Everything you need to get right to get to $100m ARR

• Market/product Fit - product /audience/connection - is your product a painkiller or a vitamin ?
• Product /channel fit -product aligns with channel behaviour - acquire, convert and retain 
• Channel/model fit - model is profitable , sustainable and scalable 
• Model/market fit - model aligns with the market behaviour , predictable, scalable and market acceptance 

#Referron - a case study of note 

Venture Capitalists invest in leading indicators - not lagging indicators!!!

Another great Insite by Michael Ho!

Companies pre revenue raises

Canva $6.6m

Kinde $ 12m 

Why did they invest?

What were they looking for?

They're looking for FUTURE revenue growth 

→ once Canva started making money

→ they went from $0 to $105M in 4 years 🤯

Raising money from VC  is about them believing in your (future) ability to hit Venture Scale

What are the indicators?

• (historical) traction ?
• the team
• some crazy breakthrough
• What else? 

Why do Many startups fail to get more funding 

Many startups raised - focusing on getting to the next milestone - hit the metrics 

→ Growing 2-3x yoy = successful raise

→ getting to $3M ARR = Series A

And was not enough for a series B…. Why?????

Here is the thing!!?

Revenue is a high level lagging indicator and VCs are looking for the leading indicators to future growth instead

What are the leading indicators to get you from $3-100m 

How do you 

→ grow at 10% mom for 24 months straight

→ and 6% mom for the next 3 years 🚀

Some leading indicators

• ICP - your ideal customer profile being nailed - and a model to get to them
• The team and stakeholders
• Have they done it before 
• Repeat purchases 
• Virality
• Energy
• growth tactic and stage 
• gut & intuition on the VCs side - 

So - when VCs say  “you need more traction”It’s bullshit

The Gem

Dig deeper and figure out what leading indicators you need to de-risk

And use that as your roadmap 💪

Article from Michael Ho 

https://www.linkedin.com/posts/themichaelho_canva-raised-a-66m-seed-a-15m-series-activity-7274788934562324480-JAu9?utm_source=share&utm_medium=member_ios

Only 1pc of startups get to 100m arr - doesn’t mean that your start up is still successful !

A great piece by Michael Ho

1% of VC backed startups will make it past $100M ARR

But does that make the other 99% a failure?

Let’s dig in to the numbers…

I was fortunate to have Chris Tottman introduce me to Stephen Millard who analyzed 117K startups founded between 2005 and 2022

→ Of those 117K startups founded

→ 31% (37K) were VC backed

→ 12% (13K) raised $3M+

Of those 13K startups, 1.8% (243) either made it past $100M ARR and/or achieved a $1B+ exit

→ 0.5% (71) had a $1B+ exit without reaching $100M ARR

→ 1.2% (168) made it past $100M ARR

→ 109 of the 168 did it <10 years

I was excited to talk to Stephen because he shares my deep belief…

💡 Every company is a snowflake, but we should be able to identify the key operating markers of (capital efficient) venture scale growth to give startups a better roadmap and increase the probability of success

Okay...

Let’s talk about the two elephants in the room

🐘 Why do VCs care about $100M if only 1% make it there?

🐘 Does that make the other 99% a failure?

--------

🐘 Why do VCs care about $1M to $100M in 7 to 10 years?

Because venture capital is a power law game

They understand that a VERY small % of companies will make it to $100M and they’re job is to figure out which ones have a better chance of getting there

So that’s the lens they look through

Now…

Because there’s a lot of future risk with every startup, betting on anything less than a *potential* to reach $100M would put a glass ceiling on their fund that goes against their power law objectives

Series A is the inflection point of the venture scale curve and where VCs are trying to build conviction on a startups *potential* to reach $100M

--------

🐘 But does that make the other 99% a failure?

Absolutely not ❌

I like how Stephen phrased it: many companies have great outcomes at smaller revenues, especially if they have not raised too much capital and / or strike a balance between growth and profitability

And this has become my life’s work…

→ I don’t believe venture is a $100M or bust binary game

But we need clearer milestones to truly understand where we are in the journey that we can check ourselves against every month/quarter/year so we can continually make better informed decision on a go-forward basis

The chances of becoming a pro athlete is <1% in any given field

But that doesn’t mean we tell kids not to dream of the big leagues?

