Venture Context - May 31

Hello, extraordinary readers, and a hearty welcome! ??

Before we dive into the exciting stuff, can we take a moment to appreciate May? ?? Did it treat you well? We sure hope so! Now, as we stand on the cusp of June, let's gear up for even more success in the month ahead! ??

Now, let's get into today's fascinating trivia: Did you know that Twitter was originally named "twttr," as a nod to Flickr and the American SMS short code? Even more intriguing is the fact that before settling on "Twitter," the name "Friendstalker" was on the table but quickly dismissed for its creepiness. ??

Here's a toast ?? to one of the most influential social media platforms, which could've been known as "Friendstalker"!

As we prepare to dive into the knowledge pool, tell me: What's your preferred companion drink while reading? Over here, I'm enjoying a refreshing cold brew coffee! ?

So, settle in, choose your favourite brew, and brace yourself for an enlightening reading journey. Enjoy your scroll! ????

Here's to a successful June ahead! ??????

Today's Top Startup News ???

?? Hyro scores $30M to boost its AI-driven, healthcare-centric conversational platform.

???? India initiates Electronics Repair Services Outsourcing (ERSO) pilot, aiming to be the global hub for electronics repair.

?? Cortex nets $35M Series B to advance its internal developer portal.

?? CUR8 , a UK-based climate startup, secures $6.5M from GV for its carbon removal market-making platform.

?? Amsterdam fintech Klearly steps into the Netherlands after bagging €2.1M from Antler, ex-Mollie CEO, and others.

?? Irish EV charge point operator, Weev , lands €57.9M from Octopus Investments.

?? Strive Health raises $166M in Series C funding to deliver comprehensive kidney care.

?? NomuPay , a spin-off from failed fintech Wirecard, announces a $53.6M raise for cross-border payments.

?? Taxfix , the $1B German accounting startup, cuts 120 jobs amidst funding woes.

?? Hostaway garners $175M to broaden its vacation rental management platform. PSG Equity is the sole investor in this round.

?? Vartana snags a $20M investment to scale its sales closing platform.

??? Social mapping platform Atly launches with $18M backing, aiming to be a Reddit for real-world locations.

Capital Catalyst ??

The Perfect Guide to Issuing Stock Options: Avoiding Mistakes and Boosting Efficiency ??

Navigating the world of stock options can be thrilling yet challenging! ?? Let's dive into a fail-safe guide inspired by our imaginative startup, "PlantPal". Learn from their journey and grow your business efficiently! ??#EmployeeStockOptions #BusinessGrowth

Navigating Stock Options: An Adventure Full of Possibilities and Hiccups

Picture this: You're the innovative startup "PlantPal," on a mission to foster a connection with nature through high-tech indoor gardens. You're looking to motivate your team and attract fresh talent, so you've decided to issue stock options to your employees. Much like nurturing a garden, issuing stock options requires careful consideration and perfect timing. If mishandled, minor errors can snowball into major issues, akin to overwatering your prized orchid.

Here's a closer look at some common missteps companies may encounter when issuing stock options and how you can sidestep them.

1. Timing: A Matter of Precision and Foresight ??

Just as planting seeds during the wrong season won't yield your desired results, timing is crucial when issuing stock options. Granting options after receiving an investor term sheet may force you to offer options at a higher exercise price, thus making them less appealing to employees. It's more strategic to issue stock options before getting a term sheet. In this way, your team can benefit from a lower exercise price, much like how plants thrive when planted at the right time.

2. Fair Market Valuation: Nurturing the Growth of Your Options ??

Fair Market Valuation is like the sunshine for your stock options—it's essential to maintain healthy growth. Ignoring this valuation is like leaving your plants in the dark. Over time, they will wither. This could lead to severe tax implications depending on your local jurisdiction. Regular updates of your fair market valuations—at least annually or following a significant transaction—ensure your options stay healthy and continue to grow.

