According to DocSend data, investors aren’t scouring pitch decks as earnestly as they were in the past.
“For founders now, perfecting the pitch, having an efficient sales strategy, and scoping the product with urgency will create a strong foundation for success that attracts investors.”Thanks for reading and happy holidays!
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“The drier funding climate of 2023 only served to weed out the weaker businesses that had managed to secure capital in 2021,” she writes.
In the face of recent economic downturns and fears of a startup bubble-burst, it may be surprising to hear that startups are faring better than you might think.
I’ve been talking to a bunch of founders who are struggling to raise funding — and that is a real problem — but there are some startups that focus on the business fundamentals that are still thriving.
Looking at the numbers, this presents as an uptick in median runway length, a decrease in operating expenses, and an encouraging rise in profitable revenue.
This is founders focusing on being more efficient,” Healy Jones, VP of financial strategy at Kruze Consulting, told me.
It now stands at an impressive 12.5 months, significantly higher than the nine to 10 months usually expected after an average funding round.
There is no question that 2023 was a tough year for the venture and tech ecosystem.
Seed valuations have remained steady through 2022 and 2023, yet achieving the necessary traction for these rounds has become more challenging, which can create misaligned expectations for founders.
In 2020–2021, it was relatively common for $3 million to $5 million seed rounds to get done with very little, if any, traction, and they were typically getting done at $12 million to $25 million valuations, depending on the space and the founders’ background.
The bar is much higher to raise an institutional seed round, and a founder/company often needs to prove a lot more in today’s market than they used to.
This dynamic means that many founders have to first raise a pre-seed round to get to those milestones and therefore raise multiple rounds to get to a Series A.
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Founding a company during economic uncertainty and excelling takes more than just a hungry founder with a good idea.
Investors are engaging with fewer pitch decks from founders, according to DocSend data — investor activity dropped less than 2% year-over-year (YoY) from 2022 and 4% from 2021.
Just a few years ago, a founder’s market led to “zombie” companies raising money at unrealistic valuations with a “growth at all costs” mindset, proving there are pitfalls even in a highly founder-friendly market.
There will be founders who fail in 2023, but there will also be founders who succeed in ushering in the companies that define a generation.
Instilling solid building blocks for the company’s foundation is even more critical in a tighter economy and investor’s market.
Black founders in the UK are also seeing the impact of venture’s winter year.
That would put 2023 behind 2022, when such founders raised 1.02% ($316 million of $30.88 billion), and 2021, when Black founders were allocated 1.13% ($454 million out of $40.03 billion) of all venture investment in the country.
The downward trend in the share of investment allocated to Black founders most likely stems from the venture downturn of these past two years.
For example, Black founders in the U.K. raised only 0.28% of venture funds in 2019, 0.23% in 2018, and 0.38% in 2017.
Per Extend Ventures, between 2009 and 2019, only 38 Black founders were able to raise venture funding at all in the country; that number now stands at 80.
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The crypto winter may or may not thaw, but not everyone is going into the new year without hope: A majority of founders are optimistic about the opportunities for crypto startups in 2024, per a new survey shared exclusively with TechCrunch+.
The CoinFund Founder Forecast survey gathered responses from 30 of CoinFund’s web3 portfolio companies across the pre-seed, seed and Series A stages.
The survey ran from November 7 to November 17, when cryptocurrencies like bitcoin and ethereum were starting to show signs of price recovery.
While some crypto startups may be going out of business, Alex Felix, managing partner and chief investment officer at CoinFund, said these 30 companies have sufficient runway and are thinking about the new year.
According to the survey, the top areas primed for growth in the coming year include AI integrated with web3, zero-knowledge technology, decentralized finance, consumer apps, gaming, layer-2 blockchains and crypto wallets.
Entrepreneurs navigating the later stages of a startup face a minefield of funding options, and not all of them are suitable for their business.
I’ve seen too many brilliant and hard-working entrepreneurs end up with too little, so it’s critical to understand the different financing options available to you.
As the founder and CEO of Runway Growth Capital, I’ve had the pleasure of working with hundreds of startups (large and small) and witnessing the wide range of funding options available to founders.
Funding a late-stage startupThe disparity in what different forms of financing can mean has profound implications for founders, yet too little is known about them.
The disparity in what different forms of financing can mean has profound implications for founders, yet too little is known about them.
The new funds come two years after BoxGroup raised $255 million for its fifth early-stage fund and second opportunity fund.
The sixth early-stage fund is almost double the fifth one, Tisch notes.
“For our early-stage fund, we grew, which in this environment, is of note,” Tisch said.
“In fact, it’s a pretty significant growth of the early-stage fund.
Similar to previous funds, Tisch expects to inject capital from the new funds into 40 to 50 new startups, writing check sizes between $500,000 and $1 million.
