startup fundraising

How to land investors who fund game-changing companies • ZebethMedia

By zebethcontrolPosted on November 4, 2022Posted in Climate, climate tech, EC Food Climate and Sustainability, EC Hardware, EC TechCrunch Disrupt 2022, Sila, startup fundraising, Startups, TechCrunch Disrupt 2022, VentureNo Comments

A lot of problems worth solving aren’t ones that you can solve in a year or two or even 10. For founders and investors alike, such long timelines can seem daunting. But for Gene Berdichevsky, co-founder and CEO of battery tech startup Sila, hard tech problems are also some of the most tantalizing. “It’s always a good time to be a hard tech startup,” Berdichevsky said at ZebethMedia Disrupt. “One of the reasons is that the world doesn’t change just because it should. It changes because someone goes after something insanely hard and actually succeeds at it.” Such hard.tech startups run the gamut from advanced batteries like those made by Sila to nuclear fusion, quantum computing, automation and robotics. Any tech that has the potential for such broad impact also has a massive potential market, and that means a certain class of investors are willing to be in it for the long haul. “Hire people to do the technical stuff. Keep an eye on it, but then go learn the other pieces.” Gene Berdichevsky, co-founder and CEO, Sila “We look for real step-change, game-changing technologies that are going to benefit everyone and we think that will drive a huge [total addressable market],” said Milo Werner, a general partner at The Engine. When Berdichevsky founded Sila, he believed his company’s technology, a silicon-based anode that promises to improve lithium-ion battery energy density by 20%–40%, would be a significant enough advance that it would have no problem finding a market. What he didn’t expect was how long it would take. When Sila’s first product debuted inside the Whoop 4.0 wearable last year, the path to market had been twice as long as Berdichevsky had expected.

What investors really think about the TAM slide in your pitch deck • ZebethMedia

By zebethcontrolPosted on November 4, 2022Posted in EC How To, EC TechCrunch Disrupt 2022, startup fundraising, Startups, TechCrunch Disrupt 2022, Total Addressable Market, VentureNo Comments

We’re encouraged to think of pitch meetings as a trial by fire: If an entrepreneur can negotiate deadly traps and slay the doubt monsters that bedevil tech investors, they’ll be rewarded with a golden SAFE note at the end of their quest. Particularly for first-timers, the pitch has become an existential drama, which can lead to poor decisions like overlong slide decks, failing to prepare investors before a meeting, and fatally, exaggerating the size of the total addressable market (TAM) in which they hope to compete. “With TAM, it is almost guaranteed you’re going to be wrong,” Aydin Senkut, the founder and managing partner of Felicis Ventures, said at ZebethMedia Disrupt. “It’s either going to be too large or too small.” Kara Nortman, a managing partner at Upfront Ventures, said the TAM numbers given in a pitch do not control whether she’s likely to invest. “I would say [it is] more important to be able to articulate how big something can become and to show that you have a thought process around TAM, if it’s early.” According to Deena Shakir, a partner at Lux Capital, TAM, along with the associated metrics serviceable addressable market (SAM) and serviceable obtainable market (SOM), aren’t meant to be carved in stone. They’re simple planning tools that help founders show investors their company’s upside potential, while SOM and SAM help them offset risk. “If we’re taking the meeting, we all sensibly think there’s something there that’s interesting enough to be potentially venture-bankable,” she said. “The way it’s calculated and the way the founder is thinking about it tells us not necessarily about the business or its future, but about how the founder thinks about company creation. And that’s much more important at the earliest stage.” All three panelists said TAM, SAM and SOM numbers offer a window into a founder’s mindset, but they’re not determinative factors, since they already have a general understanding of the sectors in which founders hope to compete.

