Money doesn’t need to be shielded from sudden vibrations or direct sunlight, which is why the term “dry powder” seems like an unfortunate metaphor for the piles of money that investors poured into startups just a few months ago.
“What surprises me is that some of these companies are still in the seed stage, backed by very large firms that have tried their hand at this stage,” said Elizabeth Yin, general partner and co-founder of the seed-focused Hustle Fund. seed research.
“An extra $200,000 or $500,000 won’t have an impact on a billion dollar fund, even if things go horribly.”
Rebecca Shkutak interviewed In and Kirby Winfield, Founding General Partner of Ascend, a pre-training oriented company, about the sudden, urgent funding requests they recently received from the short runway founders.
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“I had one case on my desk yesterday where a well-known VC led the seeding of what they now call the pre-seed,” Winfield told TechCrunch.
“I know this company. I know they raised the pre-seed and now they’re coming back and saying it was the pre-seeding and now we’re raising the seed.”
As more investors are willing to wait, the traditional three-month fundraising schedule could stretch into six. Or even longer.
As a result, founders are stuck with potentially undesirable options such as lowering their grades and/or accepting fixed and downgrading rounds.
On Monday, we will launch a column with practical advice on exploring both of these scenarios. In the meantime, have a great weekend, and thank you very much for reading.
Editorial Manager, TechCrunch+
10 steps to respect layoffs
As I’ve written before, I reject most of the guest columns we receive, especially those that explain the main recommendations. However, rules are made to be broken.
This 10-point guide to managing layoffs with empathy and respect can help inexperienced managers deal with the worst part of running a startup: firing people.
“People will remember this day for the rest of their lives,” says Nolan Church, co-founder and CEO of Continuum, who previously served as director of human resources at Carta and head of human resources at DoorDash.
“They can remember it in one of two ways: Either you surprised them with bad news and treated them like cattle, or you did your best to watch over them and help them move on to the next chapter.”
Here’s how to protect your capital if you get fired
Take note, first-timers: The same people who welcomed you on board when you signed your offer letter are now looking for places to save money to keep the company afloat.
Downsizing is another way for founders to recoup capital, as many laid-off workers won’t have enough money to exercise their full rights. When these options expire, they will return to your (former) employer.
If you’re at a startup that’s extending the traditional 90-day post-layoff window, count your blessing.
If you don’t, this TC+ guest post contains helpful tips on budgeting, negotiating, and strategizing to preserve your hard-earned capital.
5 Investors Explain Why Latin America Is Ready to Survive the Crypto Winter
Even as the group of crypto companies continues their catastrophic collapse, investors backing DeFi startups in Latin America are “preparing for a recovery,” according to Anna Heim.
She interviewed five investors who have invested in crypto and DeFi companies in the region to learn more about how their ideals have changed since the start of winter and why consumer adoption is stronger in Latin America than in other markets:
- Matthias Nisenson, co-founder of DeFi Wonderland
- Christine Chang, Head of Corporate Development and Venture Business, Tribal
- Patricio Jutar, co-founder and general partner of Newtopia VC
- Claire Diaz-Ortiz, Chair, Startup Committee, VC3; scout, Kleiner Perkins
- Andy Areitio, General Partner of TheVentureCity
Dear Sophie! Questions about Green Cards and EB-2 Priority Dates
I have been on H-1B since 2011. I have an approved EB-2 I-140 with April 2015 priority date. I am Indian by origin, so I know that I will be waiting a long time for a green card.
As an experienced cybersecurity professional, I think I can apply for EB-2 NIW. Would there be any benefit in applying for an EB-2 NIW now?
— Idealist from India
Experiment to force-feed late-stage startups endless money comes to an end
It’s not your imagination: after the Flood, the rain of venture capital stopped.
According to the CB Insights report on the state of venture capital for the second quarter of 2022, global venture capital funding fell 23% quarter-on-quarter, the second-biggest drop in a decade.
Over $100 million worth of megarounds have taken a nasty hit, accounting for six out of every ten dollars invested in private market capital in the fourth quarter of 2021. In the second quarter of 2022, this figure fell to 47%.
“It’s a swoon for the ages,” writes Alex Wilhelm.
Turning Your Startup in a Bear Market: Become Undeniably Attractive to Funding
Nowadays, every founder is looking for ways to save money, but focusing on saving money instead of improving efficiency will only delay the inevitable.
According to Craig Svensrud, founder and CEO of Qualified, in July 2022, investors will not support companies that cannot demonstrate knowledge of the five core KPIs.
“We won’t be returning to the sugar peak of the past decade anytime soon, but with integrity, strong leadership and operational efficiency, we can not only survive, but thrive.”
Presentation Deck Breakdown: $65M Forethought Series C Deck
Last month, corporate reporter Ron Miller spoke with Forethought CEO Deon Nicholas about how his company used the pitch to secure a $65 million Series C round in 2022.
Forethought shared 23 analysis slides with us this week, including an eye-catching advisor/investor slide featuring Gwyneth Paltrow, Sean “Diddy” Combs, and Robert Downey Jr.
Credit: techcrunch.com /