The nature of my work is not cyclical: VC activity has slowed down dramatically this year, but I’m still busy.
According to the National Venture Capital Association, in the first quarter of 2023, the number of deals for seed-stage startups fell 52% year-over-year. When I look at this number, I can’t help but wonder: what are VCs doing with all their free time these days?
For seed-stage investors, this could be a great opportunity to learn a new language or travel. However, for seed-stage startups, now is the time to understand how much value your investors are actually providing.
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Navin Chaddha, managing partner at Mayfield Fund, said despite the apparent power imbalance, founders need to understand whether the people they do business with understand how to operate in a downturn.
In it, he explores the different ways that initial-stage investors and board members can support early-stage teams, and includes a checklist of ten questions that can help founders assess whether the VC they’re talking to is the right one.
“While it may seem daunting for founders to question potential investors in today’s climate, remember that in the long journey you need to build a zone of mutual trust,” he writes.
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How to Prepare a Hardware Startup for a Series A Funding
In recent months, two tech-friendly banks have collapsed, the Federal Reserve has raised interest rates, and SaaS startups are starting to focus on long-term profitability rather than short-term growth.
“The world we used to live in — the one that revolved around using cheap capital to boost ARR — is gone forever,” wrote Creative Ventures co-founder and GP Champ Suthipongchai.
“So, in this post-low interest rate era, how do hardware companies raise Series A funding in another ‘new normal’?”
Competitive issues in the age of artificial intelligence
The current and future use cases of artificial intelligence technology are exciting, but are these companies boldly charging into this new world, creating legal problems for themselves in the future?
According to attorneys Henry Hauser, Shylah Alfonso and Chris Williams of the law firm Perkins Coie, using AI to develop pricing algorithms, make purchasing decisions or set compensation could violate federal and state laws on consumer protection and antitrust.
“By implementing policies and processes that preserve human control and accountability, organizations can minimize legal risk and avoid unintended consequences,” they wrote.
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FedNow Instant Payments Are About to Unlock Fintech Investment Opportunities
Launched this summer, FedNow is a new initiative by the Federal Reserve that enables instant payments 24/7/365.
Since the platform will offer lower transaction costs and real-time settlement, TX Zhuo, managing partner at Fika Ventures, predicts that it will open up new avenues for fintech companies of all sizes, “and the impact may be realized as early as next year.”
6 Investors Explain Why They’re Bullish on Japan’s Startup Environment Amid Economic Uncertainty
Global investment activity has cooled, but “2022 will be a record year for the Japanese venture capital market,” reports Kate Park.
She interviewed six investors active in Japan’s startup ecosystem to find out why “fund managers remain optimistic despite macroeconomic uncertainty” and asked them for their advice for portfolio companies:
- Gen Isayama, Co-Founder and CEO, World Innovation Lab (WiL)
- Tsuyoshi Ito, CEO and Founding Partner, Beyond Next Ventures
- Katsuya Hashizume, Executive Officer/Partner, Beyond Next Ventures
- Gen Tsuchikawa, CEO, Sony Ventures
- James Riney, CEO and Founding Partner, Coral Capital
- Anis Uzzaman, Founder and CEO, Pegasus Tech Ventures