Slow-burn venture capital normalization • TechCrunch


WWelcome to Startups Weekly, a special focus on this week’s startup news and trends by Senior Reporter and co-host of Equity Natasha Maskerenhas To get this in your inbox, sign up here.

It’s taken me a while, but I’m realizing that my startup love language is discussing attempts to standardize the opaque and often informal world of venture capital. The obvious tension is one that intrigues me: how to automate a process like writing checks, which requires human buy-in and the art of trust in a way that both parties enjoy.

There are funds that invest entirely based on data. Or tools that help startups see all their financing options at the drop of a profile. Or, as I mentioned this week, a tool for startups that allows companies to simultaneously pitch the same application — or pitch — to multiple angel and pre-seed investors.

The tool, launched by early seed firm Afore Capital, is based on a common application that sends one application to multiple colleges and universities. Afore’s take on the idea is to help founders quickly raise expert investors and help those investors get a consistent, diverse deal flow. A low cost tool – free for both parties to use – sometimes simplicity can come with questions. Afore being so polite and sharing intel? Does a blast provide the same signal as a warm intro?

Former general partner Anamitra Banerjee thinks a finance-focused version of the shared app solves a common conundrum: What if a startup isn’t a good fit for your firm, but a climate-focused emerging startup is still a smart company that makes sense for a fund manager friend? Sometimes, those smart companies disappear through the cracks—think of the number of companies that don’t make it to Y Combinator by a razor-thin margin—rather than moving on to another firm.

Initially, Afore intended to send companies that did not enter the incubation program to a network of outside investors. But Banerjee now sends out startup applications as soon as Afore joins the network, which means Afore will be seen at the same time as other pre-seed investors.

We’re taking the risk of exposing everyone in the group and maybe losing the deal and the allocation and stuff like that… but it kind of shows to them, to us, that we’re not just sending them what we have. It’s over,” Banerji said.

You can read my full article on TechCrunch+: “Is it time for a shared app for startup founders?” DM me on Twitter Or Instagram if you need a discount code for TC+.

In the rest of this newsletter, we’ll talk about maps, secret investor workflows, and when the Kardashian strategy doesn’t quite work.

Charged with map and dismissal

Maps is accusing its former CTO, Jerry Talton, of “sending and receiving sexually explicit, offensive, discriminatory and harassing messages with at least nine women, including during work hours and on the Maps system.”

Here’s why this is important: The lawsuit is not the only sign that Mapa may be linked to internal disputes. The company confirmed it had to lay off 10% of its workforce in its second known workforce reduction following the pandemic.

It doesn’t help that users of a number of charting services, from cap chart management to fund management, have been less than impressed with the platform in recent months. TechCrunch spoke to a fund manager who is transitioning from the platform and says his team has had four different account managers in less than two years, which “really didn’t help the continuity and understanding of the fund and our needs.”

Image Credits: Map

SBFstack

Sam Bankman-Fried, the legendary founder and former CEO of FTX, launched Substack this week. As my colleague Mary Ann Azevedo said, “It’s a very unusual move for someone who was recently arrested and charged with eight counts of criminal mischief in the United States.”

Here’s why it’s important: As we’ve discussed in fairness, the Kardashian tactic of distraction doesn’t work for this ex-billionaire. There’s a strange feeling surrounding SBF’s recent actions, whether he’s pleading not guilty or saying it’s smart to laugh at his Substack. It adds so much levity to a situation where it can ultimately be taken too seriously.

Launching Substack is no different; We are talking about it, thinking about putting the lawyer aside. But what if this is not as extreme as we think? What if SBF’s noisy, extraterrestrial speech is noticeable, becoming overshadowed and intensified by the number of times he says it, just because no one else is watching? It is distracting; We will see more until the expected trial in October.

NEW YORK, US - JANUARY 03: Former FTX CEO and Founder Sam Bankman-Fried arrives in Manhattan Federal Court on January 03, 2023 in New York City.  (Photo by Fatih Aktas/Anadolu Agency via Getty Images)

Image Credits: Fatih Aktas / Anadolu Agency / Getty Images

follow up

You’ve probably been reading a lot about ChatGPT, OpenAI’s artificial intelligence tool for its advanced messaging capabilities. This tool, recently made available to the public, is smart enough to answer tough and silly questions about deep topics, making it a staple in debates led by writers, educators, artists and others.

But beyond the initial excitement around the tool, I wanted to track if it was making its way into people’s workflows. So, I understand how investors are using ChatGPT for TC+ with Kyle Wiggers and Christine Hall.

Here’s why it’s important: Some investors have stated that ChatGPT can be used for market size claims or for validation purposes around growth potential; At the same time, Google can too. The argument for AI is of course that the content is original and perhaps more targeted to a person’s exact questions, whereas a general Google search requires more digging and putting together different articles.

As a criticism of the beginning of this newsletter, ChatGPT can be seen as another way for the venture to try to automate itself. It just depends if investors think it’s smart to reject startups, or if feedback is valued as the key currency of network building.

Artificial Intelligence - Chatbot concept

Image Credits: Carol Yepes/Getty Images

Talking points

Here is a list of other incomplete news that should be announced this week:

Featured on TechCrunch.

Dungeons and Dragons content creators are struggling to make ends meet.

Tesla continues to cut prices, this time by 20%.

What happens at CES stays at CES?

Digital shows that our obsession with pets means that animal-focused startups are on the rise.

Users say third-party Twitter apps are having problems

Featured on TechCrunch+.

You will not grow to your 2021 estimate.

Pitch Deck Teardown: Mint House $35M Series B Pitch Deck

Why Africa Didn’t Have a Unicorn Last Year Despite Record Fundraising

Web3 can help fashion become more sustainable.

Pittsburgh’s AI expertise can lend itself to an already growing startup market.

So, I went out to enjoy the weekend with some old friends in Providence. New England, how I miss you, your pleasant weather and nostalgic streets.

Talk soon,

N





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