Sun. Aug 14th, 2022

Happy August! Or, as many of my neighbors like to say: Happy fog.

San Francisco is on a peninsula surrounded by cold water, so when warm summer air pours in, thick fog obscures the landscape. Some days the blanket is so thick that visibility is only a few hundred feet.

It’s an apt metaphor for the uncertainty that plagues tech companies when we hear about layoffs, downgrades, and more dry powder discussion than I’ve heard in many years.

A bright light amid the gloom: Startups that generate enough income to drive steady growth will find plenty of investors willing to take their calls.

A bright light amid the gloom: Startups that generate enough income to drive steady growth will find plenty of investors willing to take their calls.

“If you’re a startup business that’s not yet on the treadmill, you have those kinds of options or that ability to choose when you want to start,” says Cavan Klinsky, co-founder of payment processor Healthie.

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“If you’ve already set up some ventures, you’re building a kind of business for the scale of enterprises, whereas if you’re bootstrapped… you can be really, really opportunistic about what that right time is,” he told Natasha Mascarenhas.

Still, she interviewed the founders of a handful of startup startups and found that “even if they don’t want to,” some “can choose to turn to venture capital to reach the next level of sales” or keep hiring on track. .

Inflation and competition with crypto salaries are just two factors driving up costs, causing many self-sufficient founders to reconsider going it alone.

“For a lot of bootstrap companies, they’re not fundraising,” said Sketchy CEO and co-founder Saud Siddiqui.

“A lot of times it’s investors who approach them, so it kind of depends on the climate, and if people don’t invest, they might just keep going.”

Thank you so much for reading TC+ this week.

Walter Thompson
Editorial Manager, BestFitnessBands+

5 tips to scale up your green startup during a financing drought

Horizontal side view of a lone yellow flower growing on dry cracked ground;  green startup recession fundraising

Image Credits: flying parade (Opens in a new window) / Getty Images

I’m not much of a gardener, so I chose houseplants that tolerate my forgetfulness regarding water and fertilizer.

However, startups trying to create scalable solutions to the slow-moving climate catastrophe we’ve created for ourselves are not as resilient.

These companies often have long, sizable fundraising rounds and years of product development timelines, meaning they are particularly vulnerable to external market forces.

Priyanka Srinivas, co-founder and CEO of food tech startup Live Green Co., shared her advice for entrepreneurs focused on climate and sustainability:

“If your business has delivered the desired results and repeatable cycles – such as developing a new product and distributing it through local markets – then you are ready to multiply.”

US startups seeking money should not overlook government funding

SBA, startups, loan

Image Credits: CreativaImages (Opens in a new window) / Getty Images

I know of people who have worked with the US Small Business Administration (SBA) to find funding for a food truck, bakery, and clothing store, but I don’t know of any startup founders who have used this federal program to grow their businesses.

Eligible startups can acquire government-guaranteed loans of up to $5 million that will be repaid in ten years, Rebecca Szkutak reports. That’s real money.

“The problem is, business owners often overlook fairly easily available debt,” said Fountainhead CEO and founder Chris Hurn.

“They don’t have to give up equity. [SBA loans] can often be the exact stepping stone they need to move on to the next stage.”

Beyond volatility: how semiconductor companies can thrive with a focused industry strategy

microchip manufacturing factory

Image Credits: Bill Varie (Opens in a new window) / Getty Images

Despite chip shortages slowing production for everything from televisions to farm tractors, semiconductor sales skyrocketed to $600 billion in 2021.

To survive in the coming years, semiconductor makers must support technologies that power other industries such as AI/ML, digital services and micromobility, said McKinsey partners Ondrej Burkacky and Nikolaus Lehmann.

“From a demand perspective, we expect 70% of growth through 2030 to be driven by just three industries: automotive, computer and data storage, and wireless. […] Through a thorough analysis of their resources and capabilities, it is up to decision makers to align their capabilities with the most promising segments as they grow.”

Build a solid deck for your quarterly board meetings

Low risk and ascending conceptual still life;  build a deck for board meetings

Image Credits: Hiroshi Watanabe (Opens in a new window) / Getty Images

Board meetings are key to getting feedback on your progress so far and your plans for the future, but what’s the best way to give board members the full picture?

According to Ridge Ventures partner Yousuf Khan, founders should “just ask” investors what kind of details and metrics will make quarterly decks optimally valuable.

“Reaching your governance not only helps provide a sense of direction, it also gives you the opportunity to build your relationship,” he says. “People appreciate the ability to weigh.”

In this TC+ post, he shares seven tips for creating a presentation that keeps board members informed about progress, plans, product pipeline and finances.

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