🌟 Meet the Minds: CVC Investors & Founders

In this new series, we're bringing together insights from founders and angels within our community.

👤 Member Profile: A second-time founder, with 7 years of experience working with commercial teams in NY and Australia.

One common pitfall is individuals with grand visions attempting to do too much simultaneously. Founders must master the art of engaging directly with their product teams, extracting valuable insights, and validating thoughts and assumptions effectively. This iterative process involves asking insightful questions, rather than merely 'selling' your idea, to gather customer feedback that informs your next steps and improvements. Regardless of your approach, a Product Strategy Map serves as a valuable guide to keep you on track.

So, what's the most effective way to validate demand?

1. Use an Opportunity Solution Tree.

2. Build the product with your customers.

3. Improve something that already exists instead of creating something new.

Keen to share your experience? Reach out at [email protected]

🔍 Community Due Diligence

This week, we're excited to share our final Due Diligence for 2023, featuring Sonnant. What a way to wrap up our first year at Community VC with this incredible venture. Led by a founder who previously established and grew a telecommunications company to an ASX listing, Sonnant is certainly one to watch.

🎙️ About Sonnant

Sonnant uses AI & ML to transform audio into data for the digital era. The Sonnant platform transforms broadcast, podcast, radio and streaming audio into data. This data is delivered into industry-wide cases to power monetisation and delivery workflow automation at every stage of the audio publishing lifecycle.

In laymans - Sonnant uses data to give publishers and advertisers the opportunity to provide more accurate, timely and contextualised advertisements within their broadcasts. For instance, instead of showing a Ferrari advertisement at the start of a Joe Rogan podcast whose audience is mostly 25-30 year old males that can’t afford Ferraris and skip the start of the podcast anyway. A publisher could wait until the 15 minute mark where the most intense part of the podcast is and add a Toyota Sahara advertisement (in which Joe owns).

Moving into the future this will become even more personalised where two of us listening to the same podcast could hear different advertisements depending on who we are, how we interact and what we normally listen to.

Highlights

• Sonnant has experienced a remarkable growth rate of 90% in 2023.

• Customers include major broadcasting and podcasting companies including SCA, Nine, Nova, Salem Media Group, top podcast hosting platform Libsyn and top podcast Good Life Project.

• Combined radio and podcasting market is worth over $160b (2023) with podcast CAGR of 27.6%. US podcast advertising revenues expected to exceed $4b by 2024 with revenue outpacing the total internet ad revenue market (72% vs 35% year-on-year)

• The average ACV for Sonnant $15k and just for radio stations alone there are over 43,000. That is $6.5bn ARR in opportunity in ¼ of their market potential at the starting ACV without expansion.

Founder insights

• Background: Tony Simmons, originally a corporate lawyer specialising in M&A and IP, transitioned out of law to establish a data telecommunications company, achieving a listing on the ASX.

• Product: Employs AI, ML, and natural language processing to convert spoken word content into valuable data for advertising and industry transformation.

• UVP: Sonnant aims to unify various systems, providing customers with structured data to fully understand their content's lifecycle.

• Markets: Focuses on expanding in the US, UK, and Australian markets where Sonnant already has large Logos.

• Funding: Seeking over 1.5M USD to grow US market presence, focusing on staffing and product development.

• Financial: Aiming to hit 2m in ARR, which may significantly boost valuation and attract Series A funding in the US, with a strategy to cater to both content creators and advertisers.

Community insights

• Experts recognise Sonnant's pivotal role in ad tech, comparing its potential to the successes in display and video.

• Sonnant's innovative approach is transformative for the audio industry. The ability to deliver highly contextual advertising is a standout feature.

• The integration of AI and ML technologies is a significant competitive advantage.

• The platform’s optimisation of workflows using data is a key strength.

• Focusing on creators, Sonnant enables them with data-driven insights, highlighting its user growth potential beyond the key market segments and into individual content creators.

• The ability to diversify content and revenue streams is a major factor enhancing Sonnant's investment appeal.

Things you'd want to do before considering investing

• Product trial: Experience the functionalities and features of Sonnant's offerings firsthand.

• Understand the IP and workflow: Gain an understanding of the venture’s intellectual property, and how their processes flow and integrate.

