Pre-Money: June 3, 2024

VC doublespeak, a Waystar is born, the grand reset, climate heating up & more

Brought to you by 3i Members, the global deal network for accomplished private investors

The Vibe

The week’s most important happenings

A President was found guilty, GPT turned four, and markets kept chugging along. With June’s arrival, lots to track in the ecosystem:

  • A Waystar is born

  • VC Doublespeak

  • The great reset

  • xAI’s billions

  • PE writeoffs

  • Climate still hot

  • and more…

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The week’s top performance indicators

Based on publicly available data from Thompson Reuters, NASDAQ, CNN Business & other third-party sources.


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Dots & Lines

The week’s top takeaways

  • Reckoning has arrived: VC thought leader and Vincent podcast guest Frank Rotman of QED laid out the case that the end of ZIRP-era venture capital is here, and an ecosystem “do over” is underway, in his Twitter thread “The Grand Reset.” He argues that companies were over-funded and over-priced from 2018-2021, and now reality has set in. Funds from that era will underperform, and companies are constrained as they amble towards IPO or exit. Managers are now playing to get their cash back, relying on liquidation preferences to drive performance rather than expecting extraordinary outcomes to return their funds. Don’t despair, though. The ecosystem reset, he states, will clear out the backlog and usher in a new era of investing in more of the profitable, durable businesses venture was designed to fund.

  • Waystar on the way: The tech IPO spigot continues to flow, or at least trickle. Louisville-based Waystar (no, not that Waystar…) is a payments provider for healthcare companies, and plans to raise $800M-$1B at a $3.8B price when it debuts on Nasdaq as WAY in the coming weeks. The business was created in 2017 by the merger of two cloud companies, Navicure and ZirMed, and pegs its most recent valuation at $2.7B. It brought in $791M of revenue in 2023, with a net loss of $51.3M, and grew 12% last year. It boasts 30,000 diversified customers, more than $5B in annual transaction volume and the obligatory use of AI in its workflows. The offering will shed some light on where public market sentiment lies on healthtech and could open the door for additional healthcare IPOs that have been scant since 2021.

  • Decoding the VC signals: Famously, venture capitalists don’t always directly say what they mean, choosing optionality over directness. You’d think a VC writing a check is an absolute expression of conviction in a founder and a business, with the investor’s career on the line. But in many cases, different incentives are at work. For example, Newcomer looked at Sequoia’s unwavering multibillion dollar bet on Elon Musk’s portfolio of companies - including shakier ones like The Boring Company and X. It suggests they are opting into the set in order to be perceived as loyal and avoid being left out of the next deal, and buying diversification since they don’t know where the founder’s focus will lie at any point in time. Another example of doublespeak can be found with multi-stage funds who invest in seed rounds. Such funds often write what is to them a tiny check despite anchoring a round, which gives them a call option - a chance to get involved later if they are so inclined - but little skin in the game. The next time the company has to raise capital, it can be left in a bind if the firm isn’t all-in. As an investor, be sure to know why the big name VC you’re following is in the deal, not just that they are there.


On the latest episode of TechCrunch’s flagship Equity podcast, Everywhere Ventures’ Jenny Fielding talks about how startups are facing what she calls “The Series A chasm.”

Deal Points

A few items of interest

investor-friendly terms like liquidation preferences have become more common than ever in extension rounds companies are raising today, per Carta

The Forecast

Looking ahead to this week

During the week of June 3rd, watch out for:

  • Earnings from Bark ($BARK), Crowdstrike ($CRWD), Docusign($DOCU) and Rent the Runway ($RENT)

  • Final Q1 productivity measure on Wednesday

  • Initial June jobless claims on Thursday

  • US employment and wage reports, and consumer credit, on Friday

  • A peek at six planets in alignment in Monday night’s sky

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