Extra Crunch roundup: UiPath’s IPO filing, predicting revenue, how to pivot properly, much more

This is not a boast, but a warning: I could write a how-to article on almost any topic.

Give me enough time to do some research, and I can put together a reliable step-by-step for building a custom gaming PC, installing a hot water heater or interpreting public health data. But since I’ve never actually done those things, I would encourage you to ignore any advice I have to offer.

Trusted advice comes from experience. That’s why Ron Miller interviewed three entrepreneurs who have each built multiple companies to uncover some essential truths about achieving product-market fit:

  • Pouyan Salehi, CEO and co-founder, Scratchpad
  • Rami Essaid, CEO and founder,  Finmark
  • Melonee Wise, CEO and co-founder, Fetch Robotics

The basic tenets presented in Ron’s story will resonate with anyone who’s launched a startup.

Alex Wilhelm was particularly prolific this morning: For The Exchange, he studied UiPath’s 2020 quarterly results to get a clearer picture of its first S-1/A filing. Is the “somewhat slack news regarding UiPath’s potential IPO valuation” a harbinger of things to come?


Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


In a follow-up, he recapped news from the public debuts of Coinbase, UiPath, Zenvia, AppLovin and Grab, all of which “adds up to a somewhat muddled picture of the current IPO market.” It feels like we’re in a turbulent window, but it’s also possible that we’re in the calm after the storm, he suggests.

Final note: I asked TechCrunch graphic designer/illustrator Bryce Durbin to create an image to accompany this primer on raising a Series A round. He didn’t just exceed my expectations — it’s my favorite TechCrunch illustration ever. Thanks, Bryce!

I hope you got something out of reading Extra Crunch this week. Have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

 

Building the right team for a billion-dollar startup

Image Credits: Bryce Durbin/TechCrunch

From building out Facebook’s first office in Austin to putting together most of Quora’s team, Bain Capital Ventures managing director Sarah Smith has done a bit of everything when it comes to hiring.

At TechCrunch Early Stage, she spoke about how to ensure the critical early hires are the right ones to grow a business. As an investor, Smith has a broad view into the problems companies face as they search for the right candidates to spur organizational success.

She touched on a number of issues, such as who to hire and when, when to fire and how to ensure diversity from the earliest days.

So you want to raise a Series A

"So you want to raise a Series A" pamphlet in the style of "The Simpsons"

Image Credits: Bryce Durbin/TechCrunch

During a seed-funding round, a founder needs to convince a venture capital investor on a vision. But during a Series A fundraise, napkin-stage ideas don’t make the cut — a founder needs product progress, numbers and revenue (or at least a plan to eventually generate some).

In many ways, the stakes are higher for a Series A — and Bucky Moore, a partner at Kleiner Perkins, joined TechCrunch Early Stage last week to give founders tactical advice on the process of raising one.

Moore spoke about storytelling over semantics, pricing and where his firm sees itself “raising the bar” for startups.

With the right tools, predicting startup revenue is possible

For a long time, “revenue” seemed to be a taboo word in the startup world. Fortunately, things have changed with the rise of SaaS and alternative funding sources such as revenue-based investing VCs.

Still, revenue modeling remains a challenge for founders. How do you predict earnings when you’re still figuring it out?

How we dodged risks and raised millions for our open-source machine learning startup

Image Credits: erhui1979 / Getty Images

If you have a great idea within the open-core framework, expect your risks to be much lower than with a traditional business structure.

Clearly communicate this fact to venture capitalists for the best chance at securing the seed funding your organization needs.

But it takes more: Boasting a strong community around an emerging open-source product essentially serves as an “introduction letter” to venture capitalists. It highlights the founders’ ability to successfully execute their vision, as well as the mission to bring their product to a commercial reality.

Additionally, the iterative nature of open-source projects leads to fostering a sense of teamwork between the founders, their team and investors and stakeholders.

Founder and investor Melissa Bradley outlines how to nail your virtual pitch meeting

Image Credits: Ureeka

Melissa Bradley is the co-founder of a startup called Ureeka, an investor at 1863 Ventures and a professor at Georgetown’s business school. So it’s not an understatement to say that she understands the fundraising process from every angle.

She both invested and fundraised for her own startup during this last year, where the landscape has shifted drastically. At TechCrunch Early Stage, she led a session on how to nail your virtual pitch meeting.

Bradley covered how to allocate your time during the meeting, how to prepare, how to close out the meetings with a clear list of action items and what to avoid.

Scale CEO Alex Wang and Accel’s Dan Levine explain why sometimes unconventional VC deals are best

Image Credits: Eric Millette / Scale AI

Scale CEO and co-founder Alex Wang credits its success since founding — which includes raising over $277 million and achieving breakeven status in terms of revenue — to early support from investors, including Accel’s Dan Levine.

Accel haș participated in four of Scale’s financing rounds, and Levine wrote one of the company’s very first checks. So on this past week’s episode of Extra Crunch Live, we spoke with Levine and Wang about how that first deal came together, and what their working relationship has been like in the years since.

 

Ride-hailing’s profitability promise is in its final countdown

Let’s parse Uber’s latest, vet its profit promise, consider its rivals and their performance, then ask ourselves if the great ride-hailing and food-delivery booms will ever make back the money they cost to scale.

 

UiPath’s first IPO pricing could be a warning to late-stage investors

Co-founder and CEO of UiPath Daniel Dines

Image Credits: Noam Galai/Getty Images

For UiPath, its initial IPO price interval is a disappointment, though the company could see an upward revision in its valuation before it does sell shares and begins to trade.

But more to the point, the company’s private-market valuation bump followed by a quick public-market correction stands out as a counter-example to something that we’ve seen so frequently in recent months.

Is UiPath’s first IPO price interval another indicator that the IPO market is cooling?

 

How to choose and deploy industry-specific AI models

Image of flow chart on a blackboard.

Image Credits: alexsl / Getty Images

As artificial intelligence becomes more advanced, previously cutting-edge — but generic — AI models are becoming commonplace, such as Google Cloud’s Vision AI or Amazon Rekognition.

While effective in some use cases, these solutions do not suit industry-specific needs right out of the box. Organizations that seek the most accurate results from their AI projects will simply have to turn to industry-specific models.

Any team looking to expand its AI capabilities should first apply its data and use cases to a generic model and assess the results.

Let’s dive into each of these approaches and how businesses can decide which one works for their distinct circumstances.

Atomico’s talent partners share 6 tips for early-stage people ops success

Photo of Talent Partners Caro Chayot and Dan Hynes

Image Credits: Atomico

In the earliest stages of building a startup, it can be hard to justify focusing on anything other than creating a great product or service and meeting the needs of customers or users.

However, there are still a number of surefire measures that any early-stage company can and should put in place to achieve “people ops” success as they begin scaling, according to venture capital firm Atomico‘s talent partners, Caro Chayot and Dan Hynes.

Long story short: You need to recruit for what you need, but you also need to think about what is coming down the line.

5 questions about Grab’s epic SPAC investor deck

grab 1

Image Credits: Roslan Rahman/Getty Images

Southeast Asian superapp Grab is going public via a SPAC.

Grab, which provides ride-hailing, payments and food delivery, will trade under the ticker symbol “GRAB” on the Nasdaq exchange when the combination is complete.

Let’s walk through several key points from Grab’s SPAC investor deck, including growth, segment profitability, aggregate costs and COVID-19, among other factors.

Expect an even hotter AI venture capital market in the wake of the Microsoft-Nuance deal

Microsoft’s huge purchase of health tech AI company Nuance led the technology news cycle this week. The $19.7 billion transaction is Microsoft’s second-largest to date, only beaten by its purchase of LinkedIn some years ago.

For the AI space, the sale is a coup. Nuance was already a public company, but to see Microsoft offer a firm premium over its public-market value demonstrates the value that AI technology can have to wealthy companies. For startups working in the AI space, the Nuance deal is good news; the value of AI revenue was repriced by the acquisition’s announcement — and for the better.

In light of the megadeal, The Exchange dug into the AI venture capital market. What’s happening on the startup side of the coin in the artificial intelligence and machine learning (AI/ML) space?

What’s fueling hydrogen tech?

market-maps-hydrogen-fuel-cell

Image Credits: Bryce Durbin

When the word “hydrogen” is uttered today, the average non-insider’s mind likely gravitates toward transportation — cars, buses, maybe trains or 18-wheelers, all powered by the gas.

But hydrogen is, and does, a lot of things, and a better understanding of its other roles — and challenges within those roles — is necessary to its success in transportation.

Hydrogen is now capturing the attention of governments and private sector players, fueled by new tech, global green energy legislation and post-pandemic “green recovery” schemes.

