Month: February 2025

The ownership structure (a.k.a. cap table) of a startup does matter, but it is not the number of angel investors that will decide if a startup can raise money from a reasonably competent venture investor. And it is not even the cap table as a whole.

A company is doing extraordinarily well that have a motivated founding team will be able to raise capital even with an extremely broken cap table (of which the number of angel investors would at most be a minor issue).

Pia Engholm, Mattias Miksche, Douglas Stark, Eric Quidenus-Wahlforss and Sebastian Knutsson have written an opinion piece in Breakit about angel investors and cap tables.

I think the second to last paragraph captures the main point (translated from Swedish):

“We are not aware of a single instance where a VC has turned down an investment solely because the company had a long cap table. However, your cap table should be well thought out, regardless of its length. A short cap table with passive owners can be a bigger red flag than a longer cap table with highly relevant angel investors. Most importantly, the founders and those actively working in the company should have a solid ownership stake and the right financial incentives.”

Two comments:

Firstly, having many investors early on (say 15+ investors at pre-seed) often indicates that the cap table is not well thought out from a value-add perspective (obviously taking into consideration that the most important thing investors provide is capital). If a company has a long list of angel investors like Pia Engholm, Mattias Miksche, Douglas Stark, Eric Quidenus-Wahlforss and Sebastian Knutsson that is something I (and Alliance VC as a whole) believe that is a very good thing.

Secondly, once a startup has raised venture capital (which is not for everyone) I don’t see angel investors being more reliable and supportive owners than venture funds. Sometimes they are, but mostly they are not.

Creandum has lead an investment round of $15 million in Lovable, the Swedish based AI-driven software builder that aims to allow everyone (especially non-software engineers) to develop software.

Building software, even very simple programs, as a non-software engineer is truly a bit of magic. Which is one reason that Lovable has caught on with 30,000+ paying customers and annualized revenue of $17 million, all while spending less than $2 million according to a TechCrunch article.

Lovable is a really good product with extraordinary traction, but as a startup person and investor I find Lovable to be a great example of why startup investing is difficult.

There are many things that make an investment in Lovable seem obvious (and for venture firms getting to that conclusion the main problem is that there was only room for one new venture firm and it was for Lovable to choose which one), but there are also several things that make 99 % of really good investors think more than once before offering a term sheet.

On a venture investor inside baseball side note: the round is being labeled a pre-Series A even if it from the outside looks like a hot Series A to me. As Lovable had previously raised $6.8 million in a pre-seed round from Hummingbird Ventures, byFounders and angel investors, calling it a seed round would in my mind been more elegant than pre-Series A.

I’m looking forward to see Lovable go on and build something very big.

Andrew Chen, general partner at A16Z and author of the book Cold Start Problem, has written Revenge of the GPT Wrappers: Defensibility in a world of commoditized AI models.

It is one, of many, indicators of how fast the AI world is moving. In 2023 ‘GPT wrapper’ was used to belittle AI companies that built applications on top of LLMs. Fast-forward to early 2025 and there is now more respect to product, brand and network effects (which are traditional signs of a good application-layer technology company). Maybe not coincidentally the top Swedish AI startups are all, to larger or smaller extent, ‘GPT wrappers’ and that might not be a bad thing at all.

My good friend Anton Johansson has started writing a Substack. First topics have been vibe coding, 10x leverage from AI, company building and related areas with a personal touch. Read and subscribe if you like it as much as I do.

Easy-to-understand reporting for important sales and marketing KPIs makes decision-making in a startup easier. Good templates also will make board/investor/management reporting easier.

British-based venture investor Blossom has shared a Template GTM reporting template that most companies can take solid inspiration from.

It covers how one can present:

• Quarterly scorecard
• Revenue retention
• Key / Notable deals (new and expansion)
• Key / Notable churn
• AE Quota Performance
• Win Rates
• Closed Lost Analysis
• Pipeline Generation
• Pipeline Coverage
• Pipeline performance in quarter
• Notable deals in pipeline
• Churn Risk
• BDR & AE Productivity
• Demand Generation by marketing
• Marketing pipeline by source
• Actuals vs Budget financial reporting

Spotify has released its quarterly report for Q4’24. The full year ended at €15.637 billion in revenue and €1.138 billion in net profit. In a world where a unicorn is a company valued at more than a billion dollars, it is worth noting that Spotify made more than that in profit in one year.

A quick look at the quarter indicates that the green machine has been humming pretty much as earlier quarters in the year. Users and subscribers grew 11-12 % year-over-year, price increases pushed Premium revenue growth rate to 17 %, there were some headwinds in ad-supported with 7 % growth (slower than user growth).

Gross margin continued to improve both for Premium to 34.7 % and Ad-Supported to 15.1 %. This lead to gross profit grewing 40 % y-o-y compared to 16 % revenue growth. Social charges higher than plan as Spotify’s stock price has been going up (and went up even more after the release of the quarterly report).

It’s impressive to see a large company, like Spotify, going from an annual loss to more than one billion euros in profit in one year by lowering cost, continuing to grow revenue and increasing margins.

Tana, where Alliance VC is an investor, that launched today. Tana is an AI-native workspace for tech-savvy professionals who want to stay on top of everything. More on TechCrunch and ProductHunt. Tana is a Norwegian-US company that in total has raised $25 million from Tola, Lightspeed, Alliance VC, Northzone and firstminute Capital and several angels.