Female Foundry Week 42: Corporate VCs keep writing checks. Why VCs care about burn multiple. Dilution Simulator. Where are Web3 users coming from?
Welcome to The Week 42, 2022 Edition of the Female Foundry weekly newsletter!
Female Foundry - where female investors and founders meet.
In The News
Aqemia, a Paris-based deep tech startup, co-founded by Emmanuelle Martiano Rolland scoops €30 million in a Series A funding round led by Eurazeo and Bpifrance; Digital speech therapy platform Noala, co-founded by Emilie Spire and based in London, fetches £3.5m seed funding from Local Globe.
European SaaS VC funding drops 42% in Q3 as the appetite for early-stage investments weakens, Accel reports. Read full story ➯
Spotlight
Corporate VCs keep writing checks.
Despite investment slowdown across most of the investment classes, corporate venture firms are staying the course on startup investing. According to PitchBook, CVCs have been involved in 2,275 deals, collectively valued at $81.5bn, this year through Q3. While this year isn’t on track to match 2021’s record CVC participation in terms of capital invested ($151.6bn), the percentage of deals that include a corporate investor is at a record high so far in 2022. More than 25.6% of U.S. venture deals this year included a corporate backer. Read the report ➯
Struggling to do deals in a downturn, tech acquirers cut spending in half.
The ongoing concerns about a possible economic recession have managed to solidify a conservative position of key tech acquirers resulting in slowing expansion and laying off employees, and cutting M&A costs. According to S&P report, tech acquirers cut spending on deals across the world to only about half the amount they had doled out in any quarter since emerging from the sharp contraction due to the COVID-19 outbreak. Brenon Daly from S&P Global analyses the trend. Read full story ➯
Fundraising
What is burn multiple and why VCs care about it right now.
The burn multiple is a catch-all metric for growth, especially in a market downturn. Popularised ➯ by David Sacks, the general partner of Craft Ventures, the burn multiple evaluates the burn rate of a startup as a multiple of its revenue growth. The higher the burn multiple, the more the startup is burning to achieve each unit of growth. In the current fundraising climate, understanding your burn multiple will help you find opportunities to extend your runway by putting your cash only where it delivers the highest growth. Read full story ➯
Planning for future dilution as a founder. Dilution Simulator.
Valuation and dilution are two intricately linked fundamental truths that all founders need to be aware of. Since your startup valuation will determine your dilution down the line, the universal goal for any founder is to maximise valuation while minimising dilution. If you raise too much, you could give away an unduly large portion of your company. If you raise too little, you risk running out of cash before you achieve the milestones needed to go back to investors again. In general, early money is the most expensive money you’ll take. Make sure it doesn’t come with too many strings attached. In this recent article, Brett Calhoun shares the basic principles. Read full story ➯
I would also recommend this calculator for a quick check, however, building a dilution simulator from scratch might provide more useful insights.
Analysis
Where are Web3 users coming from currently?
In the world of internet monetisation it doesn’t matter who clicks and where, it is who counts those clicks that matters. The technology and business of counting clicks (and everything else you do online besides) that determines the fate of trillion-dollar companies is called attribution. So how significant is it? In February, Meta (Facebook) lost a quarter of its value (!) and projected a $10 billion-dollar hole in this year’s revenues after it admitted that Apple’s ads tracking has been making it hard for them to serve ads. Read this news here ➯ The Web3 industry is yet to develop its own way of attribution. If companies want users to engage in their platforms, then they’ll need attribution software, crypto-native or not that measures the entire sales funnel, Discord posts, Reddit forums, ad impressions, and other blue links that help people navigate the internet. Interestingly, one Web3 company aims to tackle that. Read full story ➯
From the Community
Web Summit ticket giveaway. We’ve got a winner!
Web Summit 2022 has officially sold out, but we have a lucky winner who will join me and over 70,000 other tech enthusiasts and builders from over 160 countries in Lisbon in 10 days’ time.
Thank you for all the submissions. The lucky winner is xkW1Yg.
See the draw here.
Hiring
Check Female Foundry Job Board, and join female-founded startups.
GoHenry ➯ Data Analyst | FrontDoor Labs ➯ Founding Full-Stack Engineer | Sequence ➯ Support Assistant
Find more female-founded startup jobs here.
That’s all for this week! 👋 See you next Saturday! Have a great weekend.
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Agata
Written by Agata Nowicka, a founder of Female Foundry, a serial entrepreneur, and an investor based in London.
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