VC ‘bottom feeders,’ valuation calculator, think like an investor – TechCrunch


Farmers don’t get embarrassed when the price of corn drops; similarly, there’s no reason for startup founders to lose their joy because publicly traded tech stocks are undercutting their valuations.

If making as much money as you can is your primary goal, however, prepare to be disappointed. Accepting a down round or a smaller seed check isn’t a sign of failure — as it says in the Bible: the rain falls on the just, and the unjust.

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“While the market has quickly turned to favor the buyers, the good news is that it isn’t broken,” according to Jeremy Abelson and Jacob Sonnenberg of Irving Investors.

In a TC+ guest post, they share a calculator for using growth metrics and public market valuations that can help founding teams “triangulate to a more company-specific enterprise value.”

The numbers don’t lie — for all but a few strong contenders, the IPO window is now closed.

But if you have an idea for a product or service that might be valuable to others, spending your days working for someone else is a questionable choice, no matter what’s happening in the stock market.

Thanks very much for reading,

Walter Thompson
Senior Editor, TechCrunch+

Cram downs are a character test for VCs and founders

Hand squeezing fresh orange juice

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

Follow-on investors who take advantage of the closing IPO window to foist unfavorable terms on founders are “the bottom feeders of the venture capital business,” writes Steve Blank.

As the public markets contract and startup valuations follow suit, it’s common for entrepreneurs who have invested years of their lives into a startup to accept “take-it-or-leave-it” terms, says Blank, an adjunct professor at Stanford and senior fellow for Innovation at Columbia University.

Ultimately, “VCs will stop playing this game when founders stop negotiating.”

How to think like an investor: Understanding the actual cost of fundraising

Brain concept with power on off button switch 3d render image

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

Founders in fundraising mode are usually laser-focused on the task at hand, but now that valuations are a moving target, it might be useful to borrow an investor’s perspective.

“The presumption that a company knows what its investors expect with full clarity is a lofty one,” says Rebecca Mitchem, a partner at Neotribe Ventures.

In a post aimed at growth-stage entrepreneurs, Mitchem answers three questions:

  1. How expensive is venture capital (as defined by the amount of dilution)?
  2. What financial milestones will investors expect me to reach between each raise?
  3. What are the more subjective milestones I need to hit to evidence I’m ready for the next raise?

Steer’s Anuja Sonalker explains the benefits of chasing the less glitzy side of autonomy

Anuja Sonalker, ceo and founder of Steer Tech

Image Credits: Bryce Durbin

In the AV industry, the ultimate goal is to create vehicles that can operate in every situation that a human driver could navigate.

It’s a difficult problem to solve: driving is a collection of acquired and practiced skills – negotiating a traffic jam requires a much different set of skills than parallel parking.

“Nobody is going to solve everything. Everybody is going to master one area and then work with others to create that end-to-end ecosystem,” Steer Tech founder and CEO Anuja Sonalker told Rebecca Bellan.

In their interview, Sonalker discusses the importance of automotive cybersecurity, how automating the “endpoint” makes freight more efficient, and why focusing on less glamorous tech can help companies build better products.

MLB forays into the future with new tech for the old ball game

ARLINGTON, TX - OCTOBER 21: Cody Bellinger #35 of the Los Angeles Dodgers looks at an iPad during batting practice prior to Game 2 of the 2020 World Series between the Los Angeles Dodgers and the Tampa Bay Rays at Globe Life Field on Wednesday, October 21, 2020 in Arlington, Texas. (Photo by Alex Trautwig/MLB Photos via Getty Images)

Image Credits: Alex Trautwig / Getty Images

Baseball has come a long way since 1897, when a Princeton math professor designed a pitching machine that ran on gunpowder.

Today, baseball is a technology-driven enterprise where team owners, players, media organizations and individual fans have access to reams of raw statistics.

To learn more about Major League Baseball’s tech stack, enterprise reporter Ron Miller interviewed its CPO and head of engineering, Vasanth Williams.

“MLB has a long history of leveraging data and technology, and being an early adopter of a lot of the technologies, which I love doing,” he said.

An inside look at a Ukrainian fintech startup adapting to life during wartime

data in the colors of ukrainian flag

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

In the 54 days since Russia began its invasion, Ukraine’s IT community has mobilized tools to assist its citizens and military, such as volunteering offices to house displaced citizens and helping employees move out of active war zones, writes Nelia Holovina, a senior content writer at 42Flows.Tech.

In a post for TechCrunch+, Holovina explains how shifting company operations to digital helped them prepare for the war and maintain productivity, even as many workers have put down laptops and picked up arms.

“It is believed that demand for IT will remain high, and the IT sector itself may become the new driver of the economy,” she writes. “The situation depends entirely on how long this war will last and how it will end.”

“Found” receives Webby nomination for best technology podcast

Found, TechCrunch’s podcast where founders share the stories behind their startups, has been nominated for a Webby in the best technology podcast category.

Cast your vote before April 21 to help it win the People’s Voice Award!



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