Photo by Ibrahim Boran on Unsplash

2020 was a year like no other: “lockdowns” and the sudden, mass adoption of work-from-home upended the office as many knew it. For fortunate consumers, stimulus checks and more time at home bred new and unique spending. While 2021 has graciously ushered in vaccine distribution, Americans can still expect several more months of limited contact. The “New Normal” changed the landscape for Seed and Series-A companies significantly, and here are three trends I’m watching.

1. The Shift to “All Things Digital” Means Consumers Demand ROI for Their Time

Owing to the pandemic mantra of “Stay Home”, consumers able to do so experienced an upside: hours spent commuting to work were traded in for outdoor…

Or Why EBITDA should be the Northstar Metric for Startups (even if it’s negative)

Early 2020, Uber CEO Dara Khosrowshahi declared “The era of growth at all costs is over,” signifying a mentality shift towards profitability and an end of the company’s notorious habit of throwing money at problems.

Funny enough (or perhaps as expected), Uber hasn’t stuck by its new mantra: It posted a Q3 2020 net loss of $1.1B on $14.7B in gross receipts. That brings us to the topic of this article: in all likelihood, your company or your investments are not Uber. Uber and other mega-corps…

I was recently on The E-Commerce Business Podcast and was asked for my top advice to E-Commerce startups that plan to raise capital. My answer will always be: tell me the story of your company’s unit economics.

You draw the investor in with your team’s background, data on market opportunity, and the company and product vision. But the investor values predictable execution, and the best way to stoke her confidence in the investment is to clearly outline how you’ll make money, and when the company will increase in value. This allows her to conceptualize return on her investment.

Step 1…

Pandemic shutdowns across the globe drove one positive effect for e-commerce companies: a boom in consumer spending. People sheltered-at-home are choosing delivery for everything from daily necessities like groceries and personal items, to home improvement projects, house plants, and more.

Windfall e-commerce spending has peaked the interest of the bulge bracket, evidenced in recent funding and M&A activity:

  • Uber acquired on-demand delivery platform Postmates in a $2.65B all-stock deal. Postmates was valued at $2.4B in a September 2019 capital raise. Along with Uber Eats, the in-house competitor-turned-complement to Postmates, Uber now holds an impressive 37% of food delivery sales in…

We live in extraordinary times. In recent weeks, countless Americans shared outrage over the criminal killings of George Floyd, Breonna Taylor and others. The movement for real equality in the US has its most significant mainstream traction in recent memory, and the painful issues at the forefront are racial equality, police brutality, and a societal infrastructure designed to serve White Americans over all other groups.

As we progress into the long haul of “doing the work” towards a more equitable world, firms are looking beyond simple shows of support, to direct, measurable, and impactful action. …

An undeniable fact about investing: you need cash to do it. That means that startups searching for funding or venture capital need to focus on potential investors who have the intent and means to invest in the near term.

The cash on hand that funds and investors deploy into companies is commonly known as “dry powder”.

To build a good investor pipeline means identifying well-matched investors who have dry powder. Here’s some ways to gauge whether they do:

When did the investor close its most recent fund?

The typical institutional fund has a 10-year life cycle. This is the time…

Does “You’re too early” sound familiar?

A key component of a successful capital raise is a well-researched investor pipeline. That requires an understanding of the criteria investors use to evaluate a company and, more importantly, understanding “investor qualifiers,” which are characteristics that indicate an investor is a potential fit for your company.

Here are some of the most common investor qualifiers that founders overlook:

Pre-Revenue vs. Post-Revenue

You may be one of countless early-stage founders who have received investor feedback of “You’re too early.”

Such feedback is correct if you’re focused on the wrong investors. You need to speak with…

Who doesn’t love Shark Tank? But statistically very few early-stage investments are the result of a single pitch.

Most angel and seed investments are the result of a months-long process of diligent relationship management with a well-selected group of investors.

How is raising capital different than pitching?

It’s conversational.

After initial contact with an investor, you’ll be alternating between sending her updates and meeting via phone or in-person.

From this point, you wont use your original pitch with that investor (though you will continue to use your pitch deck for visual support). …

Most seed- and angel-stage founders consider two types of securities to receive investment:

  • the convertible note (and its siblings: SAFE, KISS, and other notes);
  • and equity-based investment, typically via preferred stock, AKA “priced round”.

A main difference between the two is the application of a valuation cap vs. a valuation.

A valuation cap is:

  • Used for convertible notes and other non-equity investments; round size is typically less than $2M.
  • An approximate amount (i.e. $4M), representing the value of the company at some point between issue and the time of the next priced round.
  • The estimated amount is the result of…

The novel coronavirus (COVID-19), and its sweeping personal, societal, and economic effects have plunged the globe into a new paradigm. Whether you’re an individual investor or a fund admin, you’ve likely spent the past few weeks settling in into the “new normal” while forecasting the effects of market movements on your portfolio.

This may be the first chance you’ve had to think specifically about each of your unique venture investments — and you wouldn’t be alone. …

Leah Madden

Founder at Greenprint. Growth Strategy + Financial Consulting for startups and venture investors.

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