What fundamentally makes a startup succeed is that the founding team builds a product that customers like and are willing to pay for. Startups that secure funding at $50+ million share some traits and tactics, which StartupGenome have written a good report about. Some of them are: using stock options, being connected to other founders and having advisors.
I believe it is possible to increase the chance of success by having the right people actively supporting a company, but that is different from “X number of advisors increase your chance to raise capital at $50+ million valuation”.
About one year ago Alliance VC invested in Stockholm-based Steep, a company that is building the modern analytics platform. The magic comes from the combination of a beautiful and intuitive user experience and Steep’s semantic layer.
With Instacart having a successful IPO yesterday, and the IPO of Klaviyo in the US (at $9 billion) and the SPAC merger and listing of Yubico in Sweden (at around 9 billion SEK, which is not a unicorn valuation despite more than 1.5 billion SEK in revenue and being profitable) indicates that the IPO window might be opening.
(This post was published September 22nd, two days later than written as it had gotten stuck in my drafts.)
The initial reaction to Instacart’s IPO, the first major venture-backed IPO since November 2021, seems to suggest so. Instacart went public at ca $10 billion in market capitalization and traded up 12 % the first day (after being up more than 40 % for a while during the day).
Interview on The Peel with Semil Shah about how he built the Silicon Valley based seed investor Haystack (and invested in DoorDash, Instacart, Figma, HashiCorp, Ironclad, Carta, Applied Intuition, and Opendoor among other companies). Interesting inside baseball for early-stage venture investors.
Good video from Craft Ventures on how to think about profitability and fundraising. Video is targeted to companies that have $20-30 million or more in revenue, but good comments on trade-off revenue growth, profitability, fundraising, and how preference shares can work when things don’t go well.
My take is that two type of companies have it easier, not necessarily easy, to raise capital: very high growth or profitable. So always try to be in one of those camps.
Bill Gurley, formerly a partner at Benchmark, talks about how regulation often works much less well than intended. While the examples are American, it is a relevant warning (for lack of a better word) for everyone in Europe as the EU is an active creator of regulations.
David & Ben of Acquired, podcast with deep-dives into successful companies, have a session with David of Founders, podcast about founders and companies. Podcast and business nerds talk 3+ hours about podcasting, founders, business, and much more.
There’s often a fair bit of romanticism around startups, the startup scene and the startup ecosystem. The participants are creating a new and hopefully better world. Maybe that belief is needed when starting out, as the odds if success often is lower than anyone would want to admit.
But pretty much regardless of what a startup does, a startup is a story about transformation. The goal being that the startup itself should transform into something different. Values and mission hopefully stays the same, but everything else is bigger, better and different.
Or differently said: the goal of a startup is to not be a startup any longer.