All of a sudden half of 2023 is behind us, and while the market environment is still uncertain, many of our CEOs and management teams have already started thinking about 2024 plans and beyond. On the one hand, it’s clear corporate budgets and spending are under some pressure, with 25-30% longer sales cycles and 10-15% renewal declines in the last two-three quarters. On the other hand, the best companies are able to drive growth since their breakthrough products deliver 5-10x value back to customers. Looking forward, have a balanced approach to growth versus expenses to ensure runway of 15-18 months or more, but know that the technology adoption curve is still early on and it will provide plenty of opportunities for many companies to build the next generation of market leaders – make sure the value proposition of your products is up to the challenge. Have a great summer everyone!
All the best,
The 3TS Team
3TS KEY LEARNINGS
Early in June we hosted our annual 3TS’ Positive Impact Event, which brought together investors, portfolio executives, co-investors, investment bankers and service providers. Our goal was to have everyone come away with at least Three Key Learnings, new best-practices, and a series of new connections across the 3TS network. We were proud to partner with the 0100 Conference, which had a concurrent event. Below are a several key take-aways from some of the sessions.
- Driving Successful Exits is a process, and it’s never too early to start, stated Victor Basta, CEO of DAI Magister, a boutique tech investment bank. Most importantly, in the most successful exits, companies are brought not sold. The cycle needs to start 24 months or longer in advance. Building relationships and partnerships with potential buyers are key, in order to position the company to solve clear problems, which in turn drive exits. New-normal for valuations is settling in at 5-7x revenues range, down from 2022 peak, but 35-45% higher than in 2018.
- How Legal and ESG Prep Streamlines Exiting Process. 90% of CEOs and private equity firms expect increase in ESG scrutiny, from the largest to the smallest companies, highlighted Alex Rakosi, Partner at CMS. High-quality ESG compliance leads to better valuations, because of reduced risks. Key areas to prepare ahead of the exit process: data privacy, supply chain of products/solutions, social & employment matters.
- How Marketing Communications & PR Drive Company Growth and Exit Valuations. Tell your story or someone else will – don’t underestimate how important powerful positioning, communicated into the market is to growing and ultimately exiting, underscored Tilo Bonow, Founder & CEO of Piabo, a top tier marketing communications firm. Start with “Why you’ve built your products” and “Who will your products help”; it’s not about the product features and functions. Make corporate communications a consistent, long-term part of your marketing in order to drive sales and ultimately an exit. Don’t hesitate to get a professional to help.
3TS PORTFOLIO & NETWORK NEWS
ShiftMed CEO, Todd Walrath wins E&Y Entrepreneur of the Year Award
Built in Romania, Shiftmed (aka Homecare) has scaled up into one of the largest healthcare workforce management marketplaces in the US. Congratulations to founder and CEO Todd Walrath for winning E&Y Entrepreneur of the Year Award – Washington DC, an impressive and well-deserved award! Onward and upward.
On the heels of raising a new €14m round of funding, Safesize, the leading footwear recommendation platform, ramped up its sales team with a series of strong, proven executives that bring long-standing experience in the retail space. With an exponential growth opportunity to roll-out across 20,000 stores in the current client base, it’s not a moment too soon that these new team members joined Safesize. Good luck to all!
Medicover represents a significant win for PerfectGym and we are excited for the team. The Medicover portfolio includes well-known brands including Well Fitness, McFIT, Holmes Place, Platinium Fitness and Smart Gym. PerfectGym will start by implementing 90 locations immediately.
One of the key initiatives after Autenti, a next generation Secure Signature and Documents Workflow platform, closed its new €8.5m round led by 3TS, was to build its sales team. The Company is very lucky to attract and add Barry Jungels as its new head of sales. It’s a testament to the strengths of Autenti’s platform and potential in the future that such an experienced exec joined their journey.
GOOD READS & GREAT IDEAS
From the author of Contagious: Why Things Catch On, which is one of the best marketing strategy books around, comes a new set of ideas and best-practices on how to change minds. Marketing is hard, sales is hard. This book can help. It identifies the key barriers to change and how to mitigate them. Then you’ll learn how to change minds in the toughest of situations.
This list caught our attention. We hear and guide against these types of unforced errors at the Board level, after a missed quarter or a year below budget. In this more challenging environment it’s even more important to avoid the basic mistakes and make sure you’re implementing the recommendation listed.
Traits of a High Performing CMO, by Dave Kellogg on Exit Five Podcast
Conventional wisdom among investors is that finding the right CMO is actually the hardest executive role to fill. Dave Kellogg, a proven CMO turned CEO, does a great job outlining best-practices on what it means for the CMO to be a great partner to sales, why it’s marketing’s job is to make sales easier, how to also be a partner to the CEO, the importance of being metrics and benchmarks based, best ideas for category creation, and the important differences between lead gen vs demand gen.
JOIN US AT THESE EVENTS
IPEM Paris 2023 – 19 – 20 August 2023 – Paris, France
Brain Bar – 21 – 22 September 2023 – Online, Hungary
Ugly Duck EIF – 26 September 2023 – Luxembourg
0100 Conference Mediterranean 2023 – 18 – 20 September 2023, Rome, Italy