Fundraising is a highly specialized skill: unless you’ve started a business, worked in a non-profit, or perhaps defrauded someone, you won’t have much practical experience when it comes to convincing strangers to give you their money.
But startup-land is different: before a founding team can breathe life into their great idea, someone must first show investors exactly how that idea solves an existing problem and generates enough revenue that it’s worth the risk and paperwork.
Performing due diligence is critical, but it won’t give you all the information you need to approach a VC. For some, a LinkedIn DM may be an appropriate way to get their attention, but others may filter notes from unknown senders into their spam folder. Likewise, one investor may ask to review your deck in detail; another may prefer a probing one-on-one conversation.
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Poring over publicly-available information will not indicate exactly which kinds of deals they’re looking for at the moment. As markets shift, so will their focus — but there’s no way to know that after reading about a round they led last year.
To dispel some of these mysteries and learn more about where top VCs are searching for opportunities, I asked the following investors to share their thoughts:
- Christine Choi, partner, M13
- Arvind Gupta, partner, Mayfield Fund
- Mike Ghaffary, general partner, Canvas Ventures
- Sarah Kunst, managing director, Cleo Capital
Responses were varied, but I thought it was particularly notable that warm introductions aren’t necessarily more popular than cold emails. I’ll be talking to more venture capitalists and angel investors in the coming weeks, so watch this space.
Thanks very much for reading TC+!
Walter Thompson
Senior Editor, TC+
@yourprotagonist
6 technologists discuss how no-code tools are changing software development
Image Credits: Luca Lorenzelli/EyeEm (opens in a new window) / Getty Images
We’ve reported on the rise of no-code/low-code software for years, but since the pandemic began, they’ve taken on new importance.
Rapid digital transitions are taking place in an era where employees have become adept at working remotely and software developers are in higher demand than ever.
We interviewed six technologists to learn more about the impacts of no-code/low-code tools, minimizing technical debt and related topics:
- Patrick Jean, CTO, OutSystems
- Deb Gildersleeve, CIO, Quickbase
- Zoe Clelland, vice president of product and experience, Nintex
- Bruno Vieira Costa, founder and CEO, Abstra
- David Hsu, founder and CEO, Retool
- Trisha Kothari, co-founder and CEO, Unit21
IRS FUD: What you need to know about crypto taxes
Image Credits: MicroPixieStock (opens in a new window) / Getty Images
Regardless of whether you’ve liquidated your crypto assets or plan to hodl until the heat death of the universe, if you made any profits last year while trading, the U.S. Internal Revenue Service would like to have a chat.
But some digging may be required to identify those taxable proceeds.
Because cryptocurrency exchanges aren’t SEC-regulated, “they’re not legally required to offer the same level of tax reporting that discount brokerages and custodians must provide to stock, bond and mutual fund investors.”
Your startup raised at 40x revenue. What’s it worth at, say, 6x?
Image Credits: Nigel Sussman (opens in a new window)
Are we in a bull market or a bear market?
The publicly-traded software companies that comprise the Bessemer Cloud Index saw “good growth during the pandemic,” reports Alex Wilhelm in The Exchange, but today, it’s lost almost “50% of its value since it reached record highs in late 2021.”
Last year, many software startups boasted of revenue multiples in double digits, which thrilled investors. “What are those startups going to do if they are worth not 100x their recurring revenue, but, say, 8x?” asks Alex.
Dive deep into Snorkel.AI’s pitch technique that raised $135m
Image Credits: Greylock / Snorkel AI
Since launching in 2019, Snorkel.AI co-founder and CEO Alex Rather has raised $135 million across four rounds.
“I was a pitch deck nerd even before giving a real pitch deck,” Ratner said on a recent episode of TC Live.
Storytelling comes up frequently while discussing startup pitch strategy: investors are only interested in entrepreneurs who can convey a holistic understanding of their market and the problem they’re trying to solve.
“To be candid, the startup just needs to get this right,” said Greylock partner Saam Motamedi, who led Snorkel.AI’s $3.3 million seed round. “These are the two things we look for at seed and Series A.”
