Category: capital
April 27, 2020 Tech Crunch : Indie.vc founder Bryce Roberts: Profitability is ‘more achievable than a Series A round’
“Genuinely, it’s not rocket science,” he says. “Profitability isn’t this crazy, elusive thing. It’s literally more achievable thana Series A round. It’s way more achievable than a Series B round. If you look at the kind of fall-off between those rounds, most entrepreneurs would be better off finding their path to profitability and scale.” (read more…)
CATEGORY: capital, profitability, VC
April 9, 2020 The Information : VCs Could Exhaust ‘Dry Powder’ in a Year Unless They Slow Investing
“There’s unfortunately a fear that’s settling into the entrepreneurial community that everyone is running out of money,” said Sakoda, a longtime venture capitalist whose firm, Decibel, is backed by networking giant Cisco Systems. “There are companies that have 18 months of runway that are wondering whether they are going to make it, solely because they think there might not be another venture capitalist on the other side of this.” (read more…)
March 19, 2020 Tech Crunch : When the ‘dry powder’ disappears
With record amounts of venture capital raised, a market peak, and now a sudden plunge, the moment feels very much like it did in the spring of 2000 when the high-flying market, rife with young internet companies, abruptly nose-dived, wiping out thousands of startups — and hundreds of venture firms — over the following three years. At least some lessons were learned in the aftermath of that earlier crash. For one thing, says Rupp, in these “unprecedented times, people will show their character. You get a sense of who people are and how they think about the world, and GPs need to be really mindful of that and of how supportive they are in communicating with their portfolio companies.” (read more…)
CATEGORY: capital, resilience, VC
March 13, 2020 TIMIA Capital : Tired Investors? Revenue Finance Can Help.
Investors can often hinder the forward traction of your company. Sometimes they put unrealistic growth expectations on the team and apply pressure to take on more equity funding. Other times, they prevent you from raising much-needed growth capital because they don’t like the valuation (yet they’re reluctant to cough up more money themselves). (read more…)
CATEGORY: alternative financing, capital, debt
March 2, 2020 Bigfoot Capital : The Pros and Cons of Series A Funding vs. Revenue-Based Financing
Although attaining funds to advance your startup can be pivotal to its success, you can bet that securing financing will take more time than a simple trip to the bank. There are lots of non-traditional financing options available and not all terms are the same. Understanding which type of financing will best meet your startup’s capital needs before pursuing of any one source of funds is crucial. (read more…)
CATEGORY: alternative financing, capital, debt
March 1, 2020 Imad El Fay via Medium : Why more money leads to more problems in consumer startups
As VCs flooded the D2C space, they started throwing money at founders, granting them the valuations they asked for, however setting targets/ expectations, which almost always linked back to growth. As a result, D2C founders found themselves chasing growth at all costs, which meant spending most of their cash on Facebook and Google ads. The increased competition for marketing space on these platforms spiked CPMs, which further increased customer acquisition costs and deteriorated unit economics for these companies. (read more…)
February 13, 2020 Tech Crunch : Portfolio bloat: What’s happening to thousands of startups going nowhere fast
Ravi Viswanathan of the venture firm NewView Capital sums up what’s happening out there this way: “Firms and funds are generally coming back to market faster with bigger funds, and they’e investing a lot more, so you’re seeing portfolio bloat across the industry. But [limited partners, the outfits and people supplying money to venture funds] are investing for you to make money, and that means spending time on the needle movers.” (read more…)
CATEGORY: capital, customer acquisition, valuation, VC
January 21, 2020 TIMIA Capital : As Over-Funded Unicorns Lose Their Shine, Is Bootstrapping Finally Becoming Newsworthy?
The phenomenon of celebrating funding rounds is baffling. And it sets a poor example for new founders. We need to take the focus off the funding and place it back on enterprise value creation, revenue growth, and capital efficiency. I’m not saying that you should never take venture capital. It’s just that there’s a time and a place for it and, for the most part, early-stage founders are hugely disadvantaged by it. For early-stage founders, it’s in the best interest of the venture capitalist if you rapidly fail. Compounding returns make time your enemy—when you fail to meet the unrealistic growth targets, the VC will cash out and move on to the next shiny object. In this scenario, the founder is left with nothing and all the enterprise value creation (or potential for value creation) is destroyed. (read more…)
CATEGORY: alternative financing, capital, debt, profitability
November 20, 2019 Runway Growth Capital : These are the Companies Most at Risk if Venture Funding Dries Up
Companies with soft, monetizable assets such as intellectual property in the form of patents, software code and contracts that are interested in securing debt growth funding should move quickly because most commercial banks do not find their collateral as attractive as that of brick-and-mortar businesses. And, frankly, they simply do not have the wherewithal to understand these forms of collateral and the confidence to stand by these companies when the economy is turbulent. (read more…)
August 8, 2019 Tom Tunguz : Which Categories of Seed Startups are Thriving? Which Aren’t?
Overall, the data is consistent with our observations on the ground. Many sectors have fallen out of favor, and others have risen suddenly. A contrarian might found a company in a deflating category; a counter-argument might be to ride the next big wave and start there. Whichever your perspective, the main conclusion is that there’s an incredible amount of opportunity. (read more…)