Not Just for Kids

The popular narrative of startups being founded by young people is pervasive in Silicon Valley, but experienced founders often have an advantage. Life skills that come with age, such as having kids, can make one a better manager and more resilient and patient. Experience is also important for building a personal network, which is crucial for finding solvable problems and selling products.

A survey conducted by Start-Up Nation Central has revealed that 68% of Israeli startups have taken active steps to pull money and shift parts of their businesses outside of the country due to the uncertainty created around the proposed judicial overhaul.

Mixed Gender Founding Teams 

Mixed-gender founding teams have raised $24.1 billion in 2023, which is expected to be the second-highest total ever. This 28.1% of capital raised is a significant increase from the 16.9% of capital raised in H1 2022. However, all-women founding teams have raised only $1.4 billion in the first half of 2023, which is significantly lower than the $3.1 billion raised in the first half of 2022. This demonstrates that the presence of a man on the founding team is still a major factor in raising capital.

Now as much as ever, the startup world is in a state of flux. Here's a look at some of the biggest stories in recent days.

The startup world is in a state of flux, with a number of changes taking place that could have a major impact on the industry. From down rounds to new venture capital investments, the startup landscape is constantly evolving. Here are the latest news and trends in the startup world that entrepreneurs should be aware of. Stripe, a San Francisco-based financial tech firm, recently lowered its valuation to $50 billion from $95 billion in order to raise money, a move known as a down round. This is a common trend among tech startups in the Bay Area and across the country, as the economic market has made it difficult for them to pursue an initial public offering. Other startups, such as Instacart, Klarna, Oda, Snyk, Dataiku, and Tonal, have also had to resort to down rounds in order to raise capital. VCs have identified a number of promising healthtech startups for 2023, including those innovating in AI, mental health, and cancer research. Despite a decrease in venture-capital investment in the first half of the year, these startups have managed to stand out and attract attention from investors. Insider asked VCs to name the most promising healthtech startups of 2023, including firms they had invested in and those they had not. Five partners at Sequoia Capital have left the firm, the largest shakeup since Roelof Botha took over a year ago. Michael Moritz is leaving to focus on the firm's wealth management business, while four other partners have also exited. This is a major development for the firm, and it remains to be seen how it will affect its investments and operations going forward. Karat Financial is a startup that helps content creators manage their money and access capital to expand their businesses. It offers a business credit card with higher limits based on creators' social and financial stats, and is now launching a card that builds personal credit history. The company recently closed a $70 million Series B funding round, a combination of debt and equity, to help them scale their existing products and build tools to help creators manage money. This is a great example of how startups can use venture capital to grow their businesses and reach new heights. Startup failure rates have been historically high, with around 90% of companies going out of business. However, the failure rate has doubled in 2021 due to the influx of venture capital funding, which has caused startups to burn through their cash reserves. To survive, founders need to be more strategic and selective about where they invest their resources. This means taking the time to research potential investors, understanding the risks associated with venture capital, and having a clear plan for how to use the funds. The startup world is constantly changing, and entrepreneurs need to stay up to date on the latest news and trends in order to stay ahead of the competition. From down rounds to new venture capital investments, the startup landscape is constantly evolving. By understanding the current trends, entrepreneurs can make more informed decisions and increase their chances of success.

The European fintech sector is booming, and payments startups are leading the charge. In the first half of 2023, payments startups accounted for 15% of the total fintech funding of $4.2bn, according to Dealroom.

Venture capitalists in Seattle remain optimistic about the region’s future, despite the recent tech market downturn. They point to the abundance of talent and the rise of generative AI as key factors that will help the region rebound. Seattle startups raised just $1.11 billion across 116 deals through the first half of the year, compared to $4.02 billion across 188 deals during the same period last year. Down rounds, which involve startups raising funds at a lower valuation than their previous round, have become increasingly common, but venture capitalists remain confident that the region will bounce back.

In today's digital age, startups are looking for ways to cut costs, increase efficiency and improve their bottom line. One area that has seen significant changes is documentation. With the rise of digital transformation, companies are now able to streamline their document management processes and reduce paperwork.

Venture capital investors are facing stiff competition from tech giants and corporations in AI startup deals. This was highlighted by the recent acquisition of Casetext a startup that provides AI tools and other services for law firms, by Thomson Reuters for $650 million in a cash deal, despite Menlo Ventures offering to invest in the startup at a valuation of $400 million. San Francisco is positioning itself as the AI capital of the world, with investors pouring billions into generative AI and fueling a startup boom.

San Francisco-based cybersecurity startup Coalition has acquired Jumbo, a mobile app that helps users control their privacy on the web.

Startups are the lifeblood of the modern economy, and they need to be supported and nurtured in order to thrive. From protecting intellectual property to unlocking pension funds and exploring solar technology, there are a number of ways to ensure that startups are given the best chance of success.

Meta's new microblogging site, Threads, has quickly gained traction with over 70 million users within two days of its launch. The platform leverages Meta's existing reach to attract users from other platforms it owns, such as Instagram, by allowing users to easily migrate their data between the two. The platform has been praised for its user-friendly interface and its ability to provide a secure environment for users to share their thoughts and ideas.

From Everytable's $25 million Series C-2 round of venture funding to the success of Brex, a multi-billion dollar payments platform, startups are continuing to make waves.

