The venture capital market is slowing, which means early-stage founders are looking for a smaller pool of money.
According to Carta, the number of seed deals funded between Q4 2021 and Q1 2022 fell 41%, and dollar volume followed suit, dropping from $2.62 billion to $1.81 billion. dollars, a decrease of 31%.
In this environment, teams that successfully close a fundraiser will end up with a shorter lead than expected, which means partnering with an investor who understands the business well enough to add value is more critical than expected. it wasn’t a year ago.
Because a founder’s pitch is the first step on that journey, we interview active investors to learn more about what they’re looking for and how they prefer to be approached.
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For our latest outing, we asked each of them to name a pro forma pitch practice they think founders should retire. Notably, angel investor Marjorie Radlo-Zandi said that entrepreneurs who embellish their market size sabotage themselves.
“Don’t be tempted to exaggerate the size of your market and its endless potential,” she said. “We call grossly inflated numbers ‘hand signals.’ If you overdo it, you’ll seem less credible to investors. Not every investor expects to invest in the next unicorn.
Thank you very much to everyone who participated:
- Christine Tsai, CEO and Founding Partner, 500 Global
- Marjorie Radlo-Zandi, Angel, Launchpad Venture Group, Branch Venture Group
- Clelia Warburg Peters, Managing Partner, Era Ventures
- Anarghya Vardhana, Partner, Maveron LLC
- Frederic Huynen, Partner, and Wijnand Bekker, Partner, HPE Growth
If you already have an established network, this article is probably not for you. But if you’re a first-time founder and getting ready to fundraise, please read and share.
Thanks so much for reading, and I hope you’re having a great weekend!
Study the basics of churn to set customer and revenue benchmarks
Whether it’s a neighborhood gym or a SaaS decacorn, every business that relies on recurring revenue keeps a close eye on its churn rate.
Churn “is complex and confusing,” says Sid Jain, principal analyst at ChartMogul, but for startups it’s one of the few real-time metrics that can help founders conduct experiments. and get feedback quickly.
Jain explains the differences between customer churn and revenue churn, shares formulas for calculating referrals, and answers the question, “What’s a good monthly churn?”
Dear Sophie: Can a startup sponsor a graduate co-founder?
On Tuesday, April 26 at 2:30 p.m. PT / 5:30 p.m. ET, Sophie Alcorn will answer questions about immigration law for startups during a Twitter space hosted by Editor-in-Chief Walter Thompson.
The conversation is open to everyone, so feel free to submit your questions on Twitter and click here to receive a reminder when the chat starts.
What are the visa options for a graduate of an advanced degree from a US university who wants to co-found a startup after graduation?
Can the newly created company or other co-founders sponsor the recent graduate?
— Forward-looking Founder
Fraud-as-a-service: Scammers use encrypted messaging to reduce BNPL revenue
Consumers have enthusiastically embraced buy-it-now and pay-later services in recent years, as have online scammers.
Using secure messaging apps that serve as dark web marketplaces, cybercriminals are targeting BNPL retailers and suppliers using stolen data.
“The only way to stay ahead of these scams is for BNPL providers to ensure they have the right defense strategy in place to combat fraud on their own platforms and networks,” says Trust Architect Brittany Allen. and security at Sift.
10 details about intellectual property and commercial contracts to settle before approaching investors
A persuasive pitch is not the first step on the fundraising path.
Before approaching investors, founders should first perform due diligence on themselves to ensure they are aware of any liability involving their intellectual property.
“Waiting to resolve these issues in a financing could lead to delays, lead to time-consuming and costly remedial action and, in the worst-case scenario, lead to lower valuations,” said William Wilson, partner at Goodwin Law.
In a TC+ guest post, he identifies 10 potential pitfalls “and steps startups can take to better prepare for these issues.”
Submit your questions for a TechCrunch+ Twitter space with Immigration Lawyer Sophie Alcorn
On Tuesday, April 26 at 2:30 p.m. PT/5:30 p.m. ET, I’m hosting a Twitter space with Sophie Alcorn, a Silicon Valley-based immigration attorney and author of Dear Sophie, a column that appears on TechCrunch+ every Wednesday.
We’ll discuss issues relevant to tech workers and founders considering relocating to the United States, including H-1B visas, pathways for international founding students, what to do if you don’t ‘re not selected for the green card lottery and information for members of the Ukrainian IT community who have been affected by the ongoing Russian invasion.
This space is open to everyone, so click on it to set a reminder for the chat and submit your immigration-related questions so we can raise them during the Q&A session.
4 Questions Every CISO Should Ask About The Metaverse
The metaverse is still taking shape, but it’s already creating headaches for cybersecurity professionals.
Technology that places users in virtual, immersive environments where they can transact could unlock incalculable benefits, but it will certainly create a threat attack surface of titanic proportions. To prepare, CSO/CISO David Fairman says organizations need to be able to answer these questions:
- Can we protect PII (and other sensitive data) in the metaverse?
- How can I authenticate users?
- Can we protect users from bullying, harassment and exploitation?
- Can we handle this type of rapidly growing attack surface?