Michael Houck

I’ve spoken to over 2 dozen MDs at PE firms I can confidently say that the arb of figuring out how to implement Vertical AI at portfolio companies is very real right now It will fundamentally change underwriting for those who can do it predictably and unlock generational returns. Most are aware they need to act. Very few have.

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Founders often scramble to prep materials *after* a VC shows interest. That’s backward. You should be ready for diligence before your first meeting with a VC. Smart founders: 🗂 Have their data room ready 📊 Can share a clear KPI dashboard if asked 💸 Keep clean, up-to-date financials 📣 Track and communicate metrics Flailing around getting your files in order can erode investor trust. Put in the work ahead of time and it will build confidence in you and your company. #FundraisingAdvice #StartupTips #RSCMFounderFriday

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Two trends in fundraising that I’m seeing on a daily basis: 1/ The "we'll monetize later" era for infrastructure startups is dead "We'll figure out revenue once we have users" / "we're focused on adoption first"/ "monetization comes later" This worked in 2021. It doesn't work now. Today’s market won’t reward research organizations or companies that believe in perfection over getting it in users' hands. If you don't have a clear path to revenue… you won't get funded. period. VCs aren't writing checks hoping you'll figure it out later. 2/ "Vibe ARR" is everywhere Remember Jasper? hyper growth, but the model companies ate them alive. We're seeing this again. Companies growing really quickly on point-in-time technology that isn't defensible These companies look amazing on paper. Growth charts going up and to the right. But if you think models are getting better and becoming platform companies, many solutions become obsolete. 

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Over the past few years, fundraising has become significantly tougher, especially for smaller funds. This, unfortunately, is the case even for VCs delivering solid returns. In my recent Crunchbase piece, I talk about how emerging managers can survive (and even thrive!) in a challenging fundraising environment. I discuss why the process today is more about familiarity than performance, and highlight places where managers should look for capital that others ignore. Check out the full column via link in comments. Curious to hear from other managers who have recently raised successfully. Which part of this rings true?

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Fundraising CEOs: Know your numbers cold. Not just the obvious ones. Know things like underlying growth drivers, cohort-level retention changes, why NRR dipped last month, user behavior patterns and so on. If you don't know your KPIs as CEO, you won't get a second meeting. No exceptions.

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"So what exactly is a venture studio?" I'm not sure how many times I've had this conversation over the last few years. At least a few times / week. For aspiring venture builder - especially those in institutional settings, 'getting' the model - and understanding how it differs from others - is critical. So, we're starting at the beginning. On March 19, I'm sitting down with Matthew Burris for the first session of the The Venture Studio Forum's University Track Speaker Series. Matt is widely credited for helping to define the venture studio asset class - he co-authored the Venture Studio Index and built the Three-Role Framework that the industry uses to classify studios. He's spent more time researching what makes a studio a studio than anyone I know. If you're at a university, research institution, or economic development org trying to figure out whether a venture studio makes sense for you, this is where to start. Note, this event kicks off a five part-series we're running through the VSF, all focused on helping institutions understand and evaluate the model. Here's the full program: Mar 19: What Is a Venture Studio? Apr 16: University Studio Examples May 21: Funding Mechanisms Jun 18: Finding & Working with Studios Jul 16: Sourcing & Evaluating Founder Talent Registration link in the comments!

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𝐑𝐚𝐢𝐬𝐞 𝐌𝐢𝐥𝐥𝐢𝐨𝐧𝐬 (𝐁𝐲 𝐇𝐮𝐬𝐭𝐥𝐞 𝐅𝐮𝐧𝐝) A practical, founder-first guide to how early-stage fundraising actually works—based on real investor behavior, not pitch theory. Key Takeaways: 1️⃣ Fundraising is a system: Targeting, sequencing, and momentum matter more than a great story. 2️⃣ Signals beat effort: Investors react to traction, clarity, and risk reduction—not hustle or long decks. 3️⃣ Mechanics decide outcomes: Timing, dilution, and investor selection compound far more than valuation. Bottom line? Fundraising isn’t about persuasion—it’s about engineering proof and leverage. P.S. Want a PDF of Raise Millions? Get it free: https://lnkd.in/guuxKa-J ♻️ Repost to help people in your network. 💡 Follow Alejandro Cremades for more strategy insights.

