Fundraising tips for early and midstage startups in 2022

Friday, July 22, 2022

Welcome to TechCrunch+ Friday

Image Credits: Massonstock / Getty Images

I won't use this space to dissuade anyone from launching a startup, but founders should embrace the fact that investors are looking for reasons not to give you money these days.

Perhaps you don't have much revenue. Or maybe, too much of your cash flow depends on a single customer. Oh, and when are you on track to join the $100M ARR club?

Given current conditions, best practices for fundraising and finding investor alignment are less relevant than they were a year ago. Back then, the promise of early growth was enough to help many teams close seed and Series A rounds.

Today, startups with long sales cycles that aren't cash-flow positive may not even be considered for follow-on investments.

If you're curious about which kinds of startups investors are (and aren't) willing to look at, Kami Vision CEO Yamin Durrani has written a comprehensive post about the changes he's observed between fundraising in Q4 2021 and Q3 2022.

“Don't panic, VCs are interested in investing right now — just in a few areas,” he writes. In his article, he shares the seven tactics he used to fundraise successfully, such as planning to pitch 30-60 investors.

Right now, it will take longer to raise less money that will value your company lower than you hoped. But if you're launching a startup with the intention of getting rich, you're already on the wrong track.

Thanks for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

Growth cheat code: Use fractional hiring to stay on plan when cutting costs

$Growth cheat code: Use fractional hiring to stay on plan when cutting costs image$

Image Credits: Henrik Sorensen / Getty Images

As winter winds begin to blow, major tech companies like Google, Microsoft and Lyft have each instituted hiring freezes.

Likewise, early stage startups are under pressure to reduce burn while preserving forward momentum, but “fractional hiring is a growth cheat code” when used strategically, says Teja Yenamandra, co-founder and CEO of Gun.io.

“There is now way less competition for the talent you're hiring, and you may be able to lock in a hire who was unaffordable a few months ago.”

Dear Sophie: What are the student and work visa processes for grads?

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I'm in India. I'm interested in applying to American universities next year to study computer science and artificial intelligence, and eventually work in the U.S.

Can you please explain both the visa process for students and for professionals who want to work in the U.S. after graduating? Is there anything I can do to plan ahead?

— Spirited Student

Robotics scene continues to be bullish, but layoffs are looming image

Image Credits: Westend61 / Getty Images

This week at TC Sessions: Robotics 2022, Natasha Mascarenhas spoke with three investors about how "a capital-intensive sector that has a longer sales time horizon and loads of infrastructure hurdles" is weathering this downturn.

Kelly Chen, partner, DCVC
Bruce Leak, founder, Playground Global
Helen H. Liang, founder, FoundersX Ventures

"On the less rosy side, I think the layoffs are yet to come," Chen said.

"In an economic downturn, the customers will be less willing to be experimental, so they're thinking about cutting costs, and then economics just becomes so much more important."

Pitch Deck Teardown: Arkive's $9.7M seed deck image

Image Credits: Arkive

Last week, Haje Jan Kamps covered "blockchain-powered museum" Arkive’s $9.7 million seed round that it will use to build a decentralized museum curated by the crowd.

This week, he reviewed 12 slides from Arkive's winning pitch deck:

Cover slide
Mission slide
Problem slide
Solution slide
Business model slide
Value proposition slide
Roadmap slide
Market context slide
Market size slide
Milestones and What's Next slide
Team slide
Closing slide

What downturn? Investors remain bullish on HR tech as the Great Resignation slows image

Image Credits: Abscent84 / Getty Images

Levi Strauss is popular with Bay Area entrepreneurs: a Bavarian immigrant who arrived during the Gold Rush, he opened a dry goods store that sold supplies to speculators who hoped to fill their pockets of their new denim jeans with shiny nuggets.

Like Strauss, HR tech startups that help other companies dig for golden talent have seen their fortunes rise as the Great Resignation made managing, recruiting and tracking applicants more important than ever.

"As the pandemic accelerated the long-term shifts to more digital, distributed and data-driven work, innovation in HR tech has exploded," said Allison Baum Gates, a general partner at SemperVirens Venture Capital.

Can Medicare save the insurtech market? image

Image Credits: MirageC / Getty Images

In 2020, the U.S. spent nearly 20% of its GDP on healthcare. Every day, approximately 11,000 people turn 65, making them eligible for Medicare, a federally funded health insurance program that's enrolling new patients faster than ever.

Companies that can help consumers navigate the complicated Medicare market have a major opportunity: “The average senior must choose between 57 different plan options, and most can't tell them apart,” said TX Zhuo and James Shecter of Fika Ventures.

They've shared their six-point investment thesis with TC+ readers to show how Medicare is the "bright spark" that could light up “the entire insurtech market.”