Allied Venture Partners

Hello Partners,

As a current or prospective partner, this newsletter provides exclusive insights into our investment strategy, portfolio companies, and industry trends.

Thank you again for your continued trust and support,

Matt Wilson, MBA

Founder & Managing Director | Allied Venture Partners

Team Updates

• Our core team, including Steve, Melinda, Brendan, and Colton, is finalized.

• The Scout and Advisory programs continue to expand with several new members each week, providing quality diversified deal flow from across Canada and the United States.

New Deals

• Before the holiday break, we closed our Seed investment in Bavovna AI. Thank you to all those who participated. You’ll notice on your LP dashboard the company has already shared some exciting traction updates.

• To start the new year, we are fundraising for a very exciting opportunity in the AR space alongside the upcoming launch of the Apple Vision Pro headset. Please see your LP dashboard for the deal invite if you haven’t already.

Portfolio News

• In early December, I attended the Boston Techstars Demo Day. It was a fantastic event reviewing pitches and meeting founders. I also met with Matt Morgan, Founder & CEO of our portfolio company, FreightFlows.

• After Boston, I met with more founders, VCs, and LPs in Miami for Art Basel. I had excellent meetups with two of our portfolio companies, Rook and ZenSports. Thank You to my Venture Partner, Steve Walsh, for organizing the trip.

• Roqad continues to grow at an exceptional pace, nearing eight-figure revenue. You’ll find a complete year-end update on your LP dashboard.

• League of Play had a solid finish to the year, signing numerous six-figure brand partnership deals and solidifying their event schedule for 2024. It’s shaping up to be an exciting year.

• Tiliter had an excellent 2023, completing the rollout of its nationwide contract with Woolworths. The team has plenty of runway into 2025 as they transition to a software-focused company.

• In addition to the rebound in Bitcoin, RoundlyX is experiencing strong demand for its new giving vertical product, RaaS (Roundup as a Service). It should be an exciting year as the company explores this new (potentially highly lucrative) vertical.

Industry Insights

I shared some insights in a recent LinkedIn post but wanted to expand on it here.

From what I see, dealflow at the pre-seed and seed stages remains robust. I continually see founders demonstrating an increased ability to launch minimally viable products and reach early traction with little capital.

Most notably, some of the common attributes I’m seeing among the many investment opportunities coming across my desk include:

• Multi-time founders tackling problems from their own experience,

• Companies that have bootstrapped to hundreds of paying customers,

• Healthy 70%+ gross margins,

• Attractive 10-20% month-over-month growth,

• Low-to-mid six-figure annual revenue and;

• Less than $500k in total funding raised to date.

These founders are now typically seeking $750k to $1.5M in funding at sub-$10M post-money valuations to accelerate growth.

In numerous cases, I’ve been skeptical of the market size only to learn that a venture-scale market does, in fact, exist. Founders are finding it increasingly cost-effective to launch an MVP and get to $100k+ ARR while bootstrapping.

For investors, this environment means pre/seed rounds are becoming smaller. As a result, deploying large sums of capital while maintaining the prospect of venture-scale returns is becoming increasingly difficult. Consequently, I firmly believe the investment edge now lies in deploying earlier and smaller checks as companies require less funding to achieve meaningful scale.

Overall, the current early-stage climate is the most exciting I’ve seen in ten years as founders demonstrate a renewed ability to efficiently validate concepts and gain traction with minimal cash burn. As investors, this creates unique opportunities to achieve outsized returns through smaller initial investments.

Now (as it always has), entry price matters in achieving outsized, venture-scale returns. However, these returns no longer require multi-billion dollar terminal valuations when entry points are so attractively low.

2024 is shaping up to be a very interesting year.

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