5 product lessons to learn before you write a line of code

Rearview shot of a young businesswoman having a brainstorming session in a modern office

Image Credits: LaylaBird / Getty Images

Before a startup can achieve product-market fit, founders must first listen to their customers, build what they require and fashion a business plan that makes the whole enterprise worthwhile.

The numbers will tell the true story, but when it happens, you’ll feel it in your bones because sales will be good, customers will be happy and revenue will be growing.

Reaching that tipping point can be a slog, especially for first-time founders. To uncover some basic truths about building products, we spoke to three entrepreneurs who have each built more than one company.

Inside the US’ epic first-quarter venture capital results

In broad strokes, the United States had a crushing venture capital start to the new year, pandemic be damned.

That is especially true when we consider 2020’s full-year figures. Last year, venture capitalists deployed some $166 billion into U.S.-based startups across 12,546 rounds. In contrast, if the first quarter’s pace was maintained during the rest of 2021, the United States would see around 16,000 rounds worth around $280 billion.

Of course, we cannot see the future, so those projections are merely shared to underscore how active the first quarter proved to be.

Dear Sophie: How can I get an H-1B without the lottery?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

For the past few years, our company has put very promising candidates into the annual H-1B lottery. None of them have been selected — and none of them meet the requirements for other work visas like an O-1A.

We lost out again in this year’s H-1B lottery. Are there any other ways we can obtain H-1Bs for our team members?

— Soldiering on in Sunnyvale

 

Alexa von Tobel outlines how founders should manage personal finances

Alexa von Tobel

Image Credits: Alexa von Tobel

Few people are more knowledgeable on the topic of how founders should manage their finances than Alexa von Tobel.

She is a certified financial planner, started her own company in the midst of the recession (which happened to be a wildly successful personal finance startup that sold for hundreds of millions of dollars) and is now a VC who invests and advises founders.

At Early Stage 2021, she gave a presentation on how founders should think about managing their own wealth. Startup founders can often put all their money into their venture and end up paying more attention to the finances of their company than their own bank account.

Von Tobel outlined the various steps you can take to stay out of debt, build credit and accumulate wealth through investments to ensure you have financial peace of mind as you take on the most stressful venture of your life: Starting a company.

How to pivot your startup, save cash and maintain trust with investors and customers

Olive CEO Sean Lane

Image Credits: Olive

A few years ago, founder Sean Lane thought he’d achieved product-market fit.

Speaking to attendees at TechCrunch’s Early Stage virtual event, Lane said Queue, a secure digital check-in tablet for hospital waiting rooms that reduced wait times by uniting and correcting electronic medical records, was “selling like hotcakes.” But once Lane realized it would only ever address one piece of a much bigger market opportunity, he sold off the product, laid off two-thirds of the people affiliated with it and redirected the employees who were left.

Lane explained that what he really wanted to build is what his company — since renamed Olive — has now become, a robotic process automation (RPA) company that takes on hospital workers’ most tedious tasks so nurses and physicians can spend more time with patients.

Building customer-first relationships in a privacy-first world is critical

Concept of knowledge, data and protection. Paper human head with pad lock.

Image Credits: jayk7 (opens in a new window) / Getty Images

In business today, many believe that consumer privacy and business results are mutually exclusive — to excel in one area is to lack in the other. Consumer privacy is seen by many in the technology industry as an area to be managed.

But the truth is that the companies that champion privacy will be better-positioned to win in all areas. This is especially true as the digital industry continues to undergo tectonic shifts in privacy — both in government regulation and browser updates.

For startups choosing a platform, a decision looms: Build or buy?

Blank green arrow signs pointing in both directions on top of a metal post.

Image Credits: Chris Jongkind (opens in a new window)/ Getty Images

Founders shouldn’t be worried about starting companies that rely on other platforms.

Platforms exist to help startups get to users and customers faster and should be used as a means to an end, but everyone must get their piece.

Coinbase’s direct listing alters the landscape for fintech and crypto startups

Coinbase’s direct listing was a massive finance, startup and cryptocurrency event, and the transaction’s effects will be felt for some time in the public market, but also among the startups and capital that comprise the private market.

In the buildup to Coinbase’s flotation — and we’d argue especially after it released its blockbuster Q1 2021 results — there was a general expectation that the unicorn’s direct listing would provide a halo effect for other startups in the space.

The widely held perspective raised two questions: Will the success of Coinbase’s direct listing bolster private investment in crypto-focused startups, and will that success help other areas of financially focused startup work garner more investor attention?

Billion-dollar B2B: Cloud-first enterprise tech behemoths have massive potential

Abstract minimalist conceptual multiple coloured zig zag strip joined as one moving upwards on blue background.

Image Credits: twomeows (opens in a new window)/ Getty Images

The “billion-dollar B2B” paradigm refers to the forces shaping a new class of cloud-first, enterprise-tech behemoths with the potential to reach $1 billion in ARR — and achieve market capitalizations in excess of $50 billion or even $100 billion.

One of the biggest factors driving billion-dollar B2Bs is a simple but important shift in how organizations buy enterprise technology today.

How startups can ensure CCPA and GDPR compliance in 2021

Padlock in woman's hand. Data, information, property and security on the Internet concept. White background

Image Credits: tumsasedgars (opens in a new window) / Getty Images

Data is the most valuable asset for any business in 2021. If your business is online and collecting customer personal information, your business is dealing in data, which means data privacy compliance regulations will apply to everyone — no matter the company’s size.

Small startups might not think the world’s strictest data privacy laws — the California Consumer Privacy Act (CCPA) and Europe’s General Data Protection Regulation (GDPR) — apply to them, but it’s important to enact best data management practices before a legal situation arises.

Should Dell have pursued a more aggressive debt-reduction move with VMware?

Michael Dell, founder and chief executive officer of Dell Inc., speaks during the 2015 Dell World Conference in Austin, Texas, U.S., on Wednesday, Oct. 21, 2015. Dell said trimming debt for the massive deal to combine his namesake company with EMC Corp. should progress relatively quickly in the next couple of years. Photographer: Matthew Busch/Bloomberg via Getty Images

Image Credits: Bloomberg / Getty Images

When Dell announced it was spinning out VMware, the move itself wasn’t surprising; there had been public speculation for some time.

But Dell could have gone a number of ways in this deal, despite its choice to spin VMware out as a separate company with a constituent dividend instead of an outright sale.

It seems Dell hopes to have its cake and eat it too with this deal: It generates a large slug of cash to use for personal debt relief while securing a five-year commercial deal that should keep the two companies closely aligned.

What we all missed in UiPath’s latest IPO filing

Robotic process automation platform UiPath filed its first S-1/A this week, setting an initial price range for its shares. The numbers were impressive, if slightly disappointing because what UiPath indicated in terms of its potential IPO value was a lower valuation than it earned during its final private fundraising.

Here at The Exchange, we wondered if the somewhat slack news regarding UiPath’s potential IPO valuation was a warning to late-stage investors.

But in good news for UiPath shareholders, most everyone — ourselves included! — who discussed the company’s price range didn’t dig into the fact that the company first disclosed quarterly results to the same S-1/A filing that included its IPO valuation interval. And those numbers are very interesting, so much so that The Exchange is now generally expecting UiPath to target a higher price interval before it debuts.

But let’s dig into the company’s quarterly results to get a clearer picture of UiPath.

The IPO market is sending us mixed messages

If you only stayed up to date with the Coinbase direct listing this week, you’re forgiven. It was, after all, one heck of a flotation.

But underneath the cryptocurrency exchange’s public debut, other IPO news that matters did happen this week. And the news adds up to a somewhat muddled picture of the current IPO market.

To cap off the week, let’s run through IPO news from UiPath, Coinbase, Grab, AppLovin and Zenvia. The aggregate dataset should help you form your own perspective about where today’s IPO markets really are in terms of warmth for the often unprofitable unicorns of the world.

Extra Crunch roundup: StockX EC-1, Early Stage recaps, unpacking Alkami’s IPO, more

Over the last few days, we’ve published several articles recapping panels from last week’s TechCrunch Early Stage virtual conference.

Each story is based on an interview with a founder or investor who addressed some of the most common startup dilemmas. Predictably, they’re mostly focused on the how and why:

How do I get into an accelerator? When should I hire a sales team? What’s the best way to earn attention from investors?

TechCrunch reporter Natasha Mascarenhas interviewed Kleiner Perkins partner Bucky Moore to get sector-agnostic advice for founders who are ready to raise a Series A.

Their conversation isn’t a rehash of basic best practices — Moore says the pandemic has fundamentally changed the way he does business: “I actually believe that first meetings over Zoom are here to stay; I think it’s far more efficient.”

