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🗣 The Bulletin #13: Ukraine Resources, Demystifying VC, and Curriculum Snapshot #2
Welcome back to the Bulletin, featuring everything Van Wickle Ventures is reading, listening to, thinking about, and more in the world of VC.
Before we get into venture content today, we wanted to take this opportunity to share some vital resources given conflict ensuing in the world:
Ukraine Crypto Wallets
If you’re looking for a way to donate crypto, the Ukrainian government solicited donations in ETH and BTC on Twitter:
Comprehensive Notion Doc
This Notion doc has a long list of ways to help, financial and otherwise. It’s the most comprehensive I’ve found around.
This week, you will find our second curriculum snapshot where we have our analysts in training dive into datarooms.
What We're Consuming:
Here’s a quick rundown on how Russia’s invasion of Ukraine has influenced money & companies, as of March 2, 2022.
U.S. crude oil prices surged 11% with concerns over Russia’s supplies. This prompted an agreement with the International Energy Agency to release 60 million barrels of oil from global reserves.
Apple product sales were halted in Russia, pulling apps like Russia Today (RT) and Sputnik news outlets, and began limited Apply Pay service.
Youtube, TikTok, and Meta blocked RT in Europe. Meta and Google are no longer allowing for RT to monetize on the platforms.
Crypto surges due to Russia’s economic sanctions and Ukranians fleeing the country, putting their savings into crypto instead. As of Tuesday, 5:35am ET, bitcoin jumped 13% to $43,163, Ethereum increased 10% to $2,878, and Dogecoin rose 6% to 13 cents apiece.
Ukraine received nearly $33 million worth of cryptocurrency from donations, having begun accepting cryptocurrency donations as of February 26.
Russia’s currency, the ruble, plunged to record low– losing about a third of its value.
And now, a very random fact: Ukraine is known as the “breadbasket of Europe” due to their large supply of wheat and are the top producers of sunflower seeds globally. Sunflowers were planted following the Chernobyl disaster to absorb radioactive materials in local ponds.
Lastly, check out this NYT article:
Volodymyr Zelensky, the President of Ukraine, has managed to rally the world behind him and his country. By opting to stay in Ukraine instead of fleeing; by appearing dressed in faded t-shirts; by doing everything he possibly can to help his people (he even successfully asked Elon Musk to bring Starlink internet to Ukraine); by being an unrelenting force of good in this trying time of unneeded aggression, Zelenksy brings hope to the citizens of the world.
Check out A16z podcast on Demystifying VC!
People to Follow
Meagan Loyst (@meaganloyst): Founder of GenZ VC, investing at Lerer Hippeau
Check out John Gannon's Blog for keeping up with VC and for recent VC jobs.
Van Wickle Ventures Updates
Curriculum Snapshot #2: Datarooms
Welcome back to another part of our Curriculum Snapshot series, where we give you a quick rundown of what our Analysts-In-Training are currently learning in curriculum meetings!
This Monday was a content-heavy session: our Analysts-in-Training learned about important performance metrics, financial modeling, and the basics of financial accounting. To apply these skills into practice, we used 305 Fitness (VWV’s very first portfolio company!) as a case study: evaluating 305 Fitness’s overall performance, critically considering areas of strengths and improvement, and creating future projections using quantitative analysis.
Today, we will only be looking at: Performance Metrics
Our Analysts-in-Training were introduced to a comprehensive list of the performance metrics through Zachariah Reitano’s article DTC Metrics, Explained. Here are some important metrics that we learned how to calculate and interpret:
Customer Acquisition Cost (CAC): the amount of money that it costs you to acquire one new customer.
This includes: advertising. PR, base pay for salespeople and sales manager salaries, etc.
We can calculate CAC by dividing total sales and marketing costs by the number of new customers acquired over a given period. Needless to say, the lower your CAC, the better.
Lifetime Value (LTV): the amount of money generated in the entire relationship of one customer.
It’s hard to know in the beginning of a business but over time, with more data accumulated, LTV predictions will be easier.
Payback Period: time it takes for a cohort to pay back the cumulative amount of money it took to acquire them.
Essentially, how many years (or months) does it take for the cohort to offset the CAC of the cohort?
LTV/CAC ratio: LTV divided by CAC. The number of times a customer pays their acquisition cost. More importantly, it tells you how efficiently you’re able to acquire customers.
For example: it cost $100 to acquire a customer (CAC) and they spent $100 their whole lifetime with the company (LTV). The ratio is 1 and no profit was generated.
For example: it costs $100 to acquire a customer and they spend $300 their whole lifetime with the company. The ratio is 3 and you paid $100 to acquire them 3 times over.
Note: Make sure to attach a period of time to the ratio! (2 Year, 3 Year LTV, etc)
What’s a good LTV/CAC ratio?
According to Reteino, ideally:
1 Year LTV/CAC = 1
2 Year LTV/CAC = 2
3 Year LTV/CAC = 3
However, this also depends on industry dynamics, capital markets, and the product itself. Reteino gives a great example where a company may choose a 3 Year LTV/CAC of 1 because customers have a high LTV, where the product is “sticky,” and the company is willing to have customers take 3 years to pay them back. They believe that customers will “eventually pay for themselves many times over.”
Note: this requires high confidence in the customer’s LTV because 3 years is an incredibly long time to be paid back!
That wraps up our second Curriculum Snapshot! We’re always looking to engage and would love to hear your thoughts.
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Thanks for tuning in<3 See y’all next time
-van wickle v