December 8, 2023

If someone said “startup” while we were playing word association, I would answer “fundraising”. (I bet you will too.)

Asking people for money is a key aspect of every founder’s journey, but Techstars managing director Colin Wallace says it can also “speed up your death”.

For example, raising capital to accelerate engineering, sales and marketing sounds positive – but what if the business itself has negative unit economics?

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“Most of the time, it’s not a lack of money that hinders a company’s ability to scale,” Wallace wrote in TC+.

“It’s better to ask: Do we have a busywork problem? A product problem? A process problem? A people problem? Is there something fundamentally flawed in my business model?”

In it, he examines four scenarios that often lead entrepreneurs to hunt for fresh cash, and explains why it’s even more important to have a clear understanding of what’s fueling losses.

thanks for reading,

walter thompson
TechCrunch+ Editorial Manager
@your leading role

3 ideas software investors must (re)learn before diving into deep tech

Three light bulbs hanging from the ceiling

Image credits: Christian Strassinger (opens in new window) / Getty Images

Co-founder Champ Suthipongchai said that because venture capital has turned “software investing into a low-margin financial game,” many people “can’t move on and invest in the next big thing: deep tech,” which could be a net positive and General Partner at Creative Ventures.

The SaaS mindset has nothing to do with deep tech investing, which means traditional VCs have to recalibrate their behaviors (and expectations) before investing.

“The ‘founders first’ mantra of software investors is dead wrong in deep tech,” Suthipongchai wrote.

“This magical thinking is exactly why their software manuals are doomed.”

Blank Street cracks the code that makes coffee shops attractive to VCs

Blank Street, Coffee, Startups, Venture Capital

Image credits: Getty Images

Tech investors don’t tend to back brick-and-mortar businesses because they have too many actual moving parts: SaaS startups don’t blow tires or fail health checks, and they certainly don’t need foot traffic.

“But Blank Street claims to have cracked how to get a chain of more than 65 brick-and-mortar coffee shops with the right metrics to attract venture capitalists,” writes Rebecca Szkutak.

“They recently closed a $20 million Series B round in a year where fundraising was precipitously down — even for a company with low management costs.”

Ask Sophie: Can I Start a Startup if I’m in the US on a Student Visa?

Lonely figure at the entrance of a maze hedge with an american flag in the center

Image credit: Bryce Durbin/TechCrunch

Dear Sophie,

I just found out that I was accepted to an American university and it was my first choice!

One day, my dream is to create my own startup in the US. Can I lay any groundwork to achieve my dreams?

— Prospective Founder