Female Foundry Week 59: Tick, tock, options clock. Is debt right for you? Prioritising growth while fundraising. When will we get back to old valuations? Concentrated portfolio vs market index.
Welcome to The Week 59, 2023 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In The News
Bucharest-based deep-tech startup Veridion, co-founded by Sorina Vlascean, raises a $6m Seed round led by Underline Ventures, OTB Ventures and LAUNCHub; London-based Growyze, co-founded by Adi Hristova and Kati Hristova, picks a €735k Pre-Seed round from Syndicate Room and other angels to streamline stock control for the hospitality industry; Also London-based Cordless, co-founded by Luba Chudnovets and Irina Bednova picks a €2.1m Seed round led by Fly Ventures to transform customer support; Berlin-based Doctorly, co-founded by Anna von Stackelberg, bags a €9.4 Series A round led by Horizons Ventures and Well Health Technologies to optimise admin tasks for medical staff; Madrid-based StudentFinance, co-founded by Marta Palmeiro, raises a €39m Series A round led by Iberis Capital to democratise upskilling across Europe; Barcelona-based Qbeast, co-founded by Paola Pardo, bags a €2.5m Seed round led by Elaia to simplify data lakes; Munich-based SACLÀB, co-founded by Alexandra Stueck, picks a €1.6m Seed round led by Trind Ventures to build the new marketplace for preloved luxury collectables; London-based cybersecurity startup CyberSmart, co-founded by Mariella Rosa Al-Basha, raises a $15m Series B round led by Oxx.
Spotlight
Tick, tock, options clock.
Over the past few years, we experienced one of the fiercest battles for tech talent in history. With skyrocketing demand, many founders were quick to offer options to entice necessary talent. With two big waves of layoffs behind us, it was reported this week that the number of tech layoffs in the first two months of 2023 has already surpassed the total number of 2022 layoffs. At the same time as many hope for this surge in available tech talent to lead to a boost in startups formation, some late-stage companies are getting nervous on how to pay out their expiring employee options. Stripe announced this week, it would go public next year to solve the issue of 10-year stock units awarded to its veteran employees that are due to expire at the end of this year. With more companies staying private for longer, startups need to keep an eye, not only on their runway, but also on the options clock. Read full story ➯
Fundraising
Is raising debt a viable option for you?
This week I spoke with a founder who has been struggling to close her extension round since late January even though her revenues looked ‘okay’. Let’s talk about venture debt. Raising a mix of equity and debt has been becoming popular for startups looking to protect their equity position, but saying that, venture debt is not for everyone. Are you in doubt as to whether your company can repay the interest payments? Are you lacking momentum? Do you have a high burn rate? Are your revenues highly variable? Do you have less than six months of cash? Today, venture debt companies are spoiled with options; if any of the above is true, you are unlikely to be able to raise venture debt. At least not from credible sources. And not on good terms. Here is an overview of the debt fundraising process. See the list of some of the most credible venture debt players in Europe and read full story ➯
Community fundraising roundup: February.
Despite less than optimal fundraising conditions, female founders from the Female Foundry European community raised €92.4m in February!
Prioritise growth while fundraising.
This is a short note. Recently, I have seen many startups having their team’s all hands on deck fundraising. With longer due diligence processes (thanks FTX and a market downturn), even ‘the shortest’ fundraises are taking 30% longer. Now, unless you have multiple VCs fighting to get a spot on your cap table AND your optimised team can bust through their sales targets, leaving you free to run a fundraising process, please don’t forget that today your fundraising success is ultimately highly dependent on hard metrics - on your revenues and your growth trajectory. If you significantly compromise on the latter, you might not realise when your hot deal turns cold before closing.
Analysis
When will we get back to old valuations?
Gone is the era of lofty valuations. At the peak of 2021, some companies were valued at 100x revenues. Now, even la crème de la crème companies top their valuations at 15x. For many, it is a tough pill to swallow. The question is then, how long will it take for the startups that fundraised during some of the most idyllic years in venture building history to catch up with their previous valuations? Check this simulator to find out. You might find the results, just like me, .. eye-opening. Read full story ➯
Concentrated portfolio strategy vs market index approach.
VC fundraising dropped 65% Year-Over-Year in Q4 2022. With sluggish fundraising conditions, many venture capital funds have been adapting their fund strategies to lure picky investors. While few disagree on the basic principle that a portfolio's returns are determined by only a small fraction of its companies, opinions vastly differ regarding the lessons to take from the Power Law and its implications on portfolio construction. Is it better to index venture as broadly as possible in the hopes of unearthing those winning outliers? Or to concentrate resources on a smaller number of investments, so as to maximise returns from the winners? This recent analysis sheds some light on the factors at play. Read full story ➯
From the Community
ifgs x Female Foundry
Female Foundry is an official partner of the Innovate Finance Global Summit taking place on 17-18 of April in London. We offer a 20% discount on the first 10 tickets purchased with the Female Foundry promo code.
To get a 20% discount on all ticket types, respond to this newsletter.
Ticket draw: Alpha Wolves Summit | 8-9 of March 2023 | London
The complimentary ticket winner is: Nannette (6hf7d3). You can view the draw here. Congratulations! I will get in touch with you shortly.
Hiring
This week hiring:
Cordless ➯ Business Development Manager | Doctorly ➯ Sales Development Representative | SACLÀB ➯ Customer Service Manager
For more listings, check Female Foundry Job Board.
Founder & Investor Meetups
Tuesday, March 7, Paris ➯ Women in STEM and Entrepreneurship | Tuesday, March 7, Online ➯ Female Founder Pitch Lounge | Wednesday, March 8, London ➯ Women in Fintech and Finserv | Wednesday, March 8, Berlin ➯ Women Empowering Women | Thursday, March 9, Berlin ➯ Women in Tech | Friday, March 10, Berlin ➯ Ask Female Founders.
That’s all for this week. Have a restful weekend and see you next Saturday!
Agata
Written by Agata Leliwa Nowicka, an investor, a two-time entrepreneur, and a founder of Female Foundry based in London.
Suggestions? Drop me an email.
Check femalefoundry.co for more fundraising tools and investor content. View other Female Foundry articles.
♡
Thank you Eden, and Mariangela Cordella from Nauta Capital for sourcing our weekly meetups.