HOW STARTUPS CAN MANAGE THEIR CASH BETTER
Flashpoint
Since 2012, we have been investing in U.S. and Western European tech companies originating from Europe and Israel
#1?HOW STARTUPS CAN MANAGE THEIR CASH BETTER
The bankruptcy of Silicon Valley Bank caused a great deal of stress for many startup founders. Although U.S. financial regulators intervened and took charge of customer deposits, the incident has shown that financial markets remain unstable. Amidst a banking panic, Signature Bank has suffered bankruptcy, while Credit Suisse is being acquired by its competitor UBS;?First Republic Bank's customers have recently withdrawn over $100 billion.
#2?THE OPEN-SOURCE AI BOOM IS BUILT ON BIG TECH'S HANDOUTS
?Greater access to the code behind generative models is fueling innovation. New open-source large language models—alternatives to Google’s Bard or OpenAI’s ChatGPT that researchers and app developers can study, build on, and modify—are dropping like candy from a pi?ata. These are smaller, cheaper versions of the best-in-class AI models created by the big firms that match them in performance—and they’re shared for free.
#3?FRANCE LOOKS TO THE UK FOR LESSONS ON BOOSTING BUSINESS ANGELS
As part of a relentless effort to turbocharge its startup ecosystem, the French government wants to triple the number of business angels backing early-stage startups. To pull this off, policymakers are looking for lessons from an unlikely source: the UK. French officials want to adopt versions of two UK programmes, which provide early-stage tax incentives and have been credited with?helping to make the UK Europe’s undisputed entrepreneurial leader.
#4 THE BIGGEST STARTUP IPOS ARE DOWN 2.5X
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It’s not surprising to see “big tech” outperform newer market entrants. After all, these are companies with long track records of enormous revenues and fat profits. Today, investors are much less interested in companies’ future potential and much more keen on present earnings. To regain market confidence, former?hot newcomers will need to show they’re capable of producing them.
#5?WHAT'S HAPPENING WITH SEED AND SERIES A FUNDING
When venture funding started to turn south after a blockbuster year in 2021, seed and early-stage funding was at first relatively unscathed. That’s no longer the case. Investment into seed startups globally actually grew in Q2 2022, even as venture investment overall dropped off dramatically.?Seed and angel investment to U.S. startups fell 45% year over year in the first quarter of 2023, to $3.1 billion,?Crunchbase data shows.?
If you enjoyed this newsletter,?forward it to a friend. If you are a startup with a founder from Europe or Israel looking for financing, whether it is Seed, Series A, or later,?submit your pitch deck!