WHY STARTUPS SHOULD EMBRACE RADICAL TRANSPARENCY
Flashpoint
Since 2012, we have been investing in U.S. and Western European tech companies originating from Europe and Israel
#1?WHY STARTUPS SHOULD EMBRACE RADICAL TRANSPARENCY
Accountability is an important part of a startup’s maturation process. How else can employees, customers, and partners trust a startup to deliver on their promises? The most talented employees want to work for startups and leaders that they can trust, and transparency in all communications and all-hands meetings are a critical component of building and maintaining that trust. Partners want to collaborate with?startups that actually do what they say they will do.
#2?TECH'S REALITY CHECK: HOW THE INDUSTRY LOST $7.4 TRILLION
Not one of the 15 most valuable U.S. tech companies has generated positive returns in 2021. Microsoft has shed roughly $700 billion in market cap. Meta’s market cap has contracted by over 70% from its highs, wiping out over $600 billion in value this year. In total, investors have lost roughly $7.4 trillion, based on the 12-month drop in the Nasdaq. Companies across the industry are cutting costs, freezing new hires,?and laying off staff.
#3?CAN MY CONVERTIBLE CAP BE A SIGNAL TO THE NEXT ROUND'S VALUATION?
On one hand, the higher cap could be played as a good negotiating card vs VCs to push the price, especially if the convertible was mostly provided by outside investors. On the other hand, incoming next-round investors would still look at company performance regardless of caps or other pricing indicators. Try making your round competitive, by going out to more relevant investors, hence past caps would be less relevant.?Watch the full video.
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#4?ANGEL INVESTING: A BETTER WAY TO INVEST IN STARTUPS
Maybe you’ve heard the term angel investor in your circle or line of business, and you’ve often wondered what it is. In recent years, angel investing has become an increasingly popular way for individuals to invest in startups. An angel investor is typically a high-net-worth individual who provides capital to a startup in exchange for equity. While angel investing can be a riskier proposition than traditional forms,?it can offer a higher potential return.
#5?HOW TO PLAN FOR A REPUTATION CRISIS?
Most founders think the roles of communications and press relations in the early stages of a startup revolve around scoring quirky headlines that put founders and their teams in the limelight. The issue with this vacuum mindset is that it disregards the external forces — beyond anyone in the company’s control — that can destabilise a company. This leads to teams feeling blindsided by?reputational crises that seemingly arise out of the blue.
If you enjoyed this newsletter,?forward it to a friend. If you are a startup with a founder from Central or Eastern Europe or Israel looking for financing, whether it is Seed, Series A or later,?submit your pitch deck.
Managing Director at GlobalStart | AI & Innovation Expert | Strategic Advisor | Growth Mentor | Data Scientist | LinkedIn Influencer
2 年Indeed! In the business world, start-ups are often lauded for their creativity, innovation, and risk-taking. But there's one area where start-ups could learn a thing or two from more established businesses: transparency. When stakeholders know what's going on behind the scenes, they're more likely to trust the company and its leadership.