where can we get K-1 for our investment?

Expand full comment
Apr 11, 2021Liked by Eyal Toledano

Would love to see the damage you could do going all in on batch. Seeing such early traction is wild. But would also really like hearing the acquisition process. Not sure you can go wrong in any direction here. Going to be an awesome ride and I'm thrilled to have a front row seat. Great stuff as always!

Expand full comment

Thanks Daniel! It’s a really big surprise, but a welcome one of course. We’re foaming at the mouth!

The thing I’m trying to do is to keep them separate as much as I can. I obviously have limited funds, and I can’t realistically personally invest as much as I threw into the fund into Batch. The point was to park the cash, make it produce MRR and then liquidate the portfolio and go all-in once the beast awakens

But now that it has awakened, and has some serious revenue potential, a third of me wants to bootstrap pure (and grow slowly), another third wants to raise a single-ever round with friends in the ecosystem and the last third is telling me to raise with a AAA VC and aim for a big home run.

In the ideal world, the MicroAngel fund stays independent, and the MRR I get from it pays my personal expenses, enabling me to reroute 100% of what I make at Batch into Batch and resist the need to raise but that could well be short-changing as massive opportunity that I’m incredibly passionate about

Really glad to have you along for the ride :)

Expand full comment
Apr 11, 2021Liked by Eyal Toledano

Definitely awakened much earlier than anticipated. But a great problem to have lol.

Totally get the initial idea. Would be interesting to see if the MicroAngel portfolio MRR could one day justify hiring a sort of "general" (plagiarized from https://www.amazon.ca/Outsiders-Unconventional-Radically-Rational-Blueprint/dp/1422162672) on the ground to your visionary CEO role. The idea from the book that I'm thinking towards the MicroAngel fund is from the first chapter about Capital Cities Broadcasting. Essentially a 2-man team where the "visionary" was out pursuing purchasing deals and creative deal structuring (Tom Murphy), and the "general" (Dan Burke) would show up to every newly acquired company to instill the Capital Cities strategies to turn the company around or just get it generally aligned. Of course, this is just thinking out loud, but an interesting possibility nonetheless.

Expand full comment

You’re bang on. I’m both the President and the 5-star general right now, and part of the Fund I thesis is that a single individual could free themselves from the financial and time constraints preventing full time entrepreneurship, while securing good returns on the invested capital in the short-term once the entrepreneurship takes off.

Then you’d have seed capital you could double-down with

I regard Fund II, which would be say a $5m-$10m fund, as a very different model that includes a small in-house team

It would likely look something like:

- Visionary (CEO)

- General (GM, Product Manager)

- Full Stack Developers

- UI & UX Designers

- Growth Engineers

- Customer Success

Something like a <10-person, full-stack pod (similar to Spotify’s engineering culture) who can own the full cycle from Fixing to Operations to Roll-Up

Visionary would focus on the buying, decision-making and exiting

I’d say the following funds follow the same structure, with additional Generals who focus on the fund itself. For example, I’m in touch with some really smart folks who have an appetite to take the MicroAngel model public together in the future. I have no idea how that would work, but that’s their jam. And I’d very much look forward to working with those types of “generals”

Super inspiring stuff, gonna read that book :)

Expand full comment