Hey, Insider! Want to be featured in next week’s newsletter? Answer our weekly question: What does your startup need help with most? Share your response here. | |  Karan | |
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What the numbers say: A recent TechCrunch article recommends that founders take a salary instead of just "working for equity." Startup founder's and CEO salaries can often range from 'none at all' to minimum wages to a certain percentage of the profits. Kruze Consulting estimated earlier this year that startup CEOs paid themselves an average salary of $148,000 at the beginning of 2023. Relevance: Kruze surveyed over 250 startups, which showed that startup CEOs received $150,000 compensation on average in 2022. CEOs at early-stage startups that had raised over $10M in funding were paid $199,000 on average, while startups that raised less than $2M were paid $106,000 on average. Series B stage CEOs were paid between $250,000 and $260,000 on average. In 2022, male CEOs received a $153,000 salary on average, whereas female CEOs earned $133,000. Why it matters: The TechCrunch report adds that the point of raising outside capital is to reduce founders' risk in the firm. By not taking a salary, founders' and CEOs' personal financial issues, such as mortgage payments and rent, may affect their ability to focus on their jobs. Additionally, in venture-backed companies, the founder gives up equity to investors and should be compensated with a salary. If needed, founders and CEOs can link their salaries to performance metrics, such as ARR, to ensure that they earn their pay proportionately to the company's performance.
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Hardware manufacturer Oura announced it is partnering with Best Buy to sell its smart ring product in 850 stores. "Brick-and-mortar retail is a natural next step for Oura and marks a pivotal moment for the business as we continue to expand into the mainstream," said Tom Hale, who joined as the startup's CEO with the mission to scale. More: - Oura's Best Buy deal adds to its current presence in Gucci and Therabody stores and SoftBank retail sites in Japan.
- Beyond hardware sales, the company uses a subscription model for extra features.
- The startup's product measures workout heart rate, blood oxygen levels, and recovery time, among other features.
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SMS engagement company Community announced it raised $25M with participation from Salesforce Ventures, HubSpot, and Verizon, among others. The startup plans to use the funds to "expand operations and business reach." More: - The startup's clients include the New York Knicks, Utah Jazz, Golden State Warriors, and the PGA Tour. Community claims its SMS management leads to 2x ticket sales and 10x more engagement than social media and email.
- The company was founded by Guy Oseary, Ashton Kutcher, and Josh Rosenheck in 2019 and has raised a total of $65.2M since its inception.
- Community previously raised a $40M round in Apr. 2021 with participation from Twilio and Live Nation Entertainment, among others.
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SaaS construction procurement platform Constrafor opted to raise funding through SAFE notes rather than a priced equity round as the market is not "great today in terms of pricing." CEO Anwar Ghauche raised $7.5M via SAFE note funding after witnessing "deterioration in the multiples for fintech companies." More: - Ghauche said the firm expects to achieve between $5M to $10M in annual recurring revenue (ARR) before going for a Series A round.
- Constrafor will use the fresh funds for payroll and operations.
- Additionally, the incoming funds will enable the firm to get its EarlyPay program rated and open up its API to general contractor customers.
- Motive Partners led the current round with participation from Fifth Wall, FinTech Collective, Commerce Ventures, FJ Labs, and others.
- In addition, the firm availed an undisclosed credit facility from Apollo.
- Constrafor has 23,000 customers and is growing 25% MoM this year.
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Berlin-based corporate mobility management company Rydes announced a €3.5M Seed round ($3.85M). The startup's platform enables paying in advance rather than submitting for mobility expenses coverage. More: - Rydes plans to use the funds to expand throughout Europe and the U.S.
- "Across Europe, governments are taking steps to promote multi-modal mobility and incentivize its use, including providing subsidies for both employees and employers to utilize rail and public transport," said Jessica Robinson, Partner at Assembly Ventures, which led the round along with Rethink Ventures.
- Other participants in the round included Lufthansa Group, Porsche Digital's Forward31, and Arabella Venture Capital.
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Swytch Technology, an e-bike conversion kit startup, leveraged crowdshopping strategy to scale the company without any VC funding. The firm started with a crowdfunding campaign in 2017 on the Indiegogo platform before pivoting to a crowdshopping strategy, which allows potential users to pay a deposit for a product to be delivered at a future date. The British startup has shipped 70,000 units globally, with an additional 1.5 million customers on its waitlist. More: - Swytch makes an e-bike conversion kit that provides 10 miles of range on one hour of recharge time.
- The crowdshopping strategy enables the firm to start manufacturing the product based on demand, thereby eliminating the need to hold too much inventory.
- CEO Oliver Montague said the strategy helped the firm avoid crowdfunding and VC funding pitfalls.
- The firm intends to unlock the next level of growth through partnerships and new product offerings.
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Last week, we asked our startups community, "Are you team build in public or build in private, and why?" Here are some highlighted responses we received: - Ayhan Ergezen (p/LivelyPencil), Founder at LivelyPencil, answered, "So far, I've always tried to build in public. I got some criticism about it. I got a lot of warnings from people who said their business idea could be stolen. I didn't care, and I even thought to myself that I wish someone would steal the project and show that it could be done. 😂" He continued, "I'm not worried about the risk of the project being stolen. Because projects are bidirectional. The first is the technical details, the second is the vision it has."
- James Spurway (p/james-spurway), Co-Founder at Indochina Consulting, answered, "I say it depends. If you are a solo founder and want to attract other founders but don't have any good prospects in your existing network, then harnessing the power of technology and social media to share your vision, mission, values, etc., and report on your progress, is a great way to potentially find like-minded people with the requisite skills to be that co-founder. The flip side is that if you are great at what you do but find all of the public-facing stuff energy-sapping, and time-consuming, this build in public approach will slow you down." I encourage you to read his full insightful comment here.
Join the conversations at Inside.com, and we may shout out your name and business or contact you for more! ⭐️
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- Fusion energy startup Avalanche Energy closed its Lowercarbon Capital-led Series A funding round with $40M capital.
- VC funding dipped by 17% and 13% in Colorado and Denver, respectively, in Q1 2023, less than half the national average of 35%.
- Climate-focused startup GreenSwans held the commercial product launch of its ballast water discharge treatment product. The startup is planning to raise a $4M seed round by the end of this year.
- Life sciences software startup Benchling laid off 74 employees or 9% of its workforce.
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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. | |
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