made during peak madness are going to color how VCs think going forward and what types of Founders/Startups get funded. And unfortunately the mistakes that were made will almost certainly have a lasting impact on an entire vintage of Startups.

[Connor Frischmeyer @FrischmeyerC]

PopViewers is pioneering the future of data and viewer sentiment-informed content generation (on the B2B side), and providing a fun way for fans to provide feedback on their favorite shows (on the B2C side).

Keep up the good work @WitherspoonC

[Connor Frischmeyer @FrischmeyerC]

A few weeks ago I had the opportunity to see @WitherspoonC of @PopViewers present at the @Techstars Demo Day in NYC. I've been working with Chris for the past few months and am incredibly proud of what they've accomplished so far.

Here are a few behind the scenes shots

[Connor Frischmeyer @FrischmeyerC]

My impression from Auxo's clients is that (in addition to the long-standing things like team, problem/solution, initial traction, etc.) it's financial profile.

What do unit economics look like? Do they scale over time? How about CAC? What's the companies cash burn rate? Etc.

[Connor Frischmeyer @FrischmeyerC]

Came across this chart from @PitchBook recently stating we're in the least startup-friendly capital environment in 10+ years.

VCs what metrics are you looking at right now?

[Connor Frischmeyer @FrischmeyerC]

@C2DaJMan Report attached here: https://t.co/7nPNiq8Uef

Analysis was done at current oil prices, but could of course be updated with new numbers

[Connor Frischmeyer @FrischmeyerC]

Last week I chatted with a macro hedge fund analyst on the future of energy markets.

We discussed potential tailwinds for clean energy in the next 5-10 years.

Here are a few key points in the context of electric vehicles:

[Connor Frischmeyer @FrischmeyerC]

𝟰. 𝗣𝗿𝗼𝗹𝗶𝗳𝗲𝗿𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 ���𝗹𝗲𝗮𝗻 𝗲𝗻𝗲𝗿𝗴𝘆 𝗻𝗲𝘁𝘄𝗼𝗿𝗸𝘀

Startup companies are increasingly tackling the network problem. Widespread distribution of charging facilities is a challenging and capital intensive problem, but one that is being solved.

[Connor Frischmeyer @FrischmeyerC]

𝟯. 𝗙𝗮𝗹𝗹𝗶𝗻𝗴 𝗘𝗩 𝗰𝗼𝘀𝘁 𝗶𝗻𝗽𝘂𝘁𝘀

A recent report from Goldman Sachs shows that at the current oil price EVs would break even with traditional gas cars (even without subsidies) by the middle of 2025, and continue to become even more economical over time.

[Connor Frischmeyer @FrischmeyerC]

Interesting trend toward evergreen venture funds from @a16z @sequoia @fundrise and others

https://t.co/kOSXsivAe1

https://t.co/x9BKRUlEW9

[TechCrunch @TechCrunch]

Andreessen Horowitz creates 'Perennial' evergreen fund amid market slowdown https://t.co/IIXhYMzSSU by @jagmeets13

[Hovhannes Avoyan @havoyan]

If you're looking to understand AI better, you've got to check out this glossary from @a16z #ai #GenAI

https://t.co/FchxujOB5x