British pre-seed investor Concept Ventures' principal Oliver Kicks advises startup founders to use the pre-seed funding to understand the core areas of their business. He recommends the founders should deploy the capital raised during this round into hypothesis testing, building the core team, producing a minimum viable product (MVP), attaining a product-market fit (PMF), and accelerating R&D. Kicks recommends that founders raise more capital than required, taking into consideration a buffer amount, because "in most scenarios, founders will fail to reach the fabled PMF at first attempt." More: - Dr. Marcus Erken, the co-founder of VC firm Sunfish Partners, recommends that founders should, by this stage, have a very clear idea about the "why" behind starting in the company, the problem they expect to solve, and the potential hurdles expected in the future.
- Marta Lacka, CEO and co-founder of Quantia, expects to allocate 50% of the pre-seed capital to developing the MVP, with the remaining 20% to 30% earmarked for operations and marketing.
- Per Sifted, startups raise between $100,000 to $1M in pre-seed rounds at an average valuation ranging from $500,000 to $5M.
- At the pre-seed stage, investors are investing in the company based on the founder's potential in understanding the needs of customers, building a team, and understanding the market, says Erken.
- Erken adds that startups should raise sufficient funding for 18-24 months of cash runway.
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Circle, the issuer of the USDC stablecoin, revealed its plans to increase its employee count by 15% to 25%. The news comes amid layoffs in the cryptocurrency space, which accounts for 41% of all layoffs in 2023. More: - In December, Circle canceled its SPAC merger with Concord Acquisition, which originally had a preliminary valuation of $4.5B and was later estimated to have risen to $9B.
- The company had ~900 employees by the end of 2022, having doubled from the previous year.
- USDC has a ~$42B market capitalization, the second-largest stablecoin behind Tether with ~$70B.
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Slync, a supply chain software startup, raised $24M through a combination of equity and debt as it seeks to move on from its former CEO, Christopher Kirchner. The Department of Justice and the Securities and Exchange Commission charged the founder for using $20M in company funds on a private jet, golf tournaments, a luxury suite, and failed bids for English soccer teams. More: - In June 2022, reports surfaced that Slync employees had not been paid since May 10.
- The startup also owed "thousands of dollars" to multiple vendors.
- "Slync is cooperating with the government in its investigations and, as a victim of Christopher Kirchner's actions, looks forward to a just resolution of this matter," said the startup's chief marketing officer Greg Kefer.
- The new round was led by recurring investor Goldman Sachs, with participation from Blumberg Capital, among others.
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The U.S. Department of Treasury approved $339M worth of funding under the State Small Business Credit Initiative (SSBCI) for five states, namely Arkansas, Guam, Rhode Island, the U.S. Virgin Islands, and Wisconsin. The latest funding deployment brings the total sum allocated under the SSBCI initiative to $6.6B. More: - The allocation for the five states is as follows:
- Arkansas is set to receive $81.6M. The amount will be invested in businesses via a capital access program, a loan participation program ($7.5M), a loan guarantee program ($15M), and venture capital programs ($46M).
- Guam was allocated $58.6M for its loan guarantee ($36M), collateral support ($12M), and venture capital program ($10M).
- Rhode Island will get $61.7M for its capital access program ($27M), loan participation program, and venture capital programs ($31.5M).
- U.S. Virgin Islands is slated to get $57.5M, of which $22.9M will be set aside for a loan guarantee program.
- Wisconsin is set to receive $79.1M, of which it will invest $25M into two venture capital funds each, $6M for the loan participation program and $15M for the credit support program.
Zoom out: - The SSBCI program was reauthorized and expanded as part of the American Rescue Plan Act, with the treasury committing $10B towards the initiative.
- $2.5B of the funding is earmarked for supporting businesses led by members of underserved communities.
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Source.ag, a startup that helps commercial greenhouses optimize their yield via AI models, raised a $23M Series A. The company plans to use the funds to continue developing its SourceTrack software and R&D. More: - Source claims the optimal conditions could generate 15x more yield for commercial growers.
- The startup's AI recommends strategies based on simulating the balance between plant growth and resource usage.
- The round was led by recurring investor Astanor Ventures, with participation from Acre Venture Partners.
- Previous investors include the E14 Fund, Agro Care, and the Honest House Cooperative.
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Nova, previously known as Polar Mobile, announced a restructuring of its C-suite personnel, with president Matt Crenshaw assuming the post of CEO. Meanwhile, incumbent CEO and founder Kunal Gupta will transition into a board member and advisory role. Gupta stepped aside to focus on "longer-term strategic initiatives," per his LinkedIn post. More: - Andres Morón and Leah Malone joined the C-suite ranks, taking up the positions of CFO and CRO, respectively.
- The advertising tech startup continues to grow at an accelerated pace, assured Gupta.
- Gupta believes Crenshaw's promotion to the CEO role will help Nova unlock "the next chapter of growth."
- Crenshaw joined Nova as a chief commercial officer in 2021, after which he was promoted to president in Jul. 2022.
- Nova has raised $14M from Gregorian and a group of angel investors.
- In addition, it raised an undisclosed sum from private equity firm Fort Point Capital.
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- Sources informed TechCrunch that Indian edtech company Byju's is considering shutting down WhiteHat Jr, a coding platform purchased two years ago for $300M, as it charts a course toward profitability.
- Education services and online academic institution company Perdoceo acquired the software engineering courses platform Coding Dojo for $52.8M. The deal includes an additional payment of $15M, subject to meeting certain financial metrics.
- Locomation, a startup working on autonomous truck relay convoys, is reportedly shutting down operations after it failed to raise additional funding from investors.
- Vara Safety eyes profitability in 2023 after ironing out supply chain challenges that the firm faced since early-2022. The company is on track to nab $2M in revenue this year.
- NFT gaming startup Immutable has laid off 11% of its staff, or 32 employees. This is the firm's second round of layoffs. It let go of 20 employees in July last year.
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 |  | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.
Nicolas is a Sr. Analyst at Inside, covering startups and transportation trends. He is an avid map maker and data nerd. Nicolas has worked in the shared-scooter space, as well as advised e-bike and moped start-ups. | | | | Editor | Vibha Chapparike is a Freelance Writer & Editor at Inside.com. With her post-graduation in Management and Finance completed, Vibha is expanding her knowledge in venture capital, business, startups, and technology. She has had a career in public relations and communications. An ardent reader and writer currently residing in Singapore, you can follow Vibha on Twitter @VChapparike. | |