I’m looking forward to the eventual return of live TechCrunch events, but each Early Stage recap includes video and a complete transcript. As ever, full articles are available for Extra Crunch members.

Thanks very much for reading — I hope you have a fantastic weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription


The StockX EC-1

Image Credits: Nigel Sussman

Have you ever bought a pig in a poke?

It’s a saying from medieval times: A farmer traveling on an unfamiliar road agrees to buy a baby pig in a bag from a passing stranger. Unfortunately, when the farmer gets back to their hut and opens the sack, there’s a kitten inside.

The risk of getting stuck with a counterfeit item when buying online is real, especially when it comes to sneakers, jewelry and other designer products. That’s why online marketplace StockX created a rigorous product verification and authentication process.

To date, its users have conducted more than 10 million transactions for sneakers, handbags, streetwear, watches and other high-end items that are often produced in limited quantities.

StockX’s prices are regulated and all transactional data is transparent, factors that have combined to help the platform reach a $2.8 billion valuation.

In a four-part series that dropped this week, Extra Crunch analyzes this “foundational new category of market” that began as a hobbyist’s sneaker price chart.

Will Topps’ SPAC-led debut expand the bustling NFT market?

Yes, the baseball card company is going public in a debut that could easily be read as a way to put money into the NFT craze without actually having to buy cryptocurrencies.

Digging into the Alkami Technology IPO

It appears that the slowdown in tech debuts is not a complete freeze; despite concerning news regarding the IPO pipeline, some deals are chugging ahead.

Alkami Technology joins a list that includes Coinbase’s impending direct listing and Robinhood’s expected IPO.

Texas-based Alkami Technology is a software company that delivers its product to banks via the cloud, so it’s not a legacy player scraping together an IPO during boom times.

Let’s dig into the latest SEC filing from the software unicorn.

Chinese startups rush to bring alternative protein to people’s plates

Image Credits: TechCrunch

Last year could well have been the dawn of alternative protein in China. More than 10 startups raised capital to make plant-based protein for a country with increasing meat demand. Of these, Starfield, Hey Maet, Vesta and Haofood have been around for about a year; ZhenMeat was founded three years ago; and Green Monday is a nine-year-old Hong Kong firm pushing into mainland China.

The competition intensified further last year when American incumbents Beyond Meat and Eat Just entered China.

Although some investors worry the sudden boom of meat-substitute startups could turn into a bubble, others believe the market is far from saturated.

LG’s exit from the smartphone market comes as no surprise

Image Credits: Joan Cros/NurPhoto/Getty Images

For those who follow the space, LG will be remembered fondly as a smartphone trailblazer. For well over a decade, the company was a major player in the Android category and a driving force behind a number of innovations that have since become standard.

LG continued pushing envelopes — albeit to mixed effect. But in the end, the company just couldn’t keep up.

This week, the South Korean electronics giant announced it will be getting out of the “incredibly competitive” category, choosing instead to focus on its myriad other departments.

Giving EV batteries a second life for sustainability and profit

Batteries and electric vehicles on a blackboard

Image Credits: Getty Images

Electric cars and trucks seem to have everything going for them: They don’t produce tailpipe emissions, they’re quieter than their fossil-fuel-powered counterparts and the underlying architecture allows for roomier and often sleeker designs.

But the humble lithium-ion battery powering these cars and trucks leads a difficult life. Irregular charging and discharge rates, intense temperatures and many partial charge cycles cause these batteries to degrade in the first five to eight years of use, and, eventually, they end up in a recycling facility.

Instead of sending batteries straight to recycling for raw material recovery — and leaving unrealized value on the table — startups and automakers are finding ways to reuse batteries as part of a small and growing market.

How to kick the 10 worst startup habits with Fuel Capital’s Leah Solivan

Image Credits: Meg Messina

Fuel Capital General Partner Leah Solivan joined us at TechCrunch Early Stage 2021 to explain how to avoid early mistakes in building your startup.

Solivan has ample experience on both sides of the fence, as she founded TaskRabbit and led it to exit through an acquisition by Ikea in 2017. She shared a list of 10 things to avoid in total, but here are some highlights of what to watch out for.

How founders can avoid blind spots and make better decisions with EchoVC’s Eghosa Omoigui

Football Team starting match

Image Credits: miodrag ignjatovic / Getty Images

Eghosa Omoigui, the founder and managing general partner of EchoVC Partners, has helped entrepreneurs navigate the first steps of starting a company and laying the right foundation early on.

Omoigui advocates for founders to develop their own All-22 tape — a tool used by professional football coaches that allows the viewer to see all 22 players on the field at the same time. It improves a coach’s line of sight, and, most importantly, helps avoid missing a critical motion or player.

The concept of this tool can — and should — be applied in the startup world as well, Omoigui said during the virtual TC Early Stage event. He explained what it means to have an All-22 tape and the steps founders should take to develop a skill set that will allow them to see and understand the playbook from all sides.

Building and leading an early-stage sales team with Zoom CRO Ryan Azus

Image Credits: Zoom Video Communications, Inc.

This year at Early Stage, TechCrunch spoke with Zoom Chief Revenue Officer Ryan Azus about building an early-stage sales team.

Azus is perhaps best known for leading the video-calling giant’s income arm during COVID-19, but his experience building RingCentral’s North American sales organization from the ground up made him the perfect guest to chat with about building an early-stage sales team.

We asked him about when founders should step aside from leading their startup’s sales org, how to build a working sales culture, hiring diversely, how to pick customer segments and how to build a playbook.

The dos and don’ts of bug bounty programs with Katie Moussouris

Image Credits: Bryce Durbin / TechCrunch

Katie Moussouris has been in cybersecurity circles since some of the world’s biggest tech companies were startups, and helped to set up the first vulnerability disclosure and bug bounty programs.

Moussouris, who runs consultancy firm Luta Security, now advises companies and governments on how to talk to hackers and what they need to do to build and improve their vulnerability disclosure programs.

At TC Early Stage, Moussouris explained what startups should (and shouldn’t) do, and what priorities should come first.

Start your engines, TechCrunch is (virtually) headed to Detroit

Detroit City Spotlight logo over photo illustration of downtown Detroit

Join us on our next (virtual) field trip to Southeast Michigan. All lights will be shining on the Motor City.

Why Detroit? This is where StockX and Rivian call home, along with a growing stable of medical technology companies, fintech startups and security companies. The area is quickly transforming thanks to active investors, low cost of living and access to amazing universities that have a long history of supporting entrepreneurs.

If you’re interested in what’s happening in Detroit in general, are seeking out a new up-and-coming city to live in, or looking for cool companies and talented founders to invest in, then you’ll want to register and drop Thursday, April 15, on your calendar.

How to get into a startup accelerator

Image Credits: Techstars

Should you try to get your company into an accelerator? How far along should your idea and your team be before applying? When it is time to apply, how do you make your application stand out from hundreds or thousands of others? How fancy do you need to get with the application video?

For answers, we spoke with Neal Sáles-Griffin, managing director of Techstars Chicago and an adjunct professor at Northwestern University. He’s got an incredible wealth of knowledge about all things startups.

Understanding how fundraising terms can affect early-stage startups

Image Credits: Fenwick

Fenwick & West partner (and business lawyer) Dawn Belt joined us at TechCrunch Early Stage to break down some of the terms that trip up first-time entrepreneurs.

Belt has been involved in a number of key Silicon Valley moves, including EV company Proterra’s recent decision to go public via SPAC, as well as IPOs for Bill.com and Facebook. Here, she discusses key concepts like equity and the right of first refusal, and the role they play in the early stages of startup funding.

Bootstrapping, managing product-led growth and knowing when to fundraise

Image Credits: Calendly / OpenView

Product-led growth is all the rage in the Valley these days, and we had two leading thinkers discuss how to incorporate it into a startup at TechCrunch Early Stage 2021.

Tope Awotona is the CEO and founder of Calendly, which bootstrapped for much of its existence before raising $350 million at a $3 billion valuation from OpenView and Iconiq. And on the other side of that table (and this interview) sat Blake Bartlett, a partner at OpenView who has been leading enterprise deals based around the principles of efficient growth.

The two talked about bootstrapping and product-led growth, expanding internationally, when to bootstrap and when to fundraise, and how VCs approach a profitable company (carefully, and with a big stick). Oh, and how to spend $350 million.

