☕️ Afore Capital is Earlier Than You

+New Tech Breakfast Club Events

Author

Morgan Barrett
November 27, 2024

👋 Hi, Breakfast Club Members!

Thank you to our friends at Alma for sponsoring today’s edition. Trying to figure out immigration? Talk to Alma

Scroll down for signups for upcoming Tech Breakfast Clubs. I also caught up with Jack McClelland from Afore about the state of pre-seed and Afore’s founders-in-residence program. TLDR: Afore is crushing it. But there’s a lot of hidden alpha in the interview so you should still read it.

What else is new? It’s a quiet week (except for my DTC friends). The stock market hit all time highs. A founder was inspired by my dumb tweet to start a company (for real). I saw Wicked.

Resources:
-Clerky offers a $100 discount for TBC Members on their formation packet. Reply to the newsletter and I’ll send you an invite
-Fixing the YC SAFE: Reply to the newsletter and I’ll send you a redline for the YC Postmoney SAFE that can save founders millions in dilution
-Ramp is offering a $500 bonus to TBC members when they start using Ramp.
- HubSpot’s 50% off deal for startup CRM ends November 30th. Sign up here for auto approval. Questions? Reach out to Cristine at [email protected]

Tech Breakfast Club Events

SF Tech Breakfast Club Dec 5th
Closing out the year with Jack McClelland (Afore) in SF. Jack just sourced a deal from Tech Breakfast Club - come join and 10x your deal flow.

El Segundo Tech Breakfast Club Jan 9th
Kicking the year off with in the most important 5 square miles in America

Austin Tech Breakfast Club Jan 16th
Hopefully my cholesterol is under control by January - planning on eating a ton of tacos and brisket

NYC Tech Breakfast Club Jan 22nd
Cohosting with Ben Braverman (Saga Ventures). If you’re embarking on a worthy quest - come join!

Fintech Tech Breakfast Club (NYC) Feb 5th
Cohosting with Parker Odrich (Communitas Capital) and Topher Price (MS&AD). Come join if you’re building or investing in Fintech

Bonus: Laurent Span, one of TBC’s favorite VC’s, is throwing a holiday gala on December 6th in NYC. Grab your tux and grab a ticket: https://posh.vip/e/the-gala-3

Tech Breakfast Club 🤝 Alma

Aizada, you’re a lawyer, you went to Harvard, why leave traditional big law life to start an immigration company?
I had an immigration problem of my own, actually. I got bad legal advice which left me unable to work for 1.5 years and I also couldn’t travel. At Alma, we’re bringing high-quality legal services to the immigration space and making the experience way better.

Who is alma for?
We work with both highly skilled individuals and companies with immigration needs. We offer both non-immigrant (O1, H1B, TN, L-1, E-2) and immigrant visas (EB1 and EB2-NIW) to individuals and enterprises.

Why use Alma?
We’re hyper-focused on the quality of the experience, we have the fastest document turnaround times in the market and highest approval rates. We also genuinely empathize with our clients because we’ve been through this process ourselves.

If you or your employees need any immigration help, submit your profile at Alma’s website and get a free consultation to assess your background: www.tryalma.ai/assessment

💰️ Featured Job (brought to you by Twill)

If you know someone for this role, sign up for Twill here! They'll email you a link to submit your referral. If your referral lands the job, you’ll get a $5k-25k referral bonus. 

Open Role:
Upfront, Data Engineer
Remote, US preferred
Comp: $125K-$175K + equity
Benefits: medical/dental coverage, unlimited PTO

Referral Bonus for Twill Members:
$5k

About the Role:
Upfront is fixing the childcare industry through accurate, complete data so the government, parents, and providers can all make decisions and operate with optimal results. Their SaaS platform cleans, validates, and provides vital insights on childcare data (price, hours, location, availability, etc.) and serves as a central hub for every stakeholder. 

Upfront is looking for a part-time data engineer to architect a system to ingest data from their clients, clean and enrich that data, and integrate it into their production system. For the right candidate, they’re open to expanding the role full-time.

Basic Requirements to Submit a Candidate
Data engineering experience
The ability to architect a data ingestion platform from the ground up
Extensive experience with at least one platform for scheduled ETL pipelines (e.g. Airflow or AWS Glue)
Extensive experience in dbt, AWS and Snowflake
Intermediate to advanced proficiency in Python

Calibration Tips:
Who has built 0-1 in startups and thrives as the sole domain expert in the company?
Who is proactive, can build for scale and collaborative with cross-functional partners?