Of course not...

But it does mean we need to help them re-evaluate their chances of making it every month/quarter/year

--------

Okay, so where can you start?

Focus on unlocking milestones and keep your cap table as light as possible until you're ready for step 3️⃣

1️⃣ Problem Solution Fit

2️⃣ Go to Market Fit - unlocks Series A

3️⃣ Scale PMF #1 - Series A use of funds

4️⃣ Scale PMF #2

--

♻️ Repost to help a founder in your network

Click 'visit my website' at the top of this post to register for my Seed to Series A session

Michael Ho

Mesoblast gets FDA approval and shares are rocketing

What a great story of persistence, resilience , belief and success 

I look forward to follow this continuing narrative of yet another  Australian innovation!!

Mesoblast (ASX:MSB) has received approval from the US Food and Drug Administration (FDA) for Ryoncil (remestemcel-L), making it the first mesenchymal stromal cell (MSC) therapy to be approved in the United States for any indication.

Ryoncil is the only FDA-approved therapy for treating steroid-refractory acute graft-versus-host disease (SR-aGvHD) in children.

Peter Marks, director of the FDA’s Centre for Biologics Evaluation and Research, said the approval was a milestone in the use of innovative cell-based therapies to treat life-threatening diseases.

The disease

"Allogeneic stem cell transplant" involves a patient receiving stem cells from a donor. The procedure is used to treat blood cancers (like leukaemia), inherited blood disorders (like sickle cell disease), and immune system deficiencies.

However, such transplants carry a risk of graft-versus-host disease (GvHD), where the donor's immune cells attack the patient’s body. First-line treatment for GvHD is corticosteroids, which suppress the immune system.

Steroid-refractory (SR) GvHD occurs when a patient's GvHD does not improve, or in fact worsens, after three to seven days of high-dose corticosteroids.

Once GvHD becomes steroid-refractory, the condition becomes much harder to treat, and patients face a higher risk of death.

Enter Ryoncil

Ryoncil is a therapy using cells from bone marrow (mesenchymal stromal cells). It's typically administered via intravenous infusion. The MSCs modulate the immune system, inhibiting the activation of T-cells, a type of white blood cell that attacks infected and foreign cells. They also reduce the release of cytokines, which are small proteins that control inflammation.

This mechanism allows Ryoncil to target conditions linked to excessive immune responses, such as aGVHD.

Significant clinical results

The FDA’s approval follows a Phase 3 trial of paediatric patients with SR-aGvHD, of which 89% had severe Grade C or Grade D disease. The trial showed that 70% of patients achieved an overall response by Day 28 of treatment with Ryoncil, a rate that's predictive of survival in cases of aGVHD.

More than 85% of patients completed the full course of Ryoncil treatment without interruption, with no discontinuations due to laboratory abnormalities.

Transplant physician Dr Joanne Kurtzberg, Director of the Marcus Center for Cellular Cures at Duke University Medical Center, commented: “Steroid-refractory acute graft-versus-host disease is a devastating condition with an extremely poor prognosis. From today, we are able to offer Ryoncil, the first FDA-approved treatment which will be life-saving for so many children and will have a great impact on their families."

Commercial significance

The global graft-versus-host disease market has been valued at around US$3bn in 2024 and is projected to reach around US$10bn by 2031.

Chief Executive Dr Silviu Itescu commented: 

“With Ryoncil’s approval by the FDA, Mesoblast has demonstrated the ability to bring the first MSC product to market. We will continue to work closely with the FDA to obtain approval of our other late-stage products, including REVASCOR for cardiovascular diseases and rexlemestrocel-L for inflammatory pain indications.”

With approval secured, Ryoncil will be made available at US transplant centres and other treating hospitals.

Mesoblast also aims to expand Ryoncil’s use to address the adult GvHD market.

Shares in Mesoblast closed 54.04% higher at $3.05 yesterday.