Four strategies for getting attention from investors

Marlon Nichols

Image Credits: MaC Venture Capital

Being a successful early-stage investor is about a lot more than simply identifying trends; a successful VC needs to think several steps ahead. For MaC Venture Capital founder Marlon Nichols, it’s an ability that’s helped him spot big names like Gimlet Media, MongoDB, Thrive Market, PlayVS, Fair, LISNR, Mayvenn, Blavity and Wonderschool early on.

Nichols joined us on TechCrunch Early Stage to discuss his strategies for early-stage investing and how those lessons can translate into a successful launch for budding entrepreneurs.

Setting up a management board for success with Dave Easton

Image Credits: Generation Investment Management

Viewed from the outside, board selection and corporate governance can seem like a bit of a black box — particularly at a startup.

Generation Investment Management partner Dave Easton spoke at TechCrunch Early Stage about how to build a board as a founder, and, specifically, how to build a board you can live with. Easton’s experience serving on boards as both a full member and as an observer helped peel back the curtain on the murky topic of good governance.

Founder and investor Melissa Bradley outlines how to nail your virtual pitch meeting

Image Credits: Ureeka

Zoom-based pitch meetings became standard during the pandemic, but many investors say they intend to maintain the practice as more people are vaccinated.

In conversation with Jordan Crook, founder, investor, and business school professor Melissa Bradley offered pointers for how founders can prepare for Zoom calls, common pitfalls to avoid, and how to allocate time during the meeting.

Extra Crunch roundup: Tonal EC-1, Deliveroo’s rocky IPO, is Substack really worth $650M?

For this morning’s column, Alex Wilhelm looked back on the last few months, “a busy season for technology exits” that followed a hot Q4 2020.

We’re seeing signs of an IPO market that may be cooling, but even so, “there are sufficient SPACs to take the entire recent Y Combinator class public,” he notes.

Once we factor in private equity firms with pockets full of money, it’s evident that late-stage companies have three solid choices for leveling up.

Seeking more insight into these liquidity options, Alex interviewed:

  • DigitalOcean CEO Yancey Spruill, whose company went public via IPO;
  • Latch CFO Garth Mitchell, who discussed his startup’s merger with real estate SPAC $TSIA;
  • Brian Cruver, founder and CEO of AlertMedia, which recently sold to a private equity firm.

After recapping their deals, each executive explains how their company determined which flashing red “EXIT” sign to follow. As Alex observed, “choosing which option is best from a buffet’s worth of possibilities is an interesting task.”

Thanks very much for reading Extra Crunch! Have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription


The Tonal EC-1

Image Credits: Nigel Sussman

On Tuesday, we published a four-part series on Tonal, a home fitness startup that has raised $200 million since it launched in 2018. The company’s patented hardware combines digital weights, coaching and AI in a wall-mounted system that sells for $2,995.

By any measure, it is poised for success — sales increased 800% between December 2019 and 2020, and by the end of this year, the company will have 60 retail locations. On Wednesday, Tonal reported a $250 million Series E that valued the company at $1.6 billion.

Our deep dive examines Tonal’s origins, product development timeline, its go-to-market strategy and other aspects that combined to spark investor interest and customer delight.

We call this format the “EC-1,” since these stories are as comprehensive and illuminating as the S-1 forms startups must file with the SEC before going public.

Here’s how the Tonal EC-1 breaks down:

We have more EC-1s in the works about other late-stage startups that are doing big things well and making news in the process.

What to make of Deliveroo’s rough IPO debut

Why did Deliveroo struggle when it began to trade? Is it suffering from cultural dissonance between its high-growth model and more conservative European investors?

Let’s peek at the numbers and find out.

Kaltura puts debut on hold. Is the tech IPO window closing?

The Exchange doubts many folks expected the IPO climate to get so chilly without warning. But we could be in for a Q2 pause in the formerly scorching climate for tech debuts.

Is Substack really worth $650M?

A $65 million Series B is remarkable, even by 2021 standards. But the fact that a16z is pouring more capital into the alt-media space is not a surprise.

Substack is a place where publications have bled some well-known talent, shifting the center of gravity in media. Let’s take a look at Substack’s historical growth.

RPA market surges as investors, vendors capitalize on pandemic-driven tech shift

Business process organization and analytics. Business process visualization and representation, automated workflow system concept. Vector concept creative illustration

Image Credits: Visual Generation / Getty Images

Robotic process automation came to the fore during the pandemic as companies took steps to digitally transform. When employees couldn’t be in the same office together, it became crucial to cobble together more automated workflows that required fewer people in the loop.

RPA has enabled executives to provide a level of automation that essentially buys them time to update systems to more modern approaches while reducing the large number of mundane manual tasks that are part of every industry’s workflow.

E-commerce roll-ups are the next wave of disruption in consumer packaged goods

This year is all about the roll-ups, the aggregation of smaller companies into larger firms, creating a potentially compelling path for equity value. The interest in creating value through e-commerce brands is particularly striking.

Just a year ago, digitally native brands had fallen out of favor with venture capitalists after so many failed to create venture-scale returns. So what’s the roll-up hype about?

Hack takes: A CISO and a hacker detail how they’d respond to the Exchange breach

3d Flat isometric vector concept of data breach, confidential data stealing, cyber attack.

Image Credits: TarikVision (opens in a new window) / Getty Images

The cyber world has entered a new era in which attacks are becoming more frequent and happening on a larger scale than ever before. Massive hacks affecting thousands of high-level American companies and agencies have dominated the news recently. Chief among these are the December SolarWinds/FireEye breach and the more recent Microsoft Exchange server breach.

Everyone wants to know: If you’ve been hit with the Exchange breach, what should you do?

5 machine learning essentials nontechnical leaders need to understand

Jumble of multicoloured wires untangling into straight lines over a white background. Cape Town, South Africa. Feb 2019.

Image Credits: David Malan (opens in a new window) / Getty Images

Machine learning has become the foundation of business and growth acceleration because of the incredible pace of change and development in this space.

But for engineering and team leaders without an ML background, this can also feel overwhelming and intimidating.

Here are best practices and must-know components broken down into five practical and easily applicable lessons.

Embedded procurement will make every company its own marketplace

Businesswomen using mobile phone analyzing data and economic growth graph chart. Technology digital marketing and network connection.

Image Credits: Busakorn Pongparnit / Getty Images

Embedded procurement is the natural evolution of embedded fintech.

In this next wave, businesses will buy things they need through vertical B2B apps, rather than through sales reps, distributors or an individual merchant’s website.

Knowing when your startup should go all-in on business development

One red line with arrow head breaking out from a business or finance growth chart canvas.

Image Credits: twomeows / Getty Images

There’s a persistent fallacy swirling around that any startup growing pain or scaling problem can be solved with business development.

That’s frankly not true.

Dear Sophie: What should I know about prenups and getting a green card through marriage?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

I’m a founder of a startup on an E-2 investor visa and just got engaged! My soon-to-be spouse will sponsor me for a green card.

Are there any minimum salary requirements for her to sponsor me? Is there anything I should keep in mind before starting the green card process?

— Betrothed in Belmont

Startups must curb bureaucracy to ensure agile data governance

Image of a computer, phone and clock on a desk tied in red tape.

Image Credits: RichVintage / Getty Images

Many organizations perceive data management as being akin to data governance, where responsibilities are centered around establishing controls and audit procedures, and things are viewed from a defensive lens.

That defensiveness is admittedly justified, particularly given the potential financial and reputational damages caused by data mismanagement and leakage.

Nonetheless, there’s an element of myopia here, and being excessively cautious can prevent organizations from realizing the benefits of data-driven collaboration, particularly when it comes to software and product development.

Bring CISOs into the C-suite to bake cybersecurity into company culture

Mixed race businesswoman using tablet computer in server room

Image Credits: Jetta Productions Inc (opens in a new window) / Getty Images

Cyber strategy and company strategy are inextricably linked. Consequently, chief information security officers in the C-Suite will be just as common and influential as CFOs in maximizing shareholder value.

How is edtech spending its extra capital?

Money tree: an adult hand reaches for dollar bills growing on a leafless tree

Image Credits: Tetra Images (opens in a new window) / Getty Images

Edtech unicorns have boatloads of cash to spend following the capital boost to the sector in 2020. As a result, edtech M&A activity has continued to swell.

The idea of a well-capitalized startup buying competitors to complement its core business is nothing new, but exits in this sector are notable because the money used to buy startups can be seen as an effect of the pandemic’s impact on remote education.

But in the past week, the consolidation environment made a clear statement: Pandemic-proven startups are scooping up talent — and fast.

Tech in Mexico: A confluence of Latin America, the US and Asia

Aerial view of crowd connected by lines

Image Credits: Orbon Alija (opens in a new window)/ Getty Images

Knowledge transfer is not the only trend flowing in the U.S.-Asia-LatAm nexus. Competition is afoot as well.