Henrique Dubugras and Pedro Franceschi, the two 27- and 26-year-old cofounders of Brex, have been making headlines with their success. Brex provides corporate credit cards and expense-management software, and acts as a bank for startups.

During the Silicon Valley Bank crisis, Brex was able to help startups open accounts quickly and run their payrolls without interruption. Dubugras believes that the current slowdown in Silicon Valley presents both challenges and opportunities.

Data from Carta, Crunchbase, and Pitchbook shows that median pre-money Series C, D, and E valuations for U.S. startups showed signs of bouncing back in Q2, although it is unclear if this pattern will hold. Global venture dollars invested continued to shrink in Q2, and the deal count also decreased. Asia continued to dominate exit dollars during Q2, likely due to a number of outsized exits in the region.

Assuta Medical Centers has launched the second cohort of its RISE with US program, which connects Israeli emerging companies with the global healthcare market, with a focus on the American market. The program is supported by tech giants AWS and Nvidia, venture capital funds of LionBird and eHealth Ventures, and non-profit organization Start-Up Nation Central. The ten selected startups are focused on developing digital health solutions based on artificial intelligence and big data, such as early detection screening tests for cancer.

Each year or two, the value of a privately-held startup is typically reset after raising money. This is in contrast to publicly traded companies, which have their valuation adjusted daily during real-time trading. Even during times of economic hardship, the valuation of a privately-held company does not change. Consequently, a company that became a unicorn (companies with a valuation of more than $1 billion) last year or in 2021 is still perceived as such externally, simply because they have chosen not to raise money and receive a new valuation, which would generally be lower than the previous one.

However, a secondary market exists that reveals the value of shares in these companies and provides a glimpse of their situation. The secondary market involves the sale of shares in the privately held startup shares by employees, entrepreneurs or investors and not by the company itself, usually with the aim of obtaining more liquid money or simply because they have received an attractive offer.

Recent share sale deals in startups and privately-held tech companies have revealed the depth of the tech crisis and the changes that have occurred in the share prices of several prominent unicorns, including Israeli companies. In many secondary deals, shares of startups are traded with significant differences between the share price at its market value - that is, at the time of the fundraising round - and the price at the time of the deal. In other cases, even when the deal has not yet been made, the sellers ask for lower prices.

For example, the price per share of unicorn Gong, an Israeli software startup, was $33.56 after its most recent financing round in June 2021. Today Gong's shares are being offered on the secondary market for just $9, a more than 70% discount on its 2021 price. Snyk, a cybersecurity company, which helps programmers protect their software code, was $12.62 after completion of its most recent financing round in December 2022. On the secondary market its shares are being offered for $7. Rapyd, a digital payment platform that competes with Stripe and PayPal, raised money in its most recent financing round at $73.41 per share, according to PitchBook - but its shares are currently being offered on the secondary market for $48 per share.

On the other hand, the ordinary share price of HoneyBook, which provides a platform for managing small businesses, has risen from $5.40 in January 2022 to $7.35 in December 2022, in the most recent secondary deal that was completed. The share price of Orca Security fell 41%, Navan's share price by 36%, Yotpo's share price by 35% and Place AI's share price by 18%.

The trend in Israel is similar to the global trend, where large discounts ranging from 25% to 75% can be seen. Many of the companies here knew how to take advantage of the boom in 2021 and the valuation they received was high compared with other countries. In fact, the secondary market is producing a correction to the valuation of the companies that was attached to them in 2021, and in the estimation of some, only half of the unicorns established in Israel still hold such a value today.

The current economic situation affects the secondary market. People want liquidity, they have taken on certain financial obligations and they need money now. In times of crisis and uncertainty, when it is not possible to know whether the company in which they hold shares will be sold in six months or three years, many prefer to have some financial certainty.

The companies have to decide whether they go for another fundraising round or not. When more and more people need liquid money, as is happening now, the share price goes down. Many startups are not interested in waiting for an exit and want to make money here and now, so they rush to make secondary deals, even at a low price.

It appears that the industry is beginning to emerge with correct criteria for valuations. In 2021, the name of the game was how much each company could raise and in how much time it managed to move from one financing round to the next. Now, it seems that the industry is recognizing the need for more accurate valuations.

In response to the situation, Gong said that it has not raised any money since its Series E financing round in June 2021 and has not offered secondary plans to employees on its behalf. Orca Security noted that the share offered in a secondary deal and appearing in the article, at a value of $7, was compared to the price of an ordinary share from the last fundraising round - which was priced in October 2021 at a value of $9.8. The figures that appear are based on one transaction made by a single employee independently and do not affect the valuation of the company.

Innovation, ambition, and perseverance collide when startups occur. They shape the future of all industries. The startup landscape presents intriguing aspects in 2023. All opportunities are bound to captivate investors and enthusiasts alike. Yet, navigating these aspects is a complex fete.

Bankrate reports that an astonishing 77% of entrepreneurs finance their startups personally without any outside aid. Startup financing can be a difficult hurdle to cross for many entrepreneurs. Depending on the business’ size, potential breakthroughs, and goals, startup financing may come in different forms, and each has its own set of advantages and drawbacks. 

While many businesses thrive on having one or two innovators at the core, there’s strength in numbers. Startups, in particular, thrive on solid yet flexible bonds. The old ideal of ‘startup team building’ is rolling back around again. However, in the New 20s, it holds a lot of weight!