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Allied Venture Partners
LP Newsletter: 22 January 2025
Matt Wilson
January 22, 2025 • Estimated Reading Time: 5 minutes
Hello Partners,
As a current or prospective partner, this newsletter provides exclusive insights into our investment strategy, portfolio companies, and industry trends.
Thank you for your continued trust and support,
Matt Wilson
Founder & Managing Director | Allied Venture Partners
Not an LP? Click here to join the Allied Venture Partners syndicate.
Team Updates
New Deals
Thanks to those who participated in our latest stealth investment over the holidays. The company is targeting a public launch in March, at which point we can share more details.
Our latest investment opportunity is set to launch next week. Please keep an eye on your inbox for the invitation.
2025 is off to a busy start, and we have multiple new opportunities in diligence. I look forward to sharing more with you in the coming weeks.
Portfolio News
Fonbnk had a standout 2024, growing 520% YoY. A full update was shared with participating investors last week.
Distributions from the recent Bundle sale were sent to investors on January 10. Thanks to those who supported the company over the past 3.5 years.
Ediphi grew 200% for the second consecutive year. Congratulations to the entire team on a great 2024. 2025 is shaping up to be an exciting year.
Thank you, Brian Bell at Team Ignite Ventures, for having me on the podcast to discuss investing and early-stage tech startups. Brian is a great investor, and it was one of my favorite podcast discussions yet!
Industry Insights
[If you missed it, my 2024 letter is available here: Annual Investor Letter.]
The new year has brought an exciting surge of startup activity. This month, I've already reviewed over 100 pitch applications and spoken with nearly two dozen founders.
While the quality of deal flow and talented founders continue to impress, I want to share a concerning trend I'm seeing that could negatively impact both founders and investors.
Beware: the rolling SAFE
I recently met a founder raising $2M on a rolling SAFE. On paper, everything looked solid, and they had already secured $1.5M in commitments. But during diligence, a concerning pattern emerged.
That $1.5M hadn't come in as a single coordinated round. Instead, it had trickled in (and been spent) over the past 12 months.
The company's actual cash position? Just $150K, with three months of runway remaining.
This scenario is becoming increasingly common, and it creates a dangerous cycle. The founder finds themselves in perpetual fundraising mode, unable to entirely focus on what matters most—talking to customers and building products. Each new check becomes a temporary bridge rather than strategic capital.
What’s a better strategy?
The most successful raises I've seen take a different approach.
Rather than keeping a SAFE perpetually open, these founders run focused fundraising processes with clear targets and timelines. They set aside 3-6 months to raise their full target amount - in this case, $2M.
Only after reaching this goal, and if there's excess investor demand, do they consider keeping the SAFE open on a rolling basis and oversubscribing the round (or launching a new SAFE with a higher valuation cap, if supported by KPIs).
This strategy gives founders what they truly need: a strong balance sheet with 18-24 months of runway and the mental space to focus entirely on building their business. It also sends a strong signal to prospective investors that the company is well-capitalized and strategically focused.
As it has always been, the devil is in the details. This is precisely the kind of nuance we look for during our rigorous due diligence process, and I encourage my fellow investors to do the same.
Happy Investing
As a reminder, our Core Investment Values since Day 1:
