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Deal terms look like darts these days – TechCrunch


Welcome to Startups Weekly, a fresh, human take on this week’s startup news and trends. To receive this in your inbox, subscribe here.

When Andreessen Horowitz unveiled his new early-stage startup accelerator, which has been in the works for over a year, my eyes sought out two things: checking the size and the ownership target. I care about value-added services and micro goals, like a goal to support various founders or a web 2.5 track, but first I care about how new programs, such as A16z START, advertise of their money.

The reason? An accelerator’s standard deal says a lot about the founders it plans to attract. Some programs may brag about the amount of their check, others may emphasize the non-dilutive nature of their money, and a select few claim that equity in exchange for access is an outdated way of working.

In this case, a16z will decide the terms of the deal on a case-by-case basis for Founders who make it to the final round of the interview process. The maximum a founder can get is $1 million in seed funding. The vagueness and general direction appears to piggyback on Sequoia’s recently announced program, which will invest a $1 million check in founders for an undisclosed stake. While I’m in favor of more money for early-stage founders, I’m also in favor of telling myself how much equity I’m going to give up before committing time to the nurturing process. So, I thought the blur was a little weird. Not bad, necessarily, but weird!

Of course, Twitter technology had some thoughts! One of my followers said the leeway was helpful, especially for a company like A16z for whom this was their first formal foray into supporting startups ASAP. I don’t disagree with that, like traditional demo days, which assume every startup in a batch is ready to fundraise on the same day; a standard deal assumes that every startup’s monetary needs are created the same, regardless of solution, origin, or industry.

Another said the agreements were silent, so other accelerators couldn’t copy their terms. A lot of people thought they were going after Y Combinator because why leave all the benefits to one institution looking for index funds. One day, startups may ask themselves: Y9r or a16z?

For more thoughts, read my TechCrunch+ article: Why does A16z need its own Y Combinator? You can also listen to the latest Equity podcast, which covers this topic and more.

In this newsletter, we’ll talk about Opendoor alumni, a post-layoff kingpin, and the JOKR interview. As always, you can support me by forwarding this newsletter to a friend, follow me on twitter or by subscribing to my personal blog.

When a door opens

Our offer of the week is Kindred! Mary Ann Azevedo reported this week that Opendoor alumni Justine Palefsky and Tasneem Amina founded Kindred, a startup that wants to make travel more accessible through home swapping. So far, the duo have raised $7.75 million to help make the option available to more people.

Here’s why it’s important: Opendoor’s alumni network is certainly on the move, with Kindred being the latest entrepreneurial haunt to emerge from a residential real estate company. This upstart particularly stands out because of its focus on accessibility, which the proptech industry could always use more of.

Read this excerpt from CEO Justine Palefsky, in which she describes the startup’s “aha moment”:

“We started Kindred after battling the problem ourselves. We were both working remotely and wanted to take advantage of this flexibility to travel more and work from elsewhere. But none of the existing solutions or ways to do it really made sense for us and for our lives,” Palefsky said. “We felt like we had three options. First, we could find an Airbnb somewhere, which became too expensive for trips of more than a few nights. Or you could abandon your home and become a nomad. Or you can run your home like a hotel and put it on Airbnb to fund your trip. None of these options suited us, as they are inconvenient and a bit scary. »

Honorable mentions:

Picture credits: Kritsada Seekham / Eye Em (Opens in a new window) /Getty Pictures

Flockjay lands on something new

Months after halving its staff, edtech startup Flockjay has adopted a new vision for how to disrupt tech sales: start from the inside out. CEO Shaan Hathiramani opened up about pivot, cuts, and what he learned when he tried to create a bootcamp and finally landed on a SaaS tool.

Here’s why it’s important: The company recently raised $11 million in Series A venture funding in January 2021, according to data from Crunchbase. Hathiramani said the pace of growth made it look like Flockjay was “managing about six or seven businesses at a time”. He went on to say that the team ran an admissions and screening company, a training company, a coaching and placement company and an alumni community, which caused the burnout of the team of less than 100 people.

More problematic, perhaps, was the fact that Flockjay didn’t “grow as fast as you wanted too”. So he turned to his board and decided to scale back the lineup until they found a more sustainable business – announced today.

The whole series:

Conceptual illustration of a bird shooting at a worm-like graphic illustrating wrestling.

Picture credits: Fanatic Studio/Gary Waters/SCIENCE PHOTO LIBRARY (Opens in a new window) /Getty Pictures

JOKR’s new take on grocery delivery

Our own room Christine sat down with Ralf Wenzel, Founder and CEO of JOKR, to talk about the grocery delivery wars and his company’s differentiated model. Despite growing pains, the company raised $260 million in December to become a billion-dollar company. So how did he convince people that something as unprofitable and difficult to scale as grocery delivery is worth more investment money?

Here’s why it’s important: In the interview, Wenzel talks about building a “more fresh produce oriented proposition” like fruits, vegetables and cuts of meat. The CEO says that by not focusing solely on convenience store products, the company has achieved “fully positive gross profit at group level for our local businesses in all our countries after 12 months of operation”.

To me, this indicates that customers’ habits have matured so much that they want more than the convenience of delivery services. Instead of a last-minute crutch, people want help with their day-to-day needs, which means startups can differentiate themselves if they think of genuine services before everyone else.

Now I’m hungry:

Ralf Wenzel, JOKR, delivery man

Picture credits: JOKR / Founder and CEO of JOKR Ralf Wenzel

All week long

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‘Decentralized’ web3 startups are finding out the hard way that there is no safety net

Coinbase CEO Says Apple’s Crypto Rules Highlight “Potential Antitrust Issues”

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Plaid co-founder’s next venture is a bank to power fintech apps

Web scraping is legal, reaffirms US Court of Appeals

Seen on TechCrunch+

How to pitch me: 6 investors discuss what they’re looking for in April 2022

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Until next time,

NOT



Tech

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