Happy August! Or, as many of my neighbors like to say, I’m happy fog
San Francisco sits on a peninsula surrounded by cold water, so when the hot summer air blows in, a thick fog obscures the landscape. Some days, the blanket is so thick, visibility is only a few hundred feet.
Uncertainty is a fitting metaphor for tech companies as we hear more talk of layoffs, cost cuts and dry powder than I’ve heard in years.
A bright light in the dark: Startups that generate enough revenue to sustain steady growth will be willing to call on more investors.
A bright light in the dark: Startups that generate enough revenue to sustain steady growth will be willing to call on more investors.
“If you’re a bootstrapped company that hasn’t been on the treadmill yet, you have that option or the ability to choose when to get off,” says Kavan Klinsky, co-founder of payment processor Healthy.
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“Once you’ve scaled up a lot of enterprises, you’re building a venture-scale business, but once the boots are on… you can be really lucky as to what that right moment is,” he told Natasha Mascarenhas.
Even so, she’s interviewed founders at a few bootstrapped startups and found that “even if they don’t want to,” some “may choose to turn to capital to get to the next level of sales” or continue hiring along the way.
Inflation and competing with crypto wages are two factors driving up costs, which is causing many independent founders to reconsider going it alone.
Sketchy CEO and co-founder Saud Siddiqui said, “There’s no fundraising for a lot of bootstrapped companies out there.”
It’s usually investors who approach them, so it depends on the climate, and if people don’t invest, they’ll probably continue to be stuck together.
Thanks so much for reading TC+ this week.
Walter Thompson
Editorial Manager, TechCrunch+
@your main actor
5 Tips to Expand Your Green Startup During the Financial Aid Drought
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I’m not much of a gardener, so I chose houseplants that can withstand my neglect when it comes to water and fertilizer.
Startups trying to create modest solutions to the slow-moving climate disaster we’ve created for ourselves aren’t that strong.
These companies often have long, large funding rounds and product development times that span years, meaning they are particularly vulnerable to external market forces.
Priyanka Srinivas, founder and CEO of food tech startup LiveGreen, shares her advice for entrepreneurs focused on climate and sustainability.
“If your business activities produce the desired results and repeatable cycles – such as developing a new product and distributing it in local markets – then you are ready to multiply.”
American startups looking for money should not ignore government funding
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I know people who have worked with the US Small Business Administration (SBA) to get funding for a food truck, bakery, and clothing store, but I don’t know any startup founders who have taken advantage of this federal program. Grow their companies.
Eligible startups can get government-guaranteed loans of up to $5 million, reports Rebecca Skutack. That’s real money.
“The problem is that business owners often overlook the easy access to debt capital,” said Fountainhead CEO and Founder Chris Hurr.
“They should not give up any equity. [SBA loans] It can often be the perfect stepping stone they need to get to the next level.”
Beyond flexibility: How semiconductor companies can grow with a focused sector strategy.
Image Credits: Bill Vary (Opens in a new window) / Getty Images
Despite chip shortages slowing production of everything from televisions to farm tractors, semiconductor sales are expected to reach $600 billion by 2021.
To keep their heads above water in the coming years, semiconductor makers need to support technologies that are powering other industries, such as AI/ML, digital services and micromobility, said McKinsey partners Ondrej Bourkaki and Nicolas Lehmann.
In terms of demand, we expect 70 percent of growth through 2030 to be driven by just three industries: automotive, computing and data storage, and wireless. […] The task of decision-makers in developing capabilities is to target their capabilities in the most promising segments.
Build a strong deck for your quarterly board meetings
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Board meetings are critical to getting feedback on your progress to date and your future plans, but what’s the best way to give board members the full picture?
According to Yusuf Khan of Ridge Ventures, what details and metrics founders need to “just ask” investors makes quarterly floors so valuable.
“Meeting with your board not only gives you a sense of direction, but also gives you an opportunity to build your relationship,” he says. “People appreciate the opportunity to weigh in.”
In this TC+ post, he shares seven tips for building a presentation that keeps board members up to date on progress, plans, product pipeline, and financials.