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Hot take: Big SaaS isn't dying. Not even close. SaaS incumbents have structural advantages that matter even more in an AI-driven world: proprietary data context, embedded governance and authority, deep distribution, and durable ecosystems. These are exactly the things most AI-native startups are trying to earn, and it's harder to work backwards. SaaS incumbents with a clear AI vision and tight execution will not only survive, but benefit from the AI revolution. This Avenir deck was a good reaffirmation of that view. Worth the read. Link in comments.

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Hot take: if you have users and revenue, you should tell investors that. You’d be shocked by how many decks I see that seem like totally philosophical idea-stage decks, then when I ask the founder about traction, they give me numbers that are nowhere to be found in the deck. No traction is too small. One customer is worlds different from zero customers. If you have any customer at all that uses your product, likes it, and/or pays for it, you’re ahead of so many early-stage founders raising on nothing but a dream. If you want to make sure your deck doesn't short-sell you, we do free deck reviews here: https://lnkd.in/gTK_SN2R #startups #venture #VC #founders #tech #fundraising #pitching #investors

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If you look at the early-stage fundraising funnel, conversion rates are tightening, but the companies that do raise are doing so at higher valuations and with larger checks. The market seems to be betting on fewer winners, but those winners will be bigger. I’m not convinced. I do believe the very biggest winners will be larger than ever as AI expands the reach of technology, largely by replacing labor. But I don’t believe there will be fewer winners overall. Most B2B solutions are moving toward verticalized, specialized use cases that deliver superior value compared to generalized horizontal platforms. That shift should create more winners. While these vertical players may not reach the scale of the horizontal mega-winners, they can still generate the kind of multibillion-dollar outcomes that venture is built to fund.

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If you’re comparing venture studios to VC funds, you’re asking the wrong question. Venture studios aren’t venture capital. They’re something else entirely. Studios are closer to private equity than venture capital. Why? A few key differences: We don’t just write checks. We build the companies ourselves. We enter at Day 0, not Series A. We validate ideas, assemble teams, and scale with operational support from day one. That means more control, more ownership, and if done right, superior returns. Venture studio managers also raise from a very different set of LPs. High-net-worth individuals. Family offices. Strategic operators. And raising from them isn’t just about performance metrics. It’s also dinners, events, long conversations, and emotional alignment. That’s fun at the start. But over time, it becomes a full-time job in itself. In this model, you don’t just manage capital. You manage relationships. And when you’re also leading product reviews, hiring calls, and sprint retros, you’d better have a deep reserve of energy. Studios win by being builders and communicators. If you can’t do both, don’t do this model.

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VC Fundraising 99% of founders pitch VCs wrong. After reviewing 1,000+ startup pitches, I've noticed a pattern that kills most fundraising attempts before they even start. Most founders walk into that room talking about their product. Features, functionality, technical specs. They're solving for the wrong equation. Here's what actually gets checks written: VCs don't invest in products. They invest in markets. The winning founders I've backed all understood this. They didn't lead with "Here's what we built." They led with "Here's the inevitable future we're capturing." Think about it: Every VC has seen brilliant products fail because the market wasn't ready. And they've seen mediocre products win because they caught a wave at exactly the right moment. The shift is subtle but powerful: ❌ "Our AI platform has 47 features that optimize workflow efficiency" ✅ "Remote work created a $40B productivity crisis. We're capturing that tailwind." ❌ "We've built the most advanced blockchain solution" ✅ "Traditional finance is breaking. We're building what comes next." The best pitches I've seen make me feel stupid for not seeing the opportunity sooner. They don't sell me on their startup—they sell me on inevitability. Your pitch should answer one question: "How big can this get?" Not: "Look what we built." Not: "Here's our roadmap." But: "Here's the massive shift happening, and here's how we win." If you can't explain your startup's market opportunity to a 12-year-old in one sentence, you're not ready to pitch VCs yet. Complexity kills checks. Clarity creates them. I'm always looking for founders who understand this distinction. If you're raising capital and think you've cracked the code on market positioning, I'd love to hear your one-liner. What's the inevitable future you're building toward? Drop it in the comments or reach out: https://bit.ly/pitchIV

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