The public markets may have cooled on fintechs in recent months, but for entrepreneurs who are still considering starting up, “outlook good,” says the Magic 8 Ball.
In 2021, one-third of all unicorns created were fintech companies: investor FOMO, increased use of digital payments, BNPL, and other financial services created a gravitational field that attracted more than one out of every five dollars VCs invested last year.
But that data is available anywhere. What founders really want to know is: what are investors looking for right now?
To find out, fintech reporter Mary Ann Azevedo contacted several active fintech investors to hear their thoughts on the state of the market in Q1 2022.
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“Each respondent was kind enough to let us know how they want to be pitched, and for grins, one shared an example of a cold e-mail that worked,” she writes.
Here’s who we surveyed:
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Anish Acharya, general partner, a16z
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Christina Melas-Kyriazi, partner, Bain Capital Ventures
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Ethan Choi, partner, Accel
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Pete Flint, general partner, NFX
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Munish Varma, managing partner, SoftBank Investment Advisers
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Nigel Morris, managing partner, QED Investors
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Tyler Griffin, co-founder and managing partner, Financial Venture Studio
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Nikhil Sachdev, managing director, Insight Partners
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Mark Fiorentino, partner, Index Ventures
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Sheel Mohnot, general partner, Better Tomorrow Ventures
“Crypto came up more than once, and LatAm is hot, hot, hot when it comes to investor interest,” she found.
The survey includes many valuable takeaways for other investors, but we put this together primarily to help fintech entrepreneurs and founders, so if you’re considering starting up in this sector, or know someone who is, please read and share.
We’ll be off on Monday, February 21 in observance of Presidents’ Day in the U.S. Thanks very much for reading TechCrunch+, and have a great weekend.
Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist
3 keys that unlock data-driven fundraising
Image Credits: Mario Marco (opens in a new window) / Getty Images
It’s an opportune moment to launch a new company, but rising interest rates, inflation and any other number of unknown factors could make investors more judicious when it comes to placing bets.
But data-driven founders who can tell a sweet story with the right metrics are much more likely to get an investor’s attention, according to Blair Silverberg, co-founder and CEO of Hum Capital.
“Unfortunately, many companies lack an efficient way to gather, synthesize and interpret data into real-time insights, resulting in the default reliance on static, Excel-based samplings that may not capture the full picture of your company’s potential,” he says.
Did venture capitalists undervalue startups for decades?
Image Credits: Nigel Sussman (opens in a new window)
Here’s something people in tech don’t like to talk about: there’s not a lot of institutional memory in this industry.
For example, many founders who closed funding rounds last year believe that when it rains, it pours — but that wasn’t always the case.
In fact, early-stage startups are raising capital at a higher level and valuations today than their late-stage counterparts did a decade ago.
But were these older startups undervalued, or did market dynamics dictate their pricing?
Following a deep dive of new PitchBook data, Alex Wilhelm reports that it could be a mix of both:
“It appears that more competition helped unlock a more fair market price — yes yes, irony — and that startups are now getting their dollar’s worth earlier on.”
Transform startup investors into growth marketers without them noticing
Image Credits: Darren Robb (opens in a new window) / Getty Images
Could your startup use more marketing support?
Most companies will put off making a full-time growth hire as long as possible, relying instead on a PR firm to bolster their public presence, but that leaves one critical resource untapped: investors.
According to Miles Jennings, founder and COO of Recruiter.com, investors will gladly amplify your messages, but only if you make them shareable and engaging.
In an article for TC+, Jennings shares six tips that can help turn investors into advocates who’ll serve as an extension of your marketing team.
Airbnb’s pandemic slingshot nears completion
Sign with message reading “Please Check In” at the headquarters of short-term rental technology company Airbnb in the South of Market (SoMa) neighborhood of San Francisco, California, October 13, 2017. SoMa is known for having one of the highest concentrations of technology companies and startups of any region worldwide. (Photo by Smith Collection/Gado/Getty Images)
The pandemic was especially tough for companies in travel and hospitality, and for Airbnb, it was nearly catastrophic.
