Ever traveled on a cruise ship?
Pre-COVID, most voyages started with a ship-wide safety drill where passengers gathered, donned life jackets and learned what to do in an emergency.
The ocean has an average depth of 2.3 miles, but these rehearsals have always been a quiet affair. You are going on vacation; what could possible going wrong?
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Likewise, there’s no reason to be afraid of raising money, but like carefree cruisers in full sail, founders should have a healthy respect for a process that’s out of their control.
“Every change is an opportunity to create leverage, and a downturn is no exception,” writes Masha Bucher, founder and general partner of early-stage VC firm Day One Ventures.
In this TC+ post, she discusses the current economic environment and shares “action tips for closing pre-seed to Series B rounds”.
We’re publishing on a reduced schedule over Labor Day weekend, so I’ll be back next Friday with another recap. Thank you so much for reading!
Walter Thompson
Editorial Manager, ukbusinessupdates.com+
@yourprotagonist
Develop an XaaS customer success strategy that drives growth
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Providing users with better service than they expect can literally save software startup. In one study, companies that spent 10% of their annual revenue on customer success achieved maximum net recurring revenue.
“Companies typically use two or more archetypes for customer success,” said Rachel Parrinello and John Stamos of The Alexander Group. “They usually differ by customer segment, business versus technical focus, and sales move focus: adopt, renew, upsell, and cross-sell.”
If you’re interested in optimizing revenue through customer success, read the rest for a full rundown of customer success job design methodology, because “companies shouldn’t design their customer success roles in a vacuum.”
We need to unlearn the lessons of the 2021 fundraising bubble
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Does your startup have a data room? Do you calculate ROI for each new hire before renewing an offer letter?
At the risk of the “do you even lift it?” meme: Every process in your organization can be improved, and founders should make a profit wherever possible, writes Immad Akhund, co-founder and CEO of Mercury.
“Use this tighter market to prepare and ensure your business is scalable, and you’ll do better at fundraising.”
Dear Sophie: What are the fastest visa options to bring in international talent?
Image Credits: Bryce Durbin/ukbusinessupdates.com
Dear Sophie,
Our startup is looking for engineers. Most of our team works remotely, but some of our potential recruits would like to work in the office. They are international students graduating in December, as well as some individuals who have worked remotely with us as contractors.
What are the fastest visa options to consider? Can their supervisor work remotely? Anything else we should keep in mind?
— Strict recruiter
Stop sensationalizing VC’s ‘collapse’: look at the data
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For many founders looking to raise money, this is a terrible time. Fundraising takes much longer than it used to and valuations are much lower than they were a few months ago.
For investors, though, it’s coming back down to earth, says Brian Walsh of WIND Ventures.
“The reality is that there was an unprecedented hype cycle in 2021, and what we’ve objectively seen since early 2022 is a ‘reversion to the mean’ in line with long-term trends.”
To reach the next level of fintech, infrastructure providers must address these pain points
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Can infrastructure companies like Stripe, Plaid and Klarna help struggling fintech startups deal with shrinking valuations and subdued deal flow?
Perhaps, but “to do this, they will have to take a closer look at the issues these customers face on a daily basis,” writes Laura Spiekerman, Alloy co-founder and chief revenue officer.
Finding better ways to prevent fraud and align products with interest rates more quickly can unlock more potential in the industry, Spiekerman says.
“Infrastructure providers need to prioritize and find a way to increase their capabilities for their current customers rather than just signing new ones.”
A Founder Fundraising Action Plan in the Turbulent Waters of Fintech
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Fundraising for startups is an uphill sprint in times of plenty, but during a downturn, it’s an absolute rut.
“It’s not you; it’s the market,” advises Ryan Falvey, co-founder and managing partner of Financial Venture Studio.
“The best founders recognize that the goal is to close a round, not maximize price or minimize dilution,” which means talking to as many investors as possible and taking their money if the terms are fair.
