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They say businesses need security to be successful, but new tech startups are still aggressively funded despite the pandemic, recession, trade wars, and various major natural or man-made disasters. Before we get to the positive data, though, let's spend some time reviewing the tough news – there's a lot to process.
TikTok is well on its way to being banned if it doesn't sell first, and Internet leader Tencent's WeChat is also on the list, and the Trump administration has a bigger plan for a "clean network" in the works. The TikTok headlines are the least important part, even if they dominate the media cycle. The social network for sharing videos is becoming a fascinating marketing channel. And when it does, few see a real opening in the short-form video space that the market leaders have not yet penetrated deeply. In fact, TikTok hasn't been a startup story since it acquired Musical.ly. It was actually part of an emerging global market battle between giant internet companies that is being prematurely ended by political forces. We'll never know if TikTok could have continued to leverage ByteDance's vast resources and protected marketplace in China to take over Facebook right on its home turf.
Instead of having quasi-monopolies trying to conquer the world, those with a monopoly of force have messed up the map. WeChat is mainly used by the Chinese diaspora in the US, including many US startups with friends, family and colleagues in China. And the Clean Network plan would potentially separate the Chinese mobile ecosystem from iOS and Android worldwide.
Let's not forget that Europe has also been busy regulating foreign tech companies, including those from the US and China. Now every founder has to wonder how big his TAM will be in a world that is splitting back the leading nation-states and their various allies.
"It's not about the cooling effect (in Hong Kong)," said an American executive in China Rita Liao this week about the view into China's startup world. "The problem is that there are no more opportunities in the USA, Canada, Australia or India. The chances of success in Europe are also decreasing and the risks are increasing sharply. From now on, Chinese companies that operate globally can only look to Southeast Asia, Africa and South America. "
I hope the silver lining is that tech companies from everywhere will still compete in regions of the world that will appreciate interest.
The fundraising campaign for startups is booming and is expected to continue to grow
A new analysis by our friends at Docsend shows that startup investing has actually accelerated this year, at least based on pitch deck activity on the document management platform used by thousands of companies in Silicon Valley and around the world (which makes it a key ) Indicator for this difficult to detect action).
Founders are sending more links than before, and VCs are racing through more decks faster despite the twists and turns of the pandemic and other shocks. In the meantime, many startups have announced that they had cut sharply in March and now have more space to wait or increase on good terms. Russ Heddleston, CEO of Docsend, concludes that activity could indeed continue to pick up as the year progresses as companies adjust to the latest challenges and are ready to come back to market.
All of this should affect how you approach your pitch deck, he writes separately for Extra Crunch. Additional data shows that decks should be on the short side, have a “why now” slide on the COVID-19 era, and show great growth opportunities in financial data.
SaaS founders could exceed VC fundraising through securitized debt
“In a decade we've gone from licensing software to paying for services every month, revolutionizing the hundreds of billions spent on corporate IT,” said Danny Crichton. “There's no reason SaaS founders should use metrics to show for another decade that they shouldn't have access to less dilutive capital from much more sophisticated debt underwriting. That will be a boon to their own returns, but a huge challenge for VC firms that have doubled SaaS. "
Sure, the market offers this through various existing venture capital vehicles and in other avenues like private equity (which has gotten a taste for SaaS metrics over the past decade). Danny sees a more sophisticated world develop as he goes into details on Extra Crunch this week. First, he sees underwriters tying credit to recurring income, even to the point that your clients could be your assets that the bank takes when you go bust. The trend could then build from there:
Part two is to pack all of these individual loans into one security. Imagine that you are an investor who believes the world will digitize payroll. You may not know which of the 30 SaaS providers in the market will win. Instead of trying your luck at the VC lottery, you could instead buy 2018 SaaS payroll securities that allow you to have a more secure exposure to this market, albeit without the exponential upward trend typical of VC investments. You can think of grouping debt by market sector, customer type, geography, or some other characteristic.
Help the startup scene in Beirut
Beirut is home to a vibrant startup scene, but like the rest of Lebanon, it's been hit by a massive explosion in its main port this week. Mike Butcher, who has helped connect theinformationsuperhighway to the city over the years, has compiled a guide for local people and organizations you can help, as well as stories from local founders of what they are overcoming. Here is Cherif Massoud, a dentist who became the founder of the Basma startup for invisible braces:
We are a team of 25 and we were all in our Beirut office when it happened. Fortunately, we all survived. No words can describe my anger. Five of us were badly injured because glass was broken on their bodies. The fear we lived was traumatic. The next morning we went back to the office to clean up all the mess, measured all the broken windows, and started rebuilding. It's a miracle we're alive Our markets are mostly KSA and the UAE so customers were still buying our treatments online but the team had to recover so we decided to take a break, shut down for a few days and rest until next Monday.