3. Board Approval: The Sunshine for Your Options ??

Issuing options without the board's approval can cast a long shadow over your business plans. Just as sunlight is essential for plant growth, your stock options need the board's approval to flourish. If overlooked, you might end up having to reissue stock options at a higher exercise price. Maintain your options in the sunshine—have a process in place for board approvals, and you'll easily dodge this pitfall.

4. Different Stock Options: A Variety of Blooming Possibilities ??

All stock options are not created equal. Much like different plants in your garden, they each have unique benefits and implications. Grasping these differences is akin to understanding the diverse needs of your garden—it can greatly influence your company's growth and team satisfaction.

5. Vesting Schedules: Monitoring Your Options' Growth Phases ??

Understanding vesting schedules is as crucial as knowing your plant's growth stages. Failing to create a clear vesting schedule can lead to confusion and potentially harm retention. It's essential to implement a reliable tracking system to ensure everyone is on the same page.

Tools for Success: Your Essential Greenhouse Kit for Equity Management ??

By sidestepping these pitfalls, you'll ensure a smooth and efficient process of issuing stock options, much like maintaining a thriving indoor garden. Consider utilizing an equity management platform, similar to how you would use a greenhouse management system. This tool can help you stay compliant, maintain a clean cap table, and enable your employees to easily access their stock option information—keeping your equity garden flourishing.

So remember: Like caring for a thriving indoor garden, issuing stock options demands meticulous attention to detail. However, with the right strategies, you can devise a stock option plan that ensures compliance, motivates your team, and fosters retention. Cheers to fostering a blooming team, much like the one at PlantPal. Happy growing! ??

???Venture Misfires: The Other Side of Startup Success

The Rise and Fall of Houseparty ????????

If you surfed the social media wave during the COVID-19 pandemic, you might have ridden the Houseparty surfboard ?? ♀?. Like Zoom, Houseparty surfed its way to stardom during the pandemic. But unlike Zoom's smooth sailing, Houseparty wiped out, shutting down in October 2021. So, what turned Houseparty from a big kahuna to a wipeout? Let's dive into the gnarly details! ??? ♀???

Houseparty: The Cool Kid on the Block ????

Houseparty was like the epic video bash of social media platforms. Available on Android, iOS, as a Chrome extension, and on its own website, it was all about the fun side of video chat, not the business stuff.

Younger users loved features like crashing into video chats randomly and playing in-app games like Uno, Heads Up, and trivia. Also, for the gamer crowd, it allowed Fortnite gameplay streaming to buddies on the platform. ????

Thanks to this, Houseparty boomed during the pandemic, hitting 50 million downloads between April and March of 2020.

Houseparty's Shaky Journey ????? ♂?

Houseparty's roots trace back to Life On Air, a live video streaming platform. They first launched Yevvo, a social media app that never really caught on, then Meerkat, a live streaming app that blew up before Twitter cut it down. ????

After a rollercoaster ride with these apps, the co-founders pivoted to Houseparty. Despite initial growing pains, Houseparty was the life of the party, drawing more users and investors than its predecessors.

But, despite hitting 20 million downloads and adding paid game content, growth slowed and funding dwindled, leading to the sale of the app to Epic Games for $35 million in 2019. ????

The Party Ends...But Why? ????

Wave Goodbye to the Pandemic ????

The party vibes of Houseparty started to fade with the end of the pandemic. Unlike work-focused video apps, Houseparty lost its groove as users returned to face-to-face socializing. This declining interest was likely a big factor in the app's closure.

Cash Crunch ????

Funding, or the lack of it, was another issue. Epic Games probably didn't see the value in pumping more money into reviving Houseparty post-pandemic. Instead, they decided to roll its technology into other Epic Games ventures.

Epic Games: New Adventures Ahead ????

According to The Guardian, the Houseparty team was set to work on "creating new ways to have meaningful and authentic social interactions at metaverse scale across the Epic Games family.” It was clear that Epic's focus was shifting towards a grander vision, the Epic Games "metaverse".

Houseparty: The Afterparty? ?????

As of now, Epic Games has not announced plans to reboot Houseparty. It looks like Houseparty has left the building for good. But who knows? The party vibes may rise again in some new form within the Epic metaverse! Only time will tell! ????? ♀?

