How To Raise An $8 Million Seed Round In Less Than Two Weeks

Jennifer Smith needed to raise the seed round for her tech company Scribe. But she didn’t have two months to step away from her cofounder duties to do it—so she did it in under two weeks.

Scribe makes process documentation quick and easy. Think of running a monthly report. With Scribe, hit a record button on your browser, run the report, and Scribe will record each step of the process. It then gives a step-by-step instructional document with screenshots. It can be used in any industry that’s process-driven to make training a breeze. READ MORE

As SPAC Boom Subsides, Some De-SPACed Companies Seek Chapter 11 Protection

The contraction of the market for special purpose acquisition companies (SPACs) and the recent challenges de-SPACed companies have encountered have attracted considerable press attention. The stocks of many de-SPACed businesses — companies formed by the merger of a SPAC with an operating business — are trading well below the SPACs’ original IPO price, and a number have filed for bankruptcy. READ MORE

M&A Exits For VC-Backed Cyber Startups Continues To Sputter

Just as funding has sputtered to cybersecurity startups in recent quarters, the main exit avenue for startups and investors also has been narrowing.

As one of the largest cybersecurity gatherings kicks off this week in San Francisco — the RSA Conference, where deals have often been announced — M&A deal-making in the cybersecurity space continues to slow with only 13 deals announced for VC-backed startups in the first quarter of the year, per Crunchbase data. READ MORE

PCAOB flags widespread weaknesses in audits of SPACs

A two-year surge in the number of SPACs reversed in 2022 amid financial market volatility, tougher scrutiny of SPACs by the Securities and Exchange Commission and a rise in interest rates during the most aggressive monetary tightening in four decades.

The number of SPAC initial public offerings plummeted to 84 last year, an 86% decline compared with the 613 completed in 2021, according to the PCAOB, which oversees the accounting firms that audit public companies. READ MORE

How To Get a VC to Boomerang Back For a $5 Million Series A Extension

Fundraising is simultaneously one of the most rewarding and painstaking parts of being a founder. No matter what anyone tells you, fundraising is hard. It requires long hours, endless pitching and more “nos” than most people hear in their lifetimes. And just when you think it can’t get any worse, there’s now a pandemic-driven economic crisis in the mix, along with a VC winter. 

When the pandemic first hit in 2020, my company, Anvil, found its purpose in aiding small to medium-sized banks as they distributed loans to small businesses. Our paper automation platform allowed most companies to not only enter the digital age, but flourish in it. In June of that year, we raised a $5 million Series A from investors such as Gradient Ventures, Citi Ventures, Menlo Ventures, Restive Ventures and 122 West.  READ MORE

The Fintech Funding Crunch In 4 Charts

Few sectors illustrate the massive runup in venture funding that occurred in 2021 as well as financial services and the fintech industry. In that year, billion-dollar venture fundings went to neobanks, wealth management providers, buy now, pay later startups, cryptocurrency exchanges and insurance brokers.

Some 20% of the total $681 billion in global venture funding in 2021 went to the fintech sector alone. READ MORE

The List Of Big, Losing Startup Acquisitions Grows Longer

No investor sets out with the intention to buy high and sell low. However, that’s often how deals turn out, particularly pricey startup acquisitions carried out under much frothier market conditions.

In recent weeks and months, we’ve seen increasing evidence of this money-losing dynamic at work. Public companies that bought startups at prevailing valuations a year or more ago are now selling those assets at steep writedowns. Others are holding on, but with big losses on the books. READ MORE

The share of VC deals that are done in Silicon Valley is at an all-time low

The San Francisco Bay Area is the home of Apple, Google, and Meta, but its grip on the technology sector’s future is arguably weakening. Though it remains the single biggest region for US deals involving venture capital, the area’s share of these deals has been on the decline and now stands at 18.6%, according to PitchBook, which tracks private capital markets.

The collapse of Silicon Valley Bank, which was felt more acutely in this market, where it funded many startups, may further contribute to the decline in deal activity in the Bay Area, PitchBook notes. READ MORE

Tech investors’ obsession over profit is already waning

When it became clear that the public market had forever descended from the peaks of 2021, venture investors decided to break camp and head downhill as well, advising their portfolio companies to focus on lowering their burn because capital had suddenly become expensive.

Why the focus on cost-cutting? Because conserving cash is an easy way for startups to postpone fundraising, giving them more time to both increase their revenue and potentially wait for tech valuations to recover. READ MORE

Just how hard is it for startups to raise capital today?

If you are a founder looking to raise your first external capital or your startup is a bit farther down the line, you need to know what’s going on in the world of venture capital. Don’t worry, the TechCrunch+ crew has your back.