Jack McClelland (Afore Capital)
It’s getting earlier.

Pre seed has stayed hot, the rest of the market not so much – is it a good time to be an early investor?
Well, when Afore started back in 2016, pre-seed was 10% of seed rounds. Now it’s 60%. It was a risky bet. I think Paul Graham was publicly tweeting that pre-seed will never be a category. We’d have accelerators. And then Seed. 

Yeah, I bet Paul Graham wished that pre-seed investors didn’t exist. Would be good for YC. 
Well, so it wasn’t a sure thing by any means when Anamitra and Gaurav (Afore’s founding partners) planted their flag. Now it’s getting a lot more attention, especially with things moving faster.

What do you mean?
Pre-seed, I think, is even more attractive now with AI. For our portfolio companies, on average non-AI companies took around 2 years to reach $1mm in ARR. AI startups are taking half that, with lower burn rates. It’s also easier than ever to start a company now with AI tools like code copilots. 

Plus raising a pre-seed in some ways puts less pressure on the founders, especially when you’re pre product market fit. If you raise a ton of money, the treadmill starts, and you have to hit certain milestones or you’re dead. 

Afore has found ways to double down on pre seed. You’ve gone even earlier
When we started we were writing core checks but have now added a founders-in-residence program. We’ve done five cohorts in the last 18 months or so. 

There’s a large market of founders looking for a cofounder or validating ideas at the earliest stage of their journey. Previously we didn’t have an offer for them. Now we have the founders-in-residence program.

What is Afore offering?
A lot but what’s resonated the most is very specific, targeted, coaching. There’s so much high level advice about GTM, but we’ll get into the details – we’ll look at your sales call transcript and break it down bit by bit. Looking at what was good and what might have lost the buyer. We have really strong technical founders but go-to-market is something everyone needs to learn.  

How are you sourcing teams for the founder in residence program?
I wish I knew what the main channel was so I could just double down on that. It’s been from all over. We look at everything. Warm intro, cold inbounds, and we even do a bunch of outbounds. We get a lot of recommendations from our founders and residents. 

Maybe that’s where the alpha is?
You have to be open. We have the fewest requirements of any program like this. You don’t have to check a certain set of boxes. That being said, we like people who learn and move quickly. And you should have a unique insight. The more concrete the insight, the better. 

What companies stand out?
Podqi is one that has found traction quickly. It actually came through a tech breakfast club contact?

Who? 
Laura Hamilton 

No way –
Yeah it was a little early for her fund but she’s an expert on dev tools. Mainly series A, some seed, but Podqi was just getting started. They actually wanted to do something for podcast management but pivoted to dev tools. They ended up building an AI powered IP protection tool. They learned the market so quickly. We caught them right when they were pivoting. I don’t think any other VC would have backed them then but they were perfect for the founders-in-residence program because it was a super strong team. And now, fast forward a little, they just raised their seed from General Catalyst. 

They exemplify the “learning machines” archetype. When they started looking at IP protection for creators they had to learn quickly how to talk with entertainment lawyers or artist management teams. After two months it felt like they were industry veterans. 

What are the economics of the founder-in-residence deal?
We have no standard terms. That’s different from like a typical accelerator. It’s the most flexible pre-seed program. It’s usually a couple hundred k and we’re flexible on valuation.

But you have to spend two months in San Francisco. Afterwards you can go anywhere you want. It’s around 10 teams and we do this a couple times a year. 

But you’re still writing bigger checks as well
Yeah we’ll write 10 bigger checks a year, like up to $2mm, for our core checks. 

Anything else worth sharing?
I just got promoted to principal! 

Let’s go! Well deserved! 
And we just had our Afore pre seed summit

What were some of the highlights?
It's been a good year. I think portfolio companies have raised like $300mm+ across the portfolio this year alone. More than last year. From Benchmark, Accel, and Lightspeed plus some other fantastic follow-on investors. The cofounders of Okta, Instacart, and Box all spoke at the event. Three very different companies, so you got a good mix of perspectives.  

Anything else to announce?
No, not yet... soon though! 

About Morgan Barrett:
Morgan is the creator of Tech Breakfast Club. He hosts breakfast meetups in NYC, LA, SF, (and occasionally Austin, Miami, Boston) that bring together the best founders and investors.

Morgan is also a Startup Lawyer at Optimal, an elite lean boutique startup law firm repping clients funded by a16z, Sequoia, Kleiner, Accel, and countless other VCs. He works with clients from formation to exit, in collaboration with Optimal’s partners.