👋 Hi, I’m Andre and welcome to my newsletter Data-driven VC which is all about becoming a better investor with data & AI. Every Tuesday, I publish “Insights” to digest the most relevant startup research & reports. Every Thursday, I publish “Essays” that cover hands-on insights about data-driven innovation & AI in VC, and every Sunday, I publish “Picks” to spotlight the hottest Stealth, Early, and Growth Startups. Follow along to understand how startup investing becomes more data-driven, why it matters, and what it means for you.
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Investing in Iconoclasts
Adam Shuaib from Episode 1 recently published insights into what they call the “iconoclast score”. They measure this property for the founders that they invest in to see how predictive for success it is. Spoiler alert: Iconoclastic founders tend to win!
Quirky backgrounds: Maybe they started coding at age 12, free-climb buildings for fun, quit university to live in Panama for a few years, or speak 6 languages.
Unique assessment: E1 created 5 binary factors to assess how iconoclastic a founder is, spanning early childhood signals, quirky hobbies, unique career trajectories, and obscure skills. These factors combine to give each founder a score from 0 to 5.
Predictive power: This iconoclast score was the single most predictive variable in E1's AI model (!). Founders with a top score were almost 6x more likely to raise a future Series-A/Series-B round.
✈️ KEY TAKEAWAYS
Embracing unconventional backgrounds and unique skills can significantly enhance a founder's chances of fundraising success, far outweighing traditional metrics like elite education or top company experience.
SaaS Growth Stagnates in H1 2024
According to ChartMogul, Growth in the SaaS sector remains sluggish through the first half of 2024, continuing the trend from 2023. While certain segments show slight improvements, overall growth is slow and uneven across the industry.
ARR Steady at 23%: Median ARR growth rates linger around 23%-24%, mirroring the end of 2023.
ARPA Segments Improve: Companies with average revenue per account over $1k and $250-$500 see growth upticks of 4 percentage points (pp) each, reaching 45% and 26%, respectively.
$8-15M ARR Growth: This segment shows a 5pp increase, with top quartile performers growing at 68%.
✈️ KEY TAKEAWAYS
Despite minor gains in specific ARPA segments, SaaS growth remains largely flat, underscoring the challenges faced by the industry in reigniting substantial growth.
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