Because of similar market conditions, Asian tech giants are directly expanding into Mexico and other LatAm countries.

 

How we improved net retention by 30+ points in 2 quarters

Sparks coming off US dollar bill attached to jumper cables

Image Credits: Steven Puetzer (opens in a new window) / Getty Images

There’s certainly no shortage of SaaS performance metrics leaders focus on, but NRR (net revenue retention) is without question the most underrated metric out there.

NRR is simply total revenue minus any revenue churn plus any revenue expansion from upgrades, cross-sells or upsells. The greater the NRR, the quicker companies can scale.

5 mistakes creators make building new games on Roblox

BRAZIL - 2021/03/24: In this photo illustration a Roblox logo seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Image Credits: SOPA Images (opens in a new window) / Getty Images

Even the most experienced and talented game designers from the mobile F2P business usually fail to understand what features matter to Robloxians.

For those just starting their journey in Roblox game development, these are the most common mistakes gaming professionals make on Roblox.

 

CEO Manish Chandra, investor Navin Chaddha explain why Poshmark’s Series A deck sings

CEO Manish Chandra, investor Navin Chaddha explain why Poshmark’s Series A deck sings image

“Lead with love, and the money comes.” It’s one of the cornerstone values at Poshmark. On the latest episode of Extra Crunch Live, Chandra and Chaddha sat down with us and walked us through their original Series A pitch deck.

 

Will the pandemic spur a smart rebirth for cities?

New versus old - an old brick building reflected in windows of modern new facade

Image Credits: hopsalka (opens in a new window) / Getty Images

Cities are bustling hubs where people live, work and play. When the pandemic hit, some people fled major metropolitan markets for smaller towns — raising questions about the future validity of cities.

But those who predicted that COVID-19 would destroy major urban communities might want to stop shorting the resilience of these municipalities and start going long on what the post-pandemic future looks like.

 

The NFT craze will be a boon for lawyers

3d rendering of pink piggy bank standing on sounding block with gavel lying beside on light-blue background with copy space. Money matters. Lawsuit for money. Auction bids.

Image Credits: Gearstd (opens in a new window) / Getty Images

There’s plenty of uncertainty surrounding copyright issues, fraud and adult content, and legal implications are the crux of the NFT trend.

Whether a court would protect the receipt-holder’s ownership over a given file depends on a variety of factors. All of these concerns mean artists may need to lawyer up.

Viewing Cazoo’s proposed SPAC debut through Carvana’s windshield

It’s a reasonable question: Why would anyone pay that much for Cazoo today if Carvana is more profitable and whatnot? Well, growth. That’s the argument anyway.

Dear Sophie: What should I know about prenups and getting a green card through marriage?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie:

I’m a founder of a startup on an E-2 investor visa and just got engaged! My soon-to-be spouse will sponsor me for a green card.

Are there any minimum salary requirements for her to sponsor me? Is there anything I should keep in mind before starting the green card process?

— Betrothed in Belmont

Dear Betrothed,

Congratulations on your engagement and thanks for reaching out!

There are several things to keep in mind before you tie the knot. These important considerations are particularly relevant since you’re a startup founder, currently on an E-2 visa, and if you’ll continue to live in California.

My law partner, Anita Koumriqian, who is an expert in family immigration law, recently interviewed Lydia Hsu and Kara Foster, the co-founders of Foster Hsu, LLP, a California family law firm, on our podcast. They cover the ins and outs of family law and prenups, and what to know before you tie the knot and pursue the green card process.

California is a community property state, which means if your marriage doesn’t work out, all of the assets acquired by you and your spouse during the marriage will be divided up equally unless you have a prenuptial agreement (prenup) in place before you get married. Since you are an E-2 investor and I imagine you have significant assets, it’s beneficial to consider entering into a prenup before you become legally married.

This is especially important for you in pursuing a marriage-based green card because U.S. Citizenship and Immigration Services (USCIS) often looks to see whether couples are commingling funds in a joint bank account when assessing if your marriage is good-faith to approve your green card.

A composite image of immigration law attorney Sophie Alcorn in front of a background with a TechCrunch logo.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

“A prenup may not be right for you,” says Kara, “but at least you should be educated going into a marriage and know what you’re going to be responsible for, what your obligations are going to be, and how California is going to treat your property, assets and income during the marriage. We have a lot of people coming in later for a divorce saying, ‘If I had known this, I would have done everything differently.’”

In addition to California, there are several other community property states in the U.S., including Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

From the immigration side of things, keep in mind that the Affidavit of Support (Form I-864), which is required for a marriage-based green card, will remain in effect even in the event of a divorce — and takes precedence over any spousal support designated in a prenup.

Extra Crunch roundup: Clubhouse UX teardown, YC Demo Day favorites, proptech VC survey, more

Since the pandemic began, I have been pushing the limits of my imagination to try to picture what cities will look and feel like in the coming years.

If your town looks like San Francisco, where I live, it’s a pressing question: Our once-bustling financial district is a ghost town, but even in outer neighborhoods, the number of vacant storefronts is unsettling. People are starting to emerge after sheltering in place for a year, but we are a long way from fully restoring our shared spaces.

What’s going to happen to those semi-vacant office towers, some of which are still under construction? There’s been renewed talk of converting some skyscrapers into residential housing, but there are real economic/logistic hurdles to clear before that can be broadly applied. Scores of restaurants have closed in recent months; who will take over those spaces? I spend a lot of time walking around, and it’s been a long time since I’ve noticed a “Grand Opening” sign.

Seeking answers, Managing Editor Eric Eldon interviewed 10 VCs who are active in proptech and found that most were generally “optimistic.”

Several expressed genuine uncertainty about the future of offices, but most were bullish about prospects for remote work, the rebirth of physical retail and the emergence of “third spaces” that will fill the gap between work and home.

In a companion article on TechCrunch, Eric explores these broader shifts, concluding, “you can start to see a world emerging that sounds a lot more like the fantasies of a New Urbanist than the world before the pandemic.”

Here’s who he interviewed:

  • Clelia Warburg Peters, venture partner, Bain Capital Ventures
  • Christopher Yip, partner and managing director, RET Ventures
  • Zach Aarons, co-founder and general partner, MetaProp
  • Casey Berman, general partner, Camber Creek
  • Vik Chawla, partner, Fifth Wall
  • Adam Demuyakor, co-founder and managing partner, Wilshire Lane Partners
  • Robin Godenrath and Julian Roeoes, partners, Picus Capital
  • Stonly Baptiste, founding partner, and Shaun Abrahamson, managing partner, Urban Us
  • Andrew Ackerman, managing director, Dreamit

Thanks very much for reading Extra Crunch this week. Have a great weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


It’s time to abandon business intelligence tools

Image Credits: Jon Feingersh Photography Inc / Getty Images

Ideally, BI transforms raw data into actionable information, but according to Charles Caldwell, VP of product management at Logi Analytics, “a gap exists between the functionalities provided by current BI and data discovery tools and what users want and need.”

Few BI tools actually integrate with existing workflows and most offer clunky user experiences, “leaving many individuals feeling like they need an advanced computer science degree to actually be able to pull insights out.”

Instead of requiring workers to abandon workflow applications to access data, embedded analytics are more efficient and easier to use, says Caldwell.

In short, “it’s time to abandon BI — at least as we currently know it.”

Pre-seed round funding is under scrutiny: Is VC pandemic posturing here to stay?

Image Credits: nadia_bormotova / Getty Images

Amid the pandemic, investors became laser-focused on sections of the pitch deck that address monetization and business viability — signs that founders need to come to the table with better-defined businesses in order to succeed.

Investors’ heightened expectations for monetization potential and a company’s positioning within its competitive landscape are unlikely to lessen in the years to come, even in a post-COVID economy.

Clubhouse UX teardown: A closer look at homepage curation, follow hooks and other features

In this photo illustration, the Clubhouse app seen displayed

Image Credits: Rafael Henrique/SOPA Images/LightRocket via Getty Images

Clubhouse’s hockey-stick growth is something most startups would kill for.

However, it also means that UX problems can only be addressed while in “full flight” — and that changes to the user experience will be felt at scale rather under the cover of a small, loyal and (usually) forgiving user base.

Our favorite companies from Y Combinator’s W21 Demo Day

We’re not investors, so we’re not pretending to sort the unicorns from the goats.

But TechCrunch reporters spend a lot of time talking with startups, hearing pitches and telling their stories; if you’re curious about which companies stood out from Y Combinator’s W21 Demo Day, read on.

