Startups Blog

Melanie Miller

Recent Posts by Melanie Miller:

Insurance Customer Journey Map: Identify Pain Points and Opportunities

The Customer Journey Map in Insurance Identifying Pain Points and Opportunities

The customer journey is crucial for the insurance industry. Customers have high expectations, and technology is developing; insurance companies want to stay connected to their customer base. Identifying the pain points and opportunities is crucial for success. 

Topics: Customer Support business insights Insurance

Incorporating Business Principles into Public Administration Education Programs

Incorporating Business Principles into Public Administration Education ProgramsAs public sectors face increasingly complex challenges, the integration of business principles into public administration education becomes essential. Public administration programs have traditionally focused on governance, policy analysis, and public law.

Topics: Education business University

The Challenges for Israel in the Startup Scene

During the sixth annual "Trends and Forecasts" conference, Gigi Levy-Weiss, co-founder and General Partner of the NFX venture capital fund, expressed his concerns about the challenging landscape for startups in Israel.

How Startups Can Apply for Government Grants (U.S.A.)

Getting a startup off the ground can be a herculean task. One of the most significant challenges faced by entrepreneurs is securing funds to scale their business ideas. If you're looking for alternative funding sources beyond venture capital or bank loans, U.S. government grants can be a golden opportunity. In this guide, we will walk you through the step-by-step process of applying for these grants.

68% of Israeli Startups Take Action to Protect Businesses

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.

Seattle VCs, Israeli AI & Houston Innovation

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.

Startups Today: Intellectual Property, Pension & Solar

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.

Unicorns Remain Unscathed: The Resilience of Privately-Held Startups

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.

6 Reasons Why You Should Use Coworking Spaces For Your Startup

If you're getting your startup off the ground, then you're going to have to think about where you'll locate your business. Hiring out office space is an option, but many startups are now working out of coworking spaces. Here's why you'll want to consider them for your new business. 

Best Lead Generation Tools to Get More Targeted Leads

Generating leads for your business is not just about collecting data of people who can be your potential customer. Lead generation is a lengthy process that includes several steps like lead nurturing, lead qualifying, etc.  

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