How to Build a Great Revenue Stack
Every business made an effort to figure out how to sell and marketing online during the pandemic. Fortunately, the Cambrian SaaS product explosion began years ago and now there are many powerful options for sales teams of all shapes and sizes. The problem is how to properly put everything together for your company's needs. Tim Porter and Erica La Cava from Madrona Venture Group have created a framework for building the so-called "revenue stack". In general, while most companies are already using some form of CRM, communications, and contract management software, there are four new "features" that each company needs to identify. What they define as sales promotion, sales engagement, conversation intelligence and sales operation.
Here is an example of Extra Crunch for Sales Engagement:
Some view sales engagement as a smart email cannon and analytics engine for steroids. In reality, it's much more than that. Consider the following examples: How can I communicate with prospects in a personalized and efficient way? How can I make my outbound sales reps more productive and enable them to respond to leads faster? What tools can help me with account-based marketing? What happened to the email you sent to one of your prospects?
Now take these questions and multiply them by a hundred or even a thousand: How do you personalize a multitouch maintenance campaign on a large scale while managing and automating the contact with many different business people in different industry segments? Oh oh. Suddenly it gets very complicated. What matters in selling is a critical understanding of how to send the right information to the right customer and then (and only then) be able to track which elements of that information worked (e.g. led to clicks, conversations, and conversions) … and, ultimately, you're helping your employees do more of it. We see Outreach here as the clear market leader with headquarters in Seattle and SalesLoft as number two. Outreach, in particular, is investing heavily in expanding its offering with additional information and ML to improve automation and improve results.
All about theinformationsuperhighway
Learn how working from home is transforming startups and investing in Disrupt 2020
Extra Crunch Live: Meet Andy Rachleff, CEO of Wealthfront, on Aug 11 at 1:00 p.m. EDT / 10:00 a.m. PDT on the future of investing and fintech
Register for Disrupt to take part in our content series for exhibitors in Digital Startup Alley
Rob Playter, CEO of Boston Dynamics, comes to Disrupt 2020 to talk about robotics and automation
In the course of the week
The story of 2 challenger banking models
The majority of the technicians expect solidarity with Black Lives Matter
"Made in America" is geared towards (state) life support and the prognosis is not good
What Microsoft should ask for TikTok in exchange for its "payment" to the US government
Equity Monday: Could Satya and TikTok Make ByteDance Investors Happy Enough To Dance?
5 VCs on the Future of Michigan's Startup Ecosystem
Eight trends are accelerating the age of the commercial quantum computer
A look into Gmail's product development process
The story behind Rent the Runway's first check
After Shopify's big quarter, BigCommerce is increasing its IPO price range
From Alex Wilhelm:
Hello and welcome back to Equity, theinformationsuperhighway's venture capital-focused podcast (now on Twitter!) Where we unpack the numbers behind the headlines.
As always, I was joined by theinformationsuperhighway editor-in-chief Danny Crichton and our venture capital reporter Natasha Mascarenhas. We had Chris on the dials and a ton of news to get through, so we were pretty excited when we got on the show.
But before we could really start, we had to talk about Cincinnati and TikTok. Pleasantries and blackmail out of the way, we got busy:
- Ecommerce and fintech stay hot as Square posted big profits, Shopify and Etsy do well, and more. We linked this to recent VC results in the fintech space, which hit a record $ 100 million in the second quarter. Elsewhere there have been some signs of weakness, but given the pandemic and recession, the general state of the art is surprisingly hot.
- Gumroad founder Sahil Lavingia has a new seed capital fund that he set up in collaboration with AngelList.
- D2C women's health startup, Stix, raised a $ 1.3 million startup round.
- Quantum computer startup Rigetti raised a Series C worth $ 79 million.
- Rippling raised $ 145 million at a staggering $ 1.35 billion valuation. The company's last valuation, set a year ago, was $ 270 million.
- AgentSync has put together a $ 4.4 million startup round to provide APIs for Insurtech.
- India-based Statiq is pulling out of funding for some nice new products and is building a bootstrap network for EV chargers.
- And by the time we finished, the deal with Byju & # 39; s-WhiteHat Jr. was neat, JIO is sucking up a huge amount of Indian VC, and Natasha's recent play on pod learning made us argue about what things are worth.
It was a fun week again! As always, we appreciate that you are sticking with and supporting the show!
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