A look at 4 IPO updates and 2 late-stage funding rounds

There’s a lot going on: The venture capital market is redlining its engines while public markets remain sympathetic to growing, unprofitable companies.

Let’s round up IPO news from DigitalOcean, Kaltura, Robinhood and Zymergen, and big rounds for Lattice and goPuff.

Dear Sophie: When can I finally come to Silicon Valley?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

I’m a startup founder looking to expand in the U.S. I was originally looking at opening an office in Silicon Valley to be close to software engineers and investors, but then … COVID-19 :)

A lot has changed over the last year — can I still come?

— Hopeful in Hungary

Staying ahead of the curve on Google’s Core Web Vitals

Image Credits: Aleksei Naumov / Getty Images

Aside from improved SEO, small business websites optimizing for Google’s new Core Web Vitals will reap the rewards of an improved user experience for their site visitors.

While many are looking at the Core Web Vitals as a big hoop to jump through to please the search powers that be, others are seeing — and seizing — the opportunities that come along with this change.

Steady’s Adam Roseman and investor Emmalyn Shaw outline what worked (and what was missing) in the Series A deck

Image Credits: Steady

When it comes to Steady — the platform that helps hourly workers manage and maximize their income and access deals on things like benefits and financial services — the strengths of the business are clear.

But it took time for founder and CEO Adam Roseman to clearly define and communicate each of them in his quest for fundraising.

 

Discord’s reported $10B exit; Compass and Intermedia Cloud Communications set IPO price ranges

Alex Wilhelm dug into Discord’s possible $10 billion exit to Microsoft and explored IPO price ranges for real estate tech company Compass and Intermedia Cloud Communications, a unified-communications-as-a-service company.

“It’s a lot,” he noted, “but if we don’t get through it all now, we’ll fall behind and feel silly later.”

Will fading YOLO sentiment impact Robinhood, Coinbase and other trading platforms?

The consumer trading frenzy could be slowing.

What would happen to Robinhood and its cohorts if the apparent cooling in consumer trading demand continues?

How VC and private equity funds can launch portfolio-acceleration platforms

Rocket taking off

Image Credits: Miguel Navarro (opens in a new window) / Getty Images (Image has been modified)

Almost every private equity and venture capital investor now advertises that they have a platform to support their portfolio companies, “however, most of us don’t have the budget of an Andreessen Horowitz to support almost every major need” for each startup they’ve bet on, says Versatile VC founder David Teten.

If you’re prioritizing a platform buildout for your firm, consider using the framework he’s outlined.

Automakers, suppliers and startups see growing market for in-vehicle AR/VR applications

hologram-car-interface

Image Credits: Bryce Durbin

Despite all of the pomp and promises about the potential for AR and VR, there isn’t a clear understanding of market demand for bringing the technology to cars, trucks and passenger vans.

Estimates of the global market range from $14 billion by 2027 to as much as $673 billion by 2025, showing just how nascent the market currently is and how much opportunity is present.

Amid pandemic, Middle East adtech startups play essential role in business growth

yellow fish chalkboard

Image Credits: phototechno / Getty Images

The Middle East is a promising region with growing digital advertising solutions despite locals’ attachment to traditional means of advertising.

In recent years, there has been a shift to the active use of social media and online shopping, meaning the Middle East embodies great potential for adtech startups.

Social+ payments: Why fintechs need social features

Image Credits: Getty Images

Social+ products are seeing mass adoption because they marry community with functionality.

This applies even to fintech companies as taboos around money fall away.

The lightning-fast Series A that was 3 years in the making

Image Credits: Mironov Konstantin / Getty Images

It took Christine Tao, founder of Sounding Board, just over three years to recognize the value of executive coaching and get her company to a Series A.

Here’s how she did it.

NFTs could bridge video games and the fashion industry

Music companies, celebrities and fashion brands are some of the latest entities to dip a toe into the burgeoning NFT market.

In part two of a three-part series, we take a look at why NFTs are “the next chapter of digital art history.”

Where is the e-commerce app ecosystem headed in 2021?

woman in cafe with tablet and holding credit card because you know she's about to buy something

Image Credits: Charday Penn (opens in a new window) / Getty Images

The pandemic-induced growth of e-commerce is, by now, well documented.

What is happening in the app ecosystem that supports e-commerce? Is it growing, or are we more likely to see consolidations and IPOs?

Let’s explore.

ironSource is going public via a SPAC and its numbers are pretty good

You’ll want to pay attention to this one: Israel’s ironSource, an app-monetization startup, is going public via a SPAC.

It’s the second SPAC-led debut from an Israeli company in recent weeks worth more than $10 billion, and ironSource is actually a pretty darn interesting company from a financial perspective.

Coursera set to roughly double its private valuation in impending IPO

Money floating in space

Image Credits: Bryce Durbin / TechCrunch

The market views Coursera’s edtech business warmly ahead of its impending public offering.

Coursera is being valued as a software company, likely a breathe-easy moment for still-private edtech companies, since the debut could be an industry bellwether.

Dear Sophie: When can I finally come to Silicon Valley?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie:

I’m a startup founder looking to expand in the U.S. I was originally looking at opening an office in Silicon Valley to be close to software engineers and investors, but then… COVID-19 :)

A lot has changed over the last year – can I still come?

— Hopeful in Hungary

Dear Hopeful:

How and where work is getting done in Silicon Valley (as well as in much of the world)  shifted during the COVID-19 pandemic. That said, yes, it can still make business sense for many to join the Silicon Valley ecosystem.

According to a recent report from PitchBook, Silicon Valley will continue to be the center for VC investment and high-tech talent, even though several large tech companies relocated out of Silicon Valley and implemented full-time work-from-home policies — and many predicted that “the Bay Area tech scene as we know it would be lost, and VC would find a new home.”

Clearly, while the pandemic’s impact on the venture industry will be felt in years to come, VC will continue to be centered in Silicon Valley. In a recent episode of my podcast, I discussed work trends and how to use immigration to support company priorities as well as attract and retain talent in the United States.

The PitchBook report points out that Silicon Valley “has kept a tight hold on fundraising in the U.S., closing on commitments exceeding $151 billion over the past five years, more than the rest of the U.S. ecosystems combined. LPs have continued to funnel capital to area VCs because of the region’s track record of success, which includes 17 of the 22 U.S. companies to ever receive a private valuation of $10 billion or more.”

A composite image of immigration law attorney Sophie Alcorn in front of a background with a TechCrunch logo.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

So while VCs will likely return to the old ways of networking and funding post-pandemic, we’ll see a hybrid of online and in-person meetings because there are so many benefits to in-person networking and exchanging ideas.

Extra Crunch roundup: AI eats fintech, fundraising visas, no-code transition tips, more

Most American retail banks are designed the same way: Customers must pass several desks set aside for loan and mortgage officers before they can talk to a customer representative.

I only step inside a bank a few times each year, but even pre-pandemic, I can’t remember the last time I saw someone sitting at one of those desks. Everyone I know who’s obtained a home or business loan in the recent past started with an online application process.

For this morning’s column, Alex Wilhelm interviewed Dave Girouard, CEO of Upstart, an AI-powered fintech lender that expects to see growth increase 114% this year.

A forecast like that suggests that retail banks have gotten comfortable with using automated tools to calculate risk, which may help explain all the empty desks at my local branch.

“If Upstart hits its 2021 numbers, we will be able to read into them broader adoption of AI among old-guard firms,” says Alex.

According to PitchBook, investors are also more bullish on AI: Q4 2020 saw record funding for AI and ML startups, and exit totals are increasing as well.

I wouldn’t mind adding a gently used desk to my home office; perhaps I should call my bank and see if they have one to spare.

Thanks very much for reading Extra Crunch. Have a great weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


A crypto company’s journey to Data 3.0

young woman uses digital tablet on virtual visual screen at night

Image Credits: dowell (opens in a new window) / Getty Images

Data is a gold mine for a company. If managed well, it provides the clarity and insights that lead to better decision-making at scale, in addition to an important tool to hold everyone accountable.

However, most companies are stuck in Data 1.0.

Dear Sophie: What type of visa should we get to fundraise in Silicon Valley?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

A friend and I founded a tech startup last year. Like a lot of other startups, we’re looking for funding.

Should we come to Silicon Valley to meet with venture capitalists?

How should we begin that process? What type of visa should we get and how easy is it to get?

—Logical in Lagos

To solve all the small things, look to everyday Little AI

Numbers code panel with blue glowing on dark background.

Image Credits: Yuichiro Chino / Getty Images

Why are developers still solving everyday pain points with manual, archaic processes, as opposed to employing “Little AI”?

