SaaS Burns Multiples, 8 Fintech VCs Spill Their Tea, All My Monkeys Are Gone – TechCrunch
Despite the ongoing correction in the public markets, mass layoffs in the technology sector and high inflation, US Treasury Secretary Janet Yellen says we are not yet in a recession.
At the same time, securing startup funding is taking much longer than it did just a few months ago, meaning many companies are burning through cash faster than they can raise it.
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For SaaS startups, it’s not enough to lay off employees and go completely external: To add more time to the countdown clock, founders need to calculate their burn multiples (net burn/net new ARR), says Alex Zekoff, CEO and co-founder of Gjøntentekt automation:
The gold standard is a burn multiple of one – for every dollar you burn, you add a net new dollar of subscription revenue. At less than zero, you are in a cash flow positive position, which is very difficult to do. But say you burn $2 million in a quarter and you only add $500,000 in net new ARR. You have a 4x burn and you probably need to start thinking about how to reduce it.
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The right questions to ask investors when raising money in a down market
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Fundraising chats still start with small talk, but startup teams are under more pressure than ever to make the most of these rare opportunities.
Blair Silverberg, CEO and co-founder of Hum Capital, says entrepreneurs need to resist the urge to get defensive in these sessions.
“In fact, the more a founder can push the questions back to the investor in a way that provides a better understanding of their business and investment strategy, the easier the rest of the conversation will be.”
All my monkeys are gone: Legal disputes at the intersection of IP and NFT
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When Andy Warhol appropriated images of Campbell’s soup cans in 1962, he was lucky: For a variety of reasons, the company decided not to sue him for trademark infringement.
One wonders how the situation would have played out 60 years later if Warhol had minted a series of NFTs with the iconic labels.
In her latest TC+ post, CORPlaw founder Kristen Corpion explored “the most interesting and important IP legal issues currently affecting the creation, transfer, and use of NFTs,” including trademark infringement, the first sale doctrine, and why Seth Green ended up by paying a $100,000 reward to buy back his stolen Bored Ape.
Fundraising in turbulent markets: Why we moved up to series B
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OpenPhone raised a $14 million Series A in November 2020, but when co-founder and CEO Mahyar Raissi realized they needed another round a year later, “it became clear that the market was turning.”
In classic TC+ “how to” style, Raissi, a former software engineer, explains the process his team used to accelerate Series B, the tactics they used to manage investors and how the strategy led to a $40 million round.
“To ensure a timely process, you need to be armed with a complete and bulletproof case for investing in your business. You need to spend a couple of weeks preparing your data and the story behind it before you start talking to VCs,” advises Raissi.
“There is no time to test the waters and get early feedback. Do all this before you start the countdown.”
Pitch Deck Teardown: Alto Pharmacy’s $200M Series E Deck
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If your company raises a $200 million Series E, it’s fair to debate whether you can still call it a startup.
Still, convincing investors to part with enough cash to produce your own sequel to “The Gray Man” is an impressive feat, which is why we were eager to review the deck that helped Alto Pharmacy close such a great round.
8 fintech VCs discuss the changing investment landscape and how they may present in Q3 2022
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What are fintech investors willing to bet on in this climate?
To get a sense of how their views and strategy have changed in recent months, Mary Ann Azevedo asked eight active investors about the advice they offer portfolio companies, how they expect the next few quarters to unfold and their pitch preferences:
- Paul Stamas, Managing Partner and Co-Head of Financial Services, General Atlantic
- Alda Leu Dennis, general partner, Initialized Capital
- Michael Gilroy, general partner and co-head of fintech, Coatue
- Justin Overdorff, Partner, Lightspeed Venture Partners
- Addie Lerner, Founder and Managing Partner, Avid Ventures
- David Jegen, managing partner, F-Prime Capital
- Nik Milanovic, General Partner, Fintech Fund
- Jay Ganatra, Co-Founder and Managing Partner, Infinity Ventures
