RTC #13: Seed funding - where things get serious

Why today’s issue is valuable to you 💎

1. Headlines: 3 additional FREE investor lists, one year later and what are the lessons from Silicon Valley Bank, current startup valuations from Pre-Seed to Series A, most active VC investors in 2023, and more!

2. Today’s Deep Dive: Learn about specific criteria at the seed stage from today’s expert Laurenz (Co-Founder PUSH VC) covering the founder profile to stand out, an unconventional startup success metric to succeed, and the typical misconceptions between founder-investor

3. Check out a day in the life of a VC: You tell me but I found that this is funny 😂

Headlines 📢

• A year later, what are the lessons from Silicon Valley Bank’s epic collapse?

• You liked my investor lists! Here are 3 more (FREE) 💸💸💸

  • Corporate Venture Arms

  • European Family Offices' Founders

  • +100 best VC Funds in the UK

• Reddit may become a “meme stock” as Redditors can sell shares immediately

• Elon Musk / OpenAI (continued): Elon says xAI will open-source its chatbot rivaling ChatGPT, Grok, this week

• 5 charts on how female founders and VCs did in 2023

  

  % of European VC deal value in female-founded startups by region

• And: which gender-diverse and female-led ventures were raised in February?

• Private Equity firm KKR says that they beat Warren Buffet 1976-2023

• New fundraising cheatsheet for early-stage founders in 2024

• The most active VC investors in 2023

🤿 Deep Dive: Seed funding - where things get serious

Welcome to the “real world”: leaving the more conceptual, preliminary work - potentially also the fixed-job and now committing to full execution mode. 👨‍💻💪

It is the time of the first significant investment laying the foundation for your future success on the ‘Road-To-Capital’.

(Hopefully) you have developed an initial, solid MVP (Minimum Viable Product) but now you also see the first pivots kicking in. This phase is about validating the product beyond friends/family and your immediate network. (Remember technical and market risk from last week’s issue?).

Spoiler: there is more that impacts the investment decisions of VC funds at the seed stage

Yes, the status of the product and gaining comfort around market validation determine the framework for investment decisions at this stage.

BUT: let’s dive into the more specific investor-driven criteria that move the needle for an investment at this stage 💰💰💰

• Founder profile and less quantitative success metrics

• Deal sourcing practices and does “cold outreach” work?

• Misconceptions in founder-investor dynamics: what is it that is actually relevant for the investor (it is not the valuation 😮)?

• Current market conditions and what type of startups will get an investment in the future

Thank you Laurenz from PUSH VC for being with us - I could not imagine anyone better to share your views and insights on this topic with us. 🙏

👉 Curtain up for exclusive expert insights you don't find in any textbook

👉 Founder Profile and Unconventional Success Metrics

RTC: “From your perspective, what makes a founder stand out at the pre-seed or seed stage and what are the 1-2 things you look for the most when considering an investment?”

Laurenz: “Authenticity of the founder for the problem she/he is trying to solve is very important and also the level of ambition (what did she/he do in the past and what are the plans... should be something between craziness and realism).”

RTC: “Can you share an unconventional metric or signal that you've found indicative of an early-stage startup's potential for success?”

Laurenz: “Not an easy question :-) I believe that the level of ambition of founders often starts to show early on - I personally think that excellence in sports can be a good signal. You can practice infinitely and you are never perfect, you are used to competition and know that stamina pays off in the long run.”

👉 Deal Sourcing Methods and Misconceptions in Founder-Investor Dynamics

RTC: “How do you primarily discover promising pre-seed or seed startups, and how many of your investments came from a cold outreach to you?”

Laurenz: “It’s a team effort and we try to be active in almost all available acquisition channels (cold outreach, events, investor networking, LPs, portfolio, personal network, data-driven sourcing, ...). Cold outreach, probably a handful!”

RTC: “What are some common misconceptions that founders have about pre-seed/seed investors, and how do these perceptions differ from reality?”

Laurenz: "One misperception is maybe that valuation matters so much in the beginning rather than focusing on the right partners and winning valuable time to execute. Often goals are not ambitious enough for the next round, to justify a higher valuation you need to grow into.”

👉 Current Market Conditions and the Future of Early-Stage Investing

RTC: “What is your take on the current market conditions and what major trends/developments would you expect for the next years?”

Laurenz: "After the craziness of 2021/2022 VC funding parties and after Corona the industry is still in a risk-off/hangover mode. Asset allocations were redesigned with the interest rate environment changing and macro risks increasing. However, the right teams and topics always get fantastic financings. However, I strongly believe in the ongoing tech megatrends, which are independent of the financing environment. So many things need to be optimized or reinvented, especially in climate & health, the areas we are active.”

📖 Infographic of the week

A day in the life of a VC 🚀😂

📅 Calendar of main VC events in the upcoming weeks

👉 Networks and relationships are key: start building them

March
• SuperReturn Private Credit Europe | London, UK | March 11-12
• Skinnovation | Innsbruck, Austria | Mar 13-15
• Hello Tomorrow | Paris, France | Mar 18-22
• CEE VC Summit | Warsaw, Poland | Mar 19-20
• Think Big Norway | Oslo, Norway | Mar 20
• Insurtech Insights Europe | London, UK | Mar 20-21
• Investors’ Forum 2024 | Geneva, Switzerland | Mar 20-21
• Start Summit 2024 | St. Gallen, Switzerland | Mar 21-22
• GPC Conference | New York, US | Mar 25-27

April
• Venture West 2024 | San Francisco, US | Apr 3-4
• Energy Tech Summit | Bilbao, Spain | Apr 10-11
• 0100 Conference Europe 2024 | Amsterdam, The Netherlands | Apr 16-18
• TechChill | Riga, Latvia | Apr 17-19
• eMerge Americas | Miami, US | Apr 18-19
• Startup Grind Global Conference 2024 | San Francisco, US | Apr 23-24
• VC Platform- Global Summit ‘24 | New York, UK | Apr 24-26
• TechCrunch Early Stage 2024 | Boston, US | Apr 25

👉 Get the full list of events in 2024 here

This was it for today.

If you find Road-To-Capital valuable, pls share it with your friends 🙏

Our awesome mugs and legendary hoodies are waiting for you!

See you next Tuesday,
Stephan 👋

Issue #13 | 12 March 2024