There are millions of everyday use cases for AI, where technology is empowered to learn and decide on a course of action that offers the best outcome for consumers and companies alike.

How to recruit data scientists without paying top dollar

Female scientists working on project data on whiteboard in research lab

Image Credits: Thomas Barwick (opens in a new window) / Getty Images

The increasing demand for AI and data science experts, driven in part by the pandemic’s economic impact, is showing no sign of abating.

Many employers are failing to identify viable job candidates, much less interviewing or hiring them. What’s holding them back?

Often, it’s a poorly drafted job posting.

3 steps to aid the transition to becoming a no-code company

Image Credits: Korrawin / Getty Images

No-code is changing how organizations build and maintain applications.

It democratizes application development by creating “citizen developers” who can quickly build out apps that meet their business-facing needs in real time, realigning IT and business objectives by bringing them closer together.

How can your company get ahead of the trend?

No taxation without innovation: The rise of tax startups

Image Credits: jokerpro / Getty Images

The idiosyncrasies of sales taxes are a burden on small- and medium-sized businesses, but a new legion of startups is emerging to help companies manage the intricacies of cross-jurisdictional taxes.

Snowflake gave up its dual-class shares: Should you?

Four business people used ropes to tighten their money bags, economic austerity, reduced income, economic crisis

Image Credits: VectorInspiration / Getty Images

Some founders and investors argue that these preferred shares protect them from the whims of the market, but the perspective isn’t universally accepted.

Dual-class shares are a controversial governance structure, and some wonder if they are setting up an unfair playing field by allowing a cabal to wield outsized power.

So why would Snowflake give up such a powerful tool?

MaaS transit: The business of mobility as a service

market-maps-public-transit

Image Credits: Bryce Durbin

As transit agencies seek to win back riders, a flurry of platforms — some backed by giants like Uber, Intel and BMW — are offering new technology partnerships.

Whether it’s bundling bookings, payments or just trip planning, startups are selling these mobility-as-a-service (MaaS) offerings as a lifeline to make transit agencies the backbone of urban mobility.

What eToro’s investor presentation and $10B valuation tells us about Robinhood

Israeli consumer stock-trading service eToro is going public in the United States via a SPAC. One thing that points to?

Trading platforms are being valued like high-margin video games.

The global inequity in venture backing is staggering

I knew African founders lacked the same access to capital as entrepreneurs based in Europe or the United States, but the numbers are far less favorable than I thought.

According to Dauda Barry, CEO of Adaplay Esports, African startups have raised $500 million so far in 2021. If that trend continues, he estimates that the region’s tech companies will exceed the $1.4 billion they raised in 2020.

For perspective: “Stripe raised more yesterday than Barry had reported for the entire African continent this year,” Alex Wilhelm noted in today’s column.

Digging deeper, he pulled numbers from Crunchbase and PitchBook to track VC activity in Africa over the last three months. Once he filtered private equity funding from nonequity investments, the numbers were “staggering.”

“I am surprised that more VCs aren’t investing in Africa,” says Alex. “It smells like investing arbitrage.”

Farmland could be the next big asset class modernized by marketplace startups

"A green row celery field in the Salinas Valley, California USA"

Image Credits: Pgiam (opens in a new window) / Getty Images

Companies that help farmers raise money for agricultural development projects are revolutionizing the way farm and forestland are acquired, developed and commercialized across the United States.

While private equity has gotten a lot of press for expanding the size of their farmland investments, those investments are still dwarfed by the size of the potential farm industry in the U.S., meaning there’s still plenty of opportunity for investors to provide additional capital.

The NFT market is just getting started, but where is it headed?

The crypto art craze might seem silly and expensive, but it could empower artists from emerging economies and underrepresented groups to access the global art market in ways that they couldn’t before.

Can it outlive the hype?

Olo raises IPO range as DigitalOcean sees possible $5B debut valuation

Green arrow going up with red background

Image Credits: jayk7 (opens in a new window) / Getty Images

That Olo raised its IPO price is not a huge surprise, given the software company’s rapid growth and profits. In the case of DigitalOcean, we have more work to do as its approach to growth is a bit different.

Stripe’s epic new valuation and the value-capture gap between public and private markets

Stripe’s $600 million round values the payments and banking software company at $95 billion, near the top end of the valuation range at which the company was said to be raising funds back in November 2020.

Sadly, Stripe is still being coy with growth metrics. The Exchange digs in, no matter how vague.

Julia Collins and Sarah Kunst outline how to build a fundraising process

Julia Collins, the first Black woman to co-found a venture-backed unicorn, and investor Sarah Kunst offer fundraising pointers on Extra Crunch Live.

Kunst says good design is critical, but:

If you’re not a graphic designer, then any incremental minute that you’re spending on trying to make your deck pretty is a waste of time. You need to be focusing on content. Hire somebody, pay them a tiny bit of money to be able to do a nice graphics pass on your deck, and it’s going to make it a lot easier for people to to get the information that you need them to know.

How nontechnical talent can break into deep tech

Image Credits: Getty Images

Startup hiring processes can be opaque, and breaking into the deep tech world as a nontechnical person seems daunting. This column offers tactical advice for finding, reaching out to, cultivating relationships with and working at deep tech companies as a nontechnical candidate.

How to recruit data scientists without paying top dollar

When it comes to building a data science team, many companies fail at the first step — creating a job posting. These mistakes have been amplified in the age of COVID-19.

The increasing demand for AI and data science experts, driven in part by the pandemic’s economic impact, is showing no sign of abating. Many employers are failing to identify viable job candidates, much less interviewing or hiring them.

What’s the biggest obstacle holding them back? In our experience, it is often a poorly drafted job posting. And with the pandemic completely stopping all in-person recruiting events, hiring success hinges on an effective job rec. Previously tolerable mistakes are now fatal.

At The Data Incubator, a data science training and placement firm, we’ve helped hundreds of companies successfully hire data science teams. Honestly, it pains me to see amazing companies undersell themselves in this area.

When it comes to building a data science team, many companies fail at the first step — creating a job posting.

Companies inevitably gravitate toward the same generic buzzwords, promoting themselves as “cutting edge,” “creative,” “collaborative,” “data driven,” “passionate” or “insightful” (just peruse Indeed for examples of these lackluster postings). Or they delve into industry jargon, which may be lost on candidates who are not familiar with the industry.

To streamline the writing process, we recommend that clients break down their competitive advantage into three buckets: compensation, mission and tech. Only by understanding where their strength lies can they successfully market their job openings.

Compensation

Compensation is an important component of making a position competitive. Managers certainly need to fight to ensure their remuneration range is appropriate for their data science roles. However, budget constraints are difficult to overcome, especially given the ability of tech and finance to pay top dollar for these sought-after skills. How to combat this when you don’t have the same budget? Consider listing compensation in job ads.

If you’re one of (the majority of) employers who cannot afford to compete on salary, this will help job seekers understand what to expect. Neither you, nor a potential candidate, wants to spend hours interviewing just to discover that it would have never worked out because of compensation. Save yourself the time and frustration by listing remuneration upfront.

What if you are one of the few employers able to pay major-league salaries? Congratulations, but don’t throw away your hard-won budget! Companies develop reputations for compensation. Unless you are one of the select firms with a reputation for paying top dollar, you will need to signal that to top talent. Otherwise, strong candidates may assume the remuneration is low and not apply, defeating the purpose of paying a high salary in the first place.

Obviously, listing salaries is controversial and there are plenty of reasons why employers are weary of listing salary ranges. However, a recent survey by SHRM found that 70% of professionals want to hear about salary upfront and Glassdoor.com reports that salary is the No. 1 consideration for 67% of job seekers. With all these benefits, employers should seriously consider being more upfront and transparent about what they are able to pay, if only to save themselves time and frustration.

Mission

In the COVID-19 workplace, employees are finding themselves increasingly isolated. With work from home poised to stay even after the virus has dissipated, the risk of isolation will continue. Companies need to double down on articulating their mission and galvanizing employees around that. This doesn’t just start with employment but the very first step of the hiring process: the job posting. Emphasizing mission in the job posting will attract employees.

A crypto company’s journey to Data 3.0

Data is a gold mine for a company.

If managed well, it provides the clarity and insights that lead to better decision-making at scale, in addition to an important tool to hold everyone accountable.

However, most companies are stuck in Data 1.0, which means they are leveraging data as a manual and reactive service. Some have started moving to Data 2.0, which employs simple automation to improve team productivity. The complexity of crypto data has opened up new opportunities in data, namely to move to the new frontier of Data 3.0, where you can scale value creation through systematic intelligence and automation. This is our journey to Data 3.0.

