Late-stage VC market update + Terra Kaffe's Sahand Dilmaghani | E1891

Late-Stage VC Funding and Exits

• US VCs have a record $311 billion of "dry powder" available for investment, but the pace of exits has slowed down significantly in 2022 and 2023.
• The average exit value from 2013 to 2023 was $185 billion per year, but excluding the 2021 boom year, the average drops to $125 billion per year.
• The slowdown in exits has led to a situation where VCs are unable to return capital to LPs, which in turn affects the ability of VCs to raise new funds.
• Some VC firms are exploring continuation funds as a way to provide liquidity to LPs by selling stakes in their portfolio companies to other investors.
• The current market conditions are leading to down round IPOs, where companies are going public at valuations significantly lower than their last private market valuation.
• LPs are becoming more cautious and may write smaller checks or stop investing altogether.

Terra Cafe

• Terra Cafe is a direct-to-consumer super-automatic coffee machine that offers convenience, quality, and a modern design at a competitive price point.
• The company has received over 10,000 units of demand in pre-orders alone and is expecting to ship the first units of the Terra Cafe 2 soon.
• The V2 super-automatic espresso machine focuses on hardware design, software, and data to improve the user experience.
• Investing in quality components, firmware, and thermal blocks ensures consistent quality over time.
• The V2's durability and commercial viability make it suitable for various settings, including offices, retail showrooms, and universities.
• Long-term software updates and data analysis aim to reduce product costs and enhance the user experience, building customer loyalty and goodwill.

TKO2

• The TKO2 is not ideal for offices as it is designed for small offices or locations with 10-20 people.
• The TKO2 has a larger water tank, waste bin, and bean hopper compared to the TKO1, making it easier to clean and maintain.
• The TKO2 features an automated and actuated grinder dial, allowing for true drip coffee and precise coarseness settings.
• The TKO2 has separate espresso profiles and custom drink options, allowing users to create and save their preferred drinks.
• The TKO2 can be upgraded through an app, allowing for customization and improvement over time.
• The company has built a waste savings calculator into the app for the TKO2 to help users track their savings.

Nuts.com

• Nuts.com is a one-stop shop for freshly roasted nuts, dried fruits, sweets, and pantry staples, offering a wide variety of products and prioritizing quality.
• New customers at Nuts.com can receive a free gift with every purchase and free shipping on orders of $29 or more.
• The company is cautious about expanding into new channels to avoid sacrificing brand equity and reputation.
• The company is considering offering buy now, pay later options through a partnership with Clara.

Founder Fridays Meetups

• This Week in Startups is launching a new initiative called Founder Fridays Meetups.
• These meetups are exclusively for founders and provide an intimate setting for founders to connect and share ideas.
• There will be no service providers or passive speakers at these meetups.
• The first Founder Friday meetup will be held on February 2nd, and they will be held on a rolling basis thereafter.
• Founders can join existing meetups in their city or start their own.
• River, a software platform, will be used to organize the meetups.
• Hosts and attendees are already lined up in several cities, including San Francisco, New York City, Toronto, Los Angeles, Las Vegas, London, and India.