• Further financial DD: Conduct further analysis of Sonnant's financial projections to better understand its current position and growth potential.

Access the complete Sonnant DD memo here!

Interested in more community DD? Check out some of the memos we’ve released this year on ventures across AgTech, SportsTech & Edge AI:

• Grow it Local 🌱

• Ordr 📲

• Xailient 🔍

🚀 New Companies

Check out the companies that are new to our pipeline this week:

Fenn Foods 🌱

Fenn Foods was the brainchild of Michelin star chef Alejandro Cancino, based at three hatted restaurant Urbane in Brisbane at the time of conception. Paving the way toward a healthy plant-based future for Australians since 2015, Fenn Foods has now become the first certified carbon-neutral, plant-based food producer in Australia.

🌍 Country: Aus

🎯 Type: Foodtech

🎲 The Bet: The big guys have exited the market and are awaiting the emergence of successful new players to acquire.

🌟 The Wow: Impressive journey and progress to date, an end-to-end production facility & IP, backed by solid revenue and distribution channels.

Magic Bedtime Stories 💸

Klink is a leading prize-linked crypto investment platform that serves the mass market of passive investors.

🌍 Country: US

🎯 Type: Crypto platform

🎲 The Bet: That crypto going to become a stable asset for retail investors. The venture is betting on the increasing acceptance and integration of crypto into mainstream finance, envisioning it as a reliable asset class for investors.

🌟 The Wow: For every $25 held in crypto you get a ticket into a 0-4000% uplift yield prize

📚 Weekly learning

Assessing the True Value of Startup Accelerators

Back in 2005, Y Combinator started something big, and since then, we've seen a whole bunch of accelerators pop up, each doing its own thing. But here's the deal – they're not all the same. So when you're looking at accelerators, you really have to take a moment to figure out which one's going to be the right fit for your startup.

1. Assess the Deal:

• Understand the investment terms. Compare equity percentages and valuations, like Startupbootcamp's 8% for $15,000, versus 500 Global's $150k for 6%.

• Remember, accelerators invest at lower valuations. If possible, raising directly might lead to better terms.

• Terms can sometimes be negotiated, especially if your startup is already performing well.

2. Evaluate the Experience:

• Typical accelerator models, like YC's, run for 12 weeks and involve weekly group office hours, individual meetings, and speaker sessions.

• Some, like Crypto Startup School, offer more intensive, school-like experiences.

• Consider what you want from the experience - hands-on support, specialised focus, or more independence?

3. Who Are the Mentors:

• The value of an accelerator often lies in its mentors. Look for mentors with relevant experience to your industry and business stage.

• Be cautious of programs offering sweeteners like office space or AWS credits to compensate for weaker mentorship.

Bonus: Reach out to alumni for real insights. Be aware that the accelerator may direct you to favourable reviewers!

📣 GET IN TOUCH 

🎖Calling all current and future angels

Access global, pre-vetted, VC-quality deal flow and supercharged Due Diligence: pop your name down here.

🎯Calling all pre-seed/seed Ventures

Submit your decks for a free public or private review to support your capital-raising or improvement efforts: pop your name down here.

✨ VALUE ADDS 

🗝 Experienced Investor Certificate (EIC)

Not all of us can invest in every deal type globally and that's because we don't all have $2.5m in net assets or have earned $250k/pa for the last 3 years.

Some of us however love venture and know lots about it. If that sounds like you, let me know and I can hook you up with an (EIC) form that allows you (if you pass the test) to invest in all kinds of deals (including through syndicates).

Choose the EIC link here.

Since posting opportunities for accessing some of the investment community roles through Carry, I've had a number of questions come through about how to calculate it.

Please find an example calculator here.

Often people think Venture is uber-risky or out of their depth. It's not true, anyone can do it - you just need a model to get you going. Check out the Venture portfolio model attached - and reach out if you need more context!

Grab your model here.

At the Community VC, we believe investing should be accessible to everyone, not just those in the know. We believe everyone deserves the opportunity to invest and contribute to vetted ventures that move the world forward.

Jock 

Please do not take this as Financial advice or a guide of what any outcome will be. This isn't financial advice, nothing in this email is, I am not guaranteeing or recommending an investment or outcome in anything. I am simply just listing opportunities I believe should be accessible to everyone.