The complexity of crypto data has opened up new opportunities in data, namely to move to the new frontier of Data 3.0, where you can scale value creation through systematic intelligence and automation.

Coinbase is neither a finance company nor a tech company — it’s a crypto company. This distinction has big implications for how we work with data. As a crypto company, we work with three major types of data (instead of the usual one or two types of data), each of which is complex and varied:

  1. Blockchain: decentralized and publicly available.
  2. Product: large and real-time.
  3. Financial: high-precision and subject to many financial/legal/compliance regulations.

Image Credits: Michael Li/Coinbase

Our focus has been on how we can scale value creation by making this varied data work together, eliminating data silos, solving issues before they start and creating opportunities for Coinbase that wouldn’t exist otherwise.

Having worked at tech companies like LinkedIn and eBay, and also those in the finance sector, including Capital One, I’ve observed firsthand the evolution from Data 1.0 to Data 3.0. In Data 1.0, data is seen as a reactive function providing ad-hoc manual services or firefighting in urgent situations.

Extra Crunch roundup: Coupang and Roblox debut, driving GPT-3 adoption, startup how-tos, more

Extra Crunch publishes a variety of article types, but how-tos are my favorite category.

For many entrepreneurs, the startup they are trying to get off the ground might be only the second entry on their resume. As a result, they don’t have much experience to draw from when it comes to basics like hiring, fundraising and growth marketing.

Last week, Natasha Mascarenhas interviewed experts who had some strategic advice for finding the right time to bring a product manager on board. This afternoon, we published a guest post by growth marketer Jessica Li with tips for “how nontechnical talent can build relationships with deep tech companies.”

We’ve also received great feedback on a recent guest post about bootstrapping options for SaaS founders written by a founder who’s actually done it.


Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


If you have some startup-related “how” and “why” questions, please browse our Extra Crunch How To stories. They’re aimed squarely at early-stage founders and workers trying to solve long-term problems.

Thanks very much for reading Extra Crunch this week! I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Welcome to Bloxburg, public investors

SAN FRANCISCO, CA - SEPTEMBER 05: Roblox Corporation Founder and CEO David Baszucki speaks onstage during Day 1 of TechCrunch Disrupt SF 2018 at Moscone Center on September 5, 2018 in San Francisco, California.

Image Credits: Steve Jennings / Getty Images

As Roblox began to trade Wednesday, the company’s shares shot above its reference price of $45 per share. Roblox, a gaming company aimed at children, has had a tumultuous if exciting path to the public markets.

Seeing Roblox trade so very far above its direct listing reference price and final private valuation appears to undercut the argument that this sort of debut can sort out pricing issues inherent in more traditional IPOs.

4 ways startups will drive GPT-3 adoption in 2021

Robot paper holding pen, space for text

Image Credits: Zastrozhnov (opens in a new window) / Getty Images

Trained on trillions of words, GPT-3 is a 175-billion parameter transformer model — the third of such models released by OpenAI.

GPT-3 is remarkable in its ability to generate human-like text and responses, able to return coherent and topical emails, tweets, trivia and much more. In 2021, this technology will power the launch of a thousand new startups and applications.

There have never been more $100M+ fintech rounds than right now

We are in a period of all-time record investment for so-called mega-rounds, or investments of $100 million or more inside the fintech realm.

To date, Q1 2021 is ahead and is thus guaranteed to set a new record, having already bested the preceding all-time high. What’s going on?

Global-e files to go public as e-commerce startups enjoy a renaissance

Global-e, an e-commerce platform that helps online sellers reach global consumers, filed to go public on Tuesday. Global-e’s business exploded amid the pandemic in 2020, and the company expects that the COVID-fueled shift to e-commerce will only lead to future growth.

 

Passive collaboration is essential to remote work’s long-term success

Afro-caribbean woman working from home during the Covid lockdown

Image Credits: Alistair Berg (opens in a new window) / Getty Images

Have you ever popped into a meeting because you overheard a snippet of a conversation and wanted to share your perspective?

That’s passive collaboration — low-friction ways to invite new ideas. But it’s only when we’re able to fully realize passive collaboration virtually that we’ll have unlocked the full potential of remote and hybrid work situations.

 

Dear Sophie: What are the pros and cons of the H-1B, O-1A and EB-1A?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

I’m an entrepreneur who wants to expand my startup to the U.S. What are the benefits and drawbacks of various types of visas and green cards?

The ones I’ve heard the most about are the H-1B, O-1 and EB-1A.

— Intelligent in India

 

Proactive CEOs should prioritize European expansion

Map of Europe in blue with light shining through

Image Credits: Sean Gladwell (opens in a new window) / Getty Images

Many investors will encourage CEOs to remain U.S.-centric this year and perhaps expand their product offering or move into new market segments. But 95% of the world’s population lives outside the U.S., making an expansion into Europe your best growth lever.

 

Coupang follows Roblox to a strong first day of trading

A Coupang Corp. delivery truck drives past a company's fulfillment center in Bucheon, South Korea, on Friday, Feb. 19, 2021. South Korean e-commerce giant Coupang filed for an initial public offering in the U.S. and that could raise billions of dollars to battle rivals and kick off a record year for IPOs in the Asian country. Photographer: SeongJoon Cho/Bloomberg via Getty Images

Image Credits: Bloomberg (opens in a new window)/ Getty Images

After Roblox debuted on Wednesday, Coupang followed, with shares shooting above the South Korean e-commerce giant’s IPO price range. Quick math shows Coupang is worth around $92 billion at the moment, a huge number that nearly zero companies will ever reach.

 

How and when to hire your first product manager

Because product managers and founders often have overlapping skill sets, it can be tricky to find the right candidate.

While it’s different for every company, hiring a PM ensures companies aren’t “chasing the shiny object” but rather building the things that create enduring value for customers.

 

Deep Science: AI adventures in arts and letters

Robotic arm carrying a mechanical part

Image Credits: Alashi / Getty Images (Image has been modified)

AI isn’t confined to the tech sphere; machine learning is applicable across disciplines, from music and the “computational unfolding” of ancient letters to figuring out where EV charging stations need to be built.

 

A first look at Coursera’s S-1 filing

Image Credits: Bryce Durbin / TechCrunch

The SEC filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year.

It paints a picture of growth, albeit one that came at steep expense.

 

Olo’s IPO could value the company north of $3B as Toast waits in the wings

Olo has a history of growth and profitability, making its impending pricing all the more interesting.

But are investors willing to pay more for profits? And, if so, how much?

 

From electric charging to supply chain management, InMotion Ventures preps Jaguar for a sustainable future

Image Credits: Andrew Ferraro — Handout/Jaguar Racing / Getty Images

InMotion’s investment in Circulor, a company that monitors supply chains from raw material inputs to finished outputs with an eye toward sustainable sourcing, shows the firm’s dedication to backing companies across the mobility space broadly.

 

White-label voice assistants will win the battle for podcast discovery

3D headphones with sound waves on dark background. Concept of electronic music listening and digital audio. Abstract visualization of digital sound waves and modern art. Vector illustration. (3D headphones with sound waves on dark background. Concept

Image Credits: maxkabakov (opens in a new window) / Getty Images

Americans are bored, housebound and screened out, driving roughly 128 million Americans to use a voice assistant at least once a month.

This has created a golden opportunity for audio as consumers turn to podcasts, voice assistants and smart speakers.

 

Why I’m hitting pause on ARR-focused coverage

One of the first recurring features Alex Wilhelm established at Extra Crunch was the “$100M ARR Club,” ongoing coverage of startups that have reached scale.

“Forget a $1 billion valuation — $100 million in annual recurring revenue is the cool kids’ club,” he wrote in December 2019. Since then, he expanded it to cover companies that attained $50M ARR.

The concept is a useful lens for studying the market. I can say this with confidence because it’s been widely copied by other tech news outlets. But this morning, Alex surprised me — he’s shelving the ARR Club, at least for now.

“In the end it became a pre-IPO list that was fun but not entirely educational, by my reckoning,” he told me. “The $50M ARR club evolution was supposed to help shake loose more interesting operational details, but just didn’t.”

Before putting the format on hiatus, Alex’s last ARR Club roundup looks at in-office display and kiosk startup AppSpace, data backup unicorn Druva, and Synack, which makes security software.


TC Early Stage: The premier how-to event for startup entrepreneurs and investors

From April 1-2, some of the most successful founders and VCs will explain how they build their businesses, raise money and manage their portfolios.

At TC Early Stage, we’ll cover topics like recruiting, sales, legal, PR, marketing and brand building. Each session includes ample time for audience questions and discussion.

Use discount code ECNEWSLETTER to take 20% off the cost of your TC Early Stage ticket!