When we were playing a word association game, if someone said “startup” I would answer “fundraising”. (I bet you are too.)
Asking people for money is a key aspect of every founder’s journey, but Colin Wallace, managing director of Techstars, says it “can hasten your death”.
For example, raising a round to improve engineering, sales and marketing sounds positive – but what if the business itself has negative unit economics?
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“Often what lies between the company and its ability to find balance is not a lack of funds,” Wallace wrote in TC+.
“Do we have urgent problems? Better to ask. Product problems? Process problems? Human problems? Is my business model fundamentally flawed?
In this article, he examines four situations that often cause entrepreneurs to seek new money and explains why it is so important to get a “clear picture of the motivation for bankruptcy.”
Thank you for reading
Walter Thompson
Editorial Manager, TechCrunch+
@your main actor
Software investors should (re)learn these 3 ideas before diving deep into technology
Image Credits: Christian Sturzenegger (Opens in a new window) / Getty Images
As VCs have turned “software investing into a low-margin financial game,” many “fail to move forward and invest in the next big thing: deep technology,” according to Champ Sutipongchai, co-founder. and General Partner at Creative Ventures.
The SaaS mindset is not relevant for deep technology investment, which means traditional VCs need to adjust their behavior (and expectations) before jumping in.
“The founder-first mantra of software investors is deeply flawed in the tech world,” writes Suttipongchai.
“That kind of magical thinking is the reason their software playbook almost failed.”
Empty Street cracks the code on making coffee shops attractive to VCs
Image Credits: Getty Images
Tech investors don’t tend to back physical businesses because they literally have so many moving parts: SaaS startups can’t get tires or crash a health check, and they certainly don’t need foot traffic.
“But Empty Street has cracked the code on how more than 65 physical coffee shops have the right metrics to attract venture capitalists,” writes Rebecca Szkutak.
“They recently closed a $20 million Series B round in a year where fundraising has taken a big hit — even for low-cost companies.”
Ask Sophie: Can I start a startup if I’m in the US on a student visa?
Image credits: Bryce Durbin / TechCrunch
Dear Sophie,
I found out that I was accepted to my first choice American university!
One day my dream is to start my own startup in the US, is there anything I can do to lay a foundation to make my dream a reality?
– A forward-looking founder
