Startup companies
@micshasan5d ago
Realness from Tom here. Just want to see more explaining the rationale for this piece: 'The hangover will start later this year and will be more severe than that from the GFC.' That's a big statement, and it might be true ... would like to understand the evidence.
@tomloverro on TwitterPosts for this tweet(1)
PREDICTION: There's a mass extinction event coming for early & mid-stage companies. Late '23 & '24 will make the '08 financial crisis look quaint for startups. Below I explain when, why & how it will start & offer *detailed advice to founders* on surviving the looming die-off. /1
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Many startups raised ~2 years of cash in 2021 and 2022. They cut burn in H2 2022 to extend that 🛫. But no matter what, they’ll need to raise again (or sell, or become a 🧟) in late 2023 and 2024. /3
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This time is different. 2021, for startups, was more toxic than the GFC. The hangover will start later this year and will be more severe than that from the GFC. /7
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To survive, here’s 7 steps early-stage founders should take: /14
1. Raise 💰now or sooner than you expected, before the Great Flood 🌊of 2023. If you fail, you can always try again later. But if you wait, try later & fail, well… /15
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5. Trade better unit economics for growth. Growth rates are coming way down for everyone this year. It’s all relative when you’re raising money. If you can nail your unit economics, you can always ramp burn and growth later. /19
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7. Be decisive. Half-measures rarely succeed. /END
These dudes were legit everywhere in 2018. Very impressive. At the same time, the messaging always seemed hollow to me. I assumed that I was in the target market, and they made that very clear, but I never heard why I needed to care about a 'credit card for founders.' Felt more like they had a lot of VC money and wanted to take a market. But apparently it worked!
@samdblond on TwitterPosts for this tweet(1)
1/ How Brex went from an unknown company to a household name among startups (our target market) in a matter of weeks:
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4/ We tracked in excel which employees, investors, advisors, and friends were sharing the press with their networks and ensured everyone we wanted to post did so. The same day we blanketed San Francisco, where much of our target market was located, with billboards reading:
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7/ 1) Repetition. A founder might wake up and see our fundraise announcement on social media, on the walk to the office hear an ad for Brex on the SaaStr podcast while passing several Brex billboards, and walk into the office with a bottle of Champagne from Brex waiting for them.
8/ A founder from out of town may come in for SaaStr Annual. When they check in to their hotel the key card to access their room is a Brex credit card, a task rabbit hands them a Brexfast burrito outside the conference, they see our CEO speaking,
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11/ Most Series A startups can afford everything mentioned in this post except the billboards (which were ~150k/mo for 3 months). The PR was earned. Sponsoring podcasts and events is reasonable and common. Champagne was $50 each to a couple hundred people. Burritos were $3 each.
Keep your dignity and protect your quality of life. And the headaches never get better over time, especially in times of stress.
@ericbahn on TwitterPosts for this tweet(1)
I wanted to create a thread about the common reasons why we reject LP money.
1/ As an emerging manager, it's super hard to say NO to money--especially when we first started; but at the same time, LP relationships are 10+ years per fund! You're gonna grow old with these folks, so we gotta like you and agree on values.
The list of automatic NOs:
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4/ THE LP TRIES TO TAKE TOO MUCH ECONOMICS - it's never a good situation when the LP tries to get part of the GP, or preferred economics over your other LPs. This sets a terrible precedent that you'll have the explain to future LPs too, so just avoid it.
Redefining dilution
Everyone generally agrees that dilution should be avoided.VCs insist on pro-rata rights to avoid the dreaded "D" word.Executives often complain, after a new financing, that they should be "made whole" to offset the dilution that came with the new round.Founders work as hard as they can to maximize their valuation at each financing event to avoid painful dilution.
Founder Friends - NYC Luma
Join the NYC founder community to connect with other founders and hear war stories from a founder who went through the wringer and came out the other side.Though Ankur Nagpal went to Berkeley and studied engineering and computer science, his is anything but a typical Silicon Valley founder story.Born in Bombay and raised in Oman, Ankur immigrated to the US to study.