Building off of TechCrunch+’s rapid-fire coverage of individual startup funding rounds, we’re digging deep into the global trends shaping venture appetite, covering how startups are responding to a new and more conservative reality. READ MORE

OpenAI Wraps Up Tender as AI Talent War Heats Up

OpenAI has told employees it has finalized a tender offer that allowed some staff to cash out their holdings, one person with direct knowledge of the situation said. The move caps a process that began last fall alongside talks to raise billions of dollars from Microsoft.

Over the past few months, the San Francisco startup behind artificial intelligence–powered chatbot ChatGPT has negotiated the tender offer in which investors buy employee profit units—essentially, rights to future OpenAI profits—at a price that implies a roughly $27 billion valuation, two people with direct knowledge of the discussions said. The size of the deal couldn’t be learned. READ MORE

Series C Isn’t What It Used To Be

In startup life, getting to Series C is kind of like hitting middle age. You’ve been toiling away for a while now, and everyone knows what you do. Nonetheless, it’ll take a lot more money to keep forging ahead.

Lately, U.S. investors have gotten much stingier when it comes to furnishing middle-aged startups with capital to continue on their journeys. One metric to measure this is Series C funding, which is down 74% in the first quarter of 2023 from year-ago levels. READ MORE

Private Equity Firms Pull Out All the Stops to Get Deals Done

Private equity appears to have made it through the failure of Silicon Valley Bank and others last month unscathed. Or has it?

Deal volume fell 9.3 percent to 2,711 transactions, even as the value of deals rose 11.7 percent in the first quarter of 2023. Within seven days of SVB’s demise and the other turmoil it caused, private equity firms announced five mega buyouts worth a total of $31.3 billion. That included the largest of the year: taking Qualtrics private at $12.5 billion. “Clearly, PE dealmakers were undisturbed by the events that preceded and followed the SVB meltdown,” PitchBook said in its quarterly private equity report. READ MORE

How venture capital is shaping up in 2023, in 4 charts

Startups around the globe raised a collective $58.6 billion in venture funding in the first quarter—dropping 13% from the last quarter and at their lowest levels since pre-pandemic, according to new data from CB Insights. In the U.S., numbers were a bit steadier, but only because of Stripe’s whopping $6.5 billion funding announcement in mid-March. International startups, in particular, are struggling to fundraise at the same levels they had been, with funding in Latin America, Asia, and Europe declining by 54%, 27%, and 12% respectively. READ MORE

Venture capital keeps flowing past the warning signs

Venture capitalists are galloping through 2023 with blinders, dodging bank collapses and recession projections to invest tens of billions of dollars.

Why it matters: There's a brick wall ahead, covered in thorns and the jagged remnants of neon "exit" signs.

By the numbers: VC funds invested $58.6 billion globally and $32.5 billion into U.S. startups during Q1, according to data released today by CB Insights. READ MORE

Companies That Went Public via SPACs Log Billions of Dollars in Goodwill Write-Downs

Companies that went public through mergers with special-purpose acquisition companies in recent years booked billions of dollars in goodwill write-downs in 2022, reflecting in part a reckoning of the heady premiums paid to secure deals during the SPAC boom.

Some of the biggest goodwill impairments in 2022 came from SPAC-backed companies like cryptocurrency platform Bakkt Holdings Inc., business-services provider Advantage Solutions Inc., 3-D printing firm Fathom Digital Manufacturing Corp., self-driving vehicle startup Aurora Innovation Inc. and now-bankrupt bitcoin miner Core Scientific Inc., according to financial and risk advisory firm Kroll LLC. Each of these five companies’ pretax impairments exceeded $1 billion last year. READ MORE

North American Startup Funding Takes a Beating In Q1

After four consecutive down quarters, North American startup investors haven’t staged a definitive comeback yet. However, first-quarter numbers do show pockets of resilience, even as the general funding climate remains constrained.

North American funding in the first quarter reached $46.3 billion — a decline of 46% from the same period last year. That’s even including a reported $10 billion investment into OpenAI — largely from Microsoft — and a $6.5 billion round for payments giant Stripe. Without those two large deals, Q1 venture funding would have been down even more dramatically, with a more than 60% decline from the same period last year. READ MORE

Let’s Not Make A Deal: PE Valuation Chasm Is Stalling Deals

Let’s not make a deal—at least, not just now. Not until prices are back to “normal.”

That’s a refrain private equity investors and corporate acquirers seem to be hearing more frequently from founder-owners of bootstrapped businesses. Even those otherwise ready to sell or accept outside capital cling to the belief that their businesses are still worth the sky-high valuations they might have commanded only months ago—before the sharp rise in interest rates, banking industry turmoil and economic uncertainty wreaked havoc on markets. READ MORE