I reviewed 1,000+ pitch decks. These are the most common mistakes • ZebethMedia

By zebethcontrolPosted on November 3, 2022Posted in EC Pitch Deck Teardowns, fundraising, Pitch Deck Teardown, startup fundraising, Startups, VentureNo Comments

Over the last six months, I’ve written up 25 Pitch Deck Teardowns — the popular series of articles where I review a pitch deck in detail, celebrating the wins and gently (and sometimes not-so-gently) suggesting improvements. We’ve seen 74-slide decks (yes, really), decks that are riddled with spelling mistakes and bogged down by hideous design (but still work incredibly well), and decks where the founders don’t fully seem to understand what market they are in. For every deck I reviewed for my ZebethMedia series, I saw dozens of other decks as well. Don’t tell my bosses, but I have a side hustle as a pitch coach, and through that, I see a lot of decks. I also am friends with a bunch of lovely VCs and accelerators who often forward decks for me to take a look at. I have a folder with hundreds and hundreds of pitch decks, ranging from $10,000 angel rounds to multibillion-dollar deals in progress. People on occasion send me screenshots of slides, too (I like to think of those as “unsolicited deck pics.” Ahem.) In any case, I have long since lost count, but I’ve probably seen a few thousand pitch decks over the past few years. Suffice it to say: I have opinions about ’em. In this post, I want to break down the top 11 (yes, it had to be 11) most common mistakes I see in pitch decks, along with a bunch of examples of how these mistakes show up. Oh, and if you want to submit your own deck for a potential pitch deck teardown, you’re in luck: Instructions are here. Let’s gooooo. Not knowing your audience A pitch is a story, and stories have audiences. You wouldn’t put a child in front of Arnold Schwarzenegger hacking and slashing his way through various parts of the Predator. Similarly, the story you use to sell to your customers is not the same story that you need to get across to your would-be investor audience. You need to understand how VC works; that’s non-negotiable. If you don’t, it means that you have no way of knowing how to tell your story, and you don’t truly understand what they are buying. Get that resolved for yourself! Examples of decks that get this right: Examples of decks that get this wrong: Not fully understanding your market sizing It’s painful to read a pitch deck and realize that the founders have no idea how to size their own market. At the earliest stage, your company needs to prove exactly two things: Can you build a venture-scale business in this market? Is this the right team to build that business? The way you answer the first question is by having sensible things to say about the market you operate in, and how you see the size and trajectory of that market. If you fail to do that, guess what — you’re proving that you’re not a good founder, and you’re probably not the right team to build the business. Yes, calculating the TAM, SAM and SOM for your market can be really hard, and sometimes it involves assumptions and guesswork, but that’s OK — you’re not getting graded on how accurate your numbers are but on how you view and think about the market you are in. If the numbers are “wrong,” but you can defend why you thought about them this way, it tells your potential investors a lot about your quality as a founder. Examples of decks that get this right: Examples of decks that get this wrong:

The seas are getting even rougher for Chinese startups • ZebethMedia

By zebethcontrolPosted on October 24, 2022Posted in China, Chinese venture capital, EC East Asia, EC News Analysis, EC venture capital, startup fundraising, Startups, VentureNo Comments

The third quarter was far from favorable for Chinese startups looking to raise money. Data shows that for upstart tech companies in the country, Q3 2022 was the worst time to raise venture capital since Q1 2020, with far less capital invested than either the rest of 2020 and 2021, or for most of 2018 and 2019. China is hardly alone in seeing its domestic startup scene see slowing capital inflows, but recent news puts the country-specific information into new context: Given today’s Chinese tech share sell-off, there is fresh pressure on technology companies’ valuations in the country, and that could impact startup fundraising. If China saw fundraising decrease 10% in Q4 2022 from Q3 2022 — measured in dollar terms, not the number of funding events — we’d see startups facing the slowest quarter since the onset of 2018, according to CB Insights data. A steeper decline would put Q4 2022 as the nadir in the nation for the last five years. Why are Chinese tech stocks suffering today? After a period when the sale of the nation’s equities onshore was at least somewhat meddled with, the value of major and minor Chinese tech companies fell today in the wake of the Chinese Communist Party’s every-five-year confab. This time ’round, current Chinese Premier Xi Jinping secured not only another five years in power, he also solidified a cabinet of like-minded allies. The context is clear: The Xi method of managing China remains ascendant. And investors in tech companies, still licking wounds brought on by a regulatory barrage led by Xi — which included some reasonable ideas like dismantling certain anti-competitive practices along with some less enticing policies — are not enthused. The result? A bloodbath (American share price changes as of the time of publishing):