But the company has since bounced back on the back of resurging demand for hospitality and tourism, and a number of favorable changes to its host policies, to the point where it is “hundreds of millions of dollars worth of Q4 revenue larger than in 2019, when it posted $1.11 billion in total top line,” writes Alex Wilhelm.
Why startups may want to rent hardware instead of buying it
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The future of work is still being written, but in the meantime, every startup still needs to set aside money to obtain laptops, monitors, and things employees can sit on.
In the two years since the pandemic began scattering office workers, many companies are now renting crucial hardware with an eye toward flexibility, optimizing tax deductions and scalability, reports Anna Heim.
In a well-researched post, she reviews the benefits and drawbacks of renting hardware, along with tax implications for companies based in Europe and the United States.
How to grow organic traffic with earned media
Image Credits: Jasmin Merdan (opens in a new window) / Getty Images
Few entrepreneurs are natural-born storytellers, and maybe it’s unfair to expect them to do any better.
Many startups are paying a PR agency a monthly retainer of $10,000 or more, but their odds of getting a story placed about their company aren’t much better than spinning a roulette wheel.
According to Amanda Milligan, head of marketing at Stacker Studio, startups can increase organic traffic and improve SEO by developing newsworthy content that will get picked up and shared by media outlets.
In a classic TC+ how-to, she explains how to create earned media that organically boosts ranking keywords, referring domains, clicks, and other key SEO metrics.
Dear Sophie: Should we seek a K-1 visa or marriage-based green card?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I’m a U.S. citizen who has been living and working temporarily in Germany for the past year.
I got engaged last month to my amazing partner – a German citizen — but I now need to return to the U.S. in a few months for work.
Should I get a K-1 visa for my fiancée so she can come with me when I return to the U.S., or should we get married and live apart until she can get a green card and join me in the U.S.?
—Searching for a Speedy Solution
How to find a job as a scout for a VC firm
Image Credits: akinbostanci (opens in a new window) / Getty Images
No lie: some venture capitalists are as rich as Croesus, and getting richer all the time.
Many are former founders, but even so: becoming a VC isn’t easy without the right connections and experience. Without a successful exit or a Stanford network, one way to break in is by working as a scout who sources deals.
Versatile VC founder David Teten and associate Akshat Dixit explain what it means to work as a scout, the role’s earning potential, the process for finding a job, and which questions to ask should you find yourself in an interview.
Additionally, the authors compiled a long list of VC firms that offer scout programs: happy hunting.
Why you shouldn’t ignore Europe’s deep tech boom
Image Credits: Nigel Sussman (opens in a new window)
Even though deep tech laid a foundation for many mainstream and enterprise applications, investment in this area has been largely limited to specialist VC firms.
The space, however, is seeing a resurgence, and European VCs seem to be doubling down on a belief that deep tech startups will reap generous returns, wrote Anna Heim and Alex Wilhelm.
For The Exchange, they analyzed Angular Ventures’ report on VC investment into enterprise and deep tech in Europe and Israel, which revealed “that capital is flowing into the right areas for a European deep tech nexus, or cluster of nexuses, to form.”
Unit’s Itai Damti explains how the company fundraises using culture and value
Image Credits: Unit / Flourish Ventures
Culture is an aspect many founders like to gush about, but few have a concrete plan or vision of how to cultivate the environment they want.
For Unit’s Itai Damti, culture is so important that he and co-founder Doron Somech drafted a document the company uses to communicate their values and expectations to its employees.
Emmalyn Shaw, managing partner at Flourish Ventures, said it was a key factor in her decision to back the company: “In my 20-plus years, I have never seen a document like it.”
In the latest edition of TechCrunch Live, Damti and Shaw discussed Unit’s pitch deck, its unconventional format that put their experience above the product, and how the deck has helped them fundraise successfully.
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