Public markets may have cooled in fintechs in recent months, but for entrepreneurs still thinking about getting started, “the outlook is good,” says the Magic 8 Ball.
By 2021, a third of all unicorns created were fintech companies: investor FOMO, increased use of digital payments, BNPL and other financial services created a gravitational field that attracted more than one in five dollars invested last year.
But that data is available anywhere. What founders really want to know is: what investors are looking for now?
To find out, fintech reporter Mary Ann Azevedo reached out to several active fintech investors to hear their thoughts on the state of the market in Q1 2022.
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“Each interviewee was kind enough to let us know how they wanted to be introduced, and for a smile, one of them shared an example of a cold email that worked,” she writes.
See who we searched for:
- Anish Acharya, General Partner, a16z
- Christina Melas-Kyriazi, partner, Bain Capital Ventures
- Ethan Choi, partner, Accel
- Pete Flint, General Partner, NFX
- Munish Varma, Managing Partner, SoftBank Investment Advisers
- Nigel Morris, Managing Partner, QED Investors
- Tyler Griffin, co-founder and managing partner of Financial Venture Studio
- Nikhil Sachdev, Managing Director, Insight Partners
- Mark Fiorentino, partner, Index Ventures
- Sheel Mohnot, General Partner, Better Tomorrow Ventures
“Cryptocurrency has come up more than once, and Latin America is hot, hot, hot when it comes to investor interest,” she found.
The survey includes a lot of valuable information for other investors, but we’ve gathered this primarily to help fintech entrepreneurs and founders, so if you’re thinking about getting started in this industry or know someone who is, please read and share.
We will be off Monday, February 21st, in celebration of President’s Day in the USA. Thank you so much for reading Ploonge+ and have a great weekend.
Senior Editor, Ploonge+
3 keys that unlock data-driven fundraising
It’s an opportune time to launch a new company, but rising interest rates, inflation and any number of other unknown factors can make investors more judicious when placing bets.
But data-driven founders who can tell a sweet story with the right metrics are much more likely to grab an investor’s attention, according to Blair Silverberg, co-founder and CEO of Hum Capital.
“Unfortunately, many companies don’t have an efficient way to collect, synthesize and interpret data into insights in real time, resulting in default reliance on Excel-based static samples that may not capture the full picture of your company’s potential,” he says.
Have venture capitalists underestimated startups for decades?
Here’s something people in tech don’t like to talk about: There’s not a lot of institutional memory in this industry.
For example, many founders who closed funding rounds in the past year believe that when it rains, it rains – but this was not always the case.
In fact, early-stage startups are raising capital at a higher level and valuations today than their late-stage counterparts a decade ago.
But were these older startups undervalued, or were market dynamics dictating their prices?
After taking a deep dive into the new PitchBook data, Alex Wilhelm reports that it could be a mix of both:
“It appears that more competition has helped unlock a fairer market price – yes, yes, irony – and that startups are now getting their dollar’s worth sooner.”
Turn novice investors into growth marketers without them noticing
Could your startup use more marketing support?
Most companies will put off a full-time growth hire for as long as possible, relying on a PR firm to bolster their public presence, but that leaves one critical resource untapped: investors.
According to Miles Jennings, founder and COO of Recruiter.com, investors will be happy to amplify your messages, but only if you make them shareable and engaging.
In an article for TC+, Jennings shares six tips that can help turn investors into advocates who will serve as an extension of your marketing team.
Airbnb’s pandemic slingshot is close to completion
The pandemic has been especially difficult for travel and hospitality companies, and for Airbnb it has been near catastrophic.
But the company has since rebounded due to a resurgence in demand for hospitality and tourism and a series of favorable changes to its lodging policies, to the point of being “hundreds of millions of dollars in fourth-quarter revenue higher than in 2019, when it posted $1.11 billion in total revenue,” writes Alex Wilhelm.
Why startups might want to lease hardware instead of buying it
The future of work is still being written, but in the meantime, every startup still has to set aside money to get laptops, monitors, and things employees can sit on.
In the two years since the pandemic began to scatter office workers, many companies are now leasing crucial hardware with a focus on flexibility, optimizing tax deductions and scalability, reports Anna Heim.
In a well-researched post, she looks at the advantages and disadvantages of leasing hardware, along with the tax implications for companies based in Europe and the United States.
How to increase organic traffic with earned media
Few entrepreneurs are born storytellers, and it is perhaps unfair to expect them to do better.
Many startups are paying a PR agency a monthly retainer of $10,000 or more, but your chances of getting a story about your company aren’t much better than spinning a roulette wheel.
According to Amanda Milligan, Head of Marketing at Stacker Studio, startups can increase organic traffic and improve SEO by developing compelling content that will be picked up and shared by the media.
In a classic TC+ tutorial, she explains how to create earned media that organically increases keyword rankings, referring domains, clicks, and other important SEO metrics.
Dear Sophie: Should we pursue a K-1 visa or a marriage-based green card?
I am an American citizen who has been temporarily living and working in Germany for one year.
I got engaged last month to my amazing partner – a German citizen – but now I need to go back to the US in a few months to work.
Should I get a K-1 visa for my fiancee so she can come with me when I return to the US, or should we get married and live separately until she can get a green card and join me in the US?
— Looking for a quick fix
How to find a job as a scout for a venture capital firm
It’s not a lie: some venture capitalists are as rich as Croesus and get richer and richer.
Many are former founders, but still: Becoming a VC isn’t easy without the right connections and experience. Without a successful exit or Stanford network, one way in is by working as a scout who provides deals.
Versatile VC founder David Teten and associate Akshat Dixit explain what it means to be a scout, the earning potential of the role, the process for finding a job, and what questions to ask if you find yourself in an interview.
Additionally, the authors have compiled a long list of venture capital firms that offer recognition programs: Happy Hunt.
Why You Shouldn’t Ignore Europe’s Deep Tech Boom
While deep technology has laid the foundation for many mainstream and enterprise applications, investment in this area has largely been limited to companies specializing in VC.
The space, however, is making a resurgence, and European VCs appear to be doubling down on the belief that deep tech startups will reap generous returns, Anna Heim and Alex Wilhelm wrote.
For The Exchange, they analyzed Angular Ventures’ report on venture capital investment in companies and deep technology in Europe and Israel, which revealed “that capital is flowing into the right areas for a European deep technology nexus, or cluster of nexuses, to form”.
Itai Damti, from Unit, explains how the company raises funds with culture and value
Culture is an aspect that many founders like to talk about, but few have a concrete plan or vision for how to cultivate the environment they want.
For Itai Damti, from Unit, culture is so important that he and co-founder Doron Somech prepared a document that the company uses to communicate its values and expectations to employees.
Emmalyn Shaw, managing partner of Flourish Ventures, said it was a key factor in her decision to support the company: “In my 20+ years, I have never seen a document like this.”
In the latest edition of Ploonge Live, Damti and Shaw discussed Unit’s pitch deck, its unconventional format that puts their expertise above the product, and how the deck helped them successfully raise funds.