Lessons for Founders:

Lesson 1: Market Fit is Crucial ??

Houseparty was designed for casual, social interactions, not professional meetings. When lockdowns lifted and people began meeting face-to-face again, the need for such an app diminished drastically. So, ensure your product meets long-term market needs, not just temporary trends or situations.

Lesson 2: Keep the Cash Flowing ??

Houseparty experienced severe funding issues that led to its eventual sale to Epic Games. Startups must ensure a stable cash flow to support continuous growth. This could mean effective monetization strategies or securing more rounds of funding.

Lesson 3: Pivoting Can be Profitable ??

Houseparty was the third product from its creators, showing that it's okay to pivot and try something new if the initial idea doesn't work out. Successful pivots can lead to new opportunities and even significant growth.

Lesson 4: Strategic Acquisitions can Alter Paths ??

When Epic Games acquired Houseparty, they had plans to incorporate its technology into their products, which eventually led to Houseparty's shutdown. Acquisitions can drastically change a company's path, so it's vital to consider how these changes align with long-term visions.

???Rocket Fuel - Growth Hacks

Growth Hacking 101: The Power of Free Consultations and Assessments ??????

Hey, Founders! Looking for ways to maximize your business growth? Here's a strategy that will rocket ?? your customer base to the next level: offering free consultations or assessments to potential customers.

?? Freebies: Consultations and Assessments ??????

Free consultations or assessments are like honey for bees ??. It’s a growth hacking strategy that's been successful for decades, and it's time to optimize it for the digital age.

?? Real Life Examples

1. Evernote: The genius behind Evernote's growth was offering a free basic plan. This teaser for potential users resulted in a wave of paid premium subscriptions. ??????
2. Hubspot: Their free marketing grader tool ???? provided an evaluation of the effectiveness of your website, social media, mobile capabilities, blogging efforts, and more. This lead to significant user growth and upselling opportunities.
3. Canva: Free graphics, anyone? ?? Canva's free design tool showed potential customers how effortless creating professional designs could be, leading to many opting for their premium plans.

?? Step-By-Step Instructions

Step 1: Identify Your Ideal Customer ????

Understand your target audience. Create a detailed profile of your ideal customer including demographics, needs, pain points, and online presence.

Step 2: Create an Irresistible Offer ????

What type of consultation or assessment will you provide? Ensure it's valuable and relevant to your target audience.

Step 3: Promote! ????

Spread the word about your free offer through social media, your website, email marketing – basically, all channels at your disposal.

Step 4: Deliver Real Value ????

Focus on delivering actionable value during the consultation or assessment. Showcase the additional benefits of becoming a paying customer.

Step 5: Follow Up ????

After delivering your free consultation or assessment, ensure to follow up. This can be via an automated email sequence, a sales call, or any other effective method.

?? Tools and Apps to Assist

Calendly or Acuity Scheduling are great for scheduling free consultations. They help avoid the usual back-and-forth about availability, saving you and your prospects precious time. ???

Zoom or Microsoft Teams are reliable for video consultations. Both are user-friendly for one-on-one or group sessions. ????

Typeform or SurveyMonkey are perfect for creating engaging online assessments. They make data collection, response analysis, and personalized results delivery a breeze. ????

Mailchimp or HubSpot for follow-ups and nurturing leads. Automate your email sequences to ensure consistent and timely communication. ????

Key Takeaways ??????

1. Free consultations or assessments are powerful lead magnets. They allow you to demonstrate value upfront, attract new customers, and nurture potential leads.
2. Knowing your target customer is essential. Understanding their needs and pain points will help you create a consultation or assessment that truly resonates.
3. Follow-ups are crucial. After delivering your free consultation or assessment, a well-timed follow-up can help convert those leads into paying customers.

Let's embark on this growth hacking journey. Remember, it's not just about quick fixes, but sustainable growth. So, take these tips, get out there, and let us know about your success. ???? ♀????? ♂?????

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— Joseph Abraham