Churn rate basics, BNPL fraud, fundraising IP checklist – TechCrunch

The venture capital market is slowing, which means early-stage founders are chasing after a smaller pool of money.

According to Carta, the number of seed deals funded between Q4 2021 and Q1 2022 fell by 41% and dollar volume followed suit, falling from $2.62 billion to $1.81 billion, which corresponds to a decrease of 31%.

In this environment, teams that successfully complete a fundraising round will face a shorter runway than planned, meaning partnering with an investor who understands the business well enough to add value is more important than ever a year ago.

Since a start-up pitch is the first step on this path, We interview active investors to learn more about what they are looking for and how they prefer to be addressed.

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For our most recent outing, we asked each of them to name a pro forma pitch practice that they believe founders should retire from. In particular, angel investor Marjorie Radlo-Zandi said that entrepreneurs who embellish the size of their market are self-sabotaging.

“Don’t be tempted to exaggerate your market size and infinite potential,” she said. “We call blatantly inflated numbers ‘hand waves’. If you exaggerate, you appear less credible to investors. Not all investors expect to invest in the next unicorn.”

Thanks to all who participated:

  • Christine Tsai, CEO and Founding Partner of 500 Global
  • Marjorie Radlo-Zandi, Engel, Launchpad Venture Group, Branch Venture Group
  • Clelia Warburg Peters, Managing Partner, Era Ventures
  • Anarghya Vardhana, Partner, Maveron LLC
  • Frederic Huynen, Partner, and Wijnand Bekker, Associate, HPE Growth

If you already have an established network, this article is probably not for you. But if you are a first time startup and preparing to fundraise, please read and share.

Thank you for reading and have a great weekend!

Walter Thompson
Senior Editor, TechCrunch+

Learn the basics of churn rate to set customer and revenue benchmarks

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Whether it’s a neighborhood gym or a SaaS decacorn, any business that relies on recurring revenue closely monitors its churn rate.

Churn “is complex and confusing,” says Sid Jain, senior analyst at ChartMogul, but for early-stage companies, it’s one of the few real-time metrics that can help founders conduct experiments and gather feedback quickly.

Jain explains the differences between customer and revenue churn, shares formulas for calculating benchmarks, and answers the question, “What is a good monthly churn rate?”

Dear Sophie, can a startup sponsor a graduate co-founder?

lone figure at the entrance to the hedge maze that has an American flag in the middle

Photo credit: Bryce Durbin/TechCrunch

Tuesday, April 26 at 2:30 p.m. PT/5:30 p.m. ET, Sophie Alcorn will answer questions about immigration law for startups during a Twitter Space moderated by Senior Editor Walter Thompson.

The conversation is open to all, so please submit your questions on Twitter and Click here to get a reminder when the chat starts.

Dear Sophie,

What are the visa options for a US university graduate who wants to help found a startup after graduation?

Can the newly formed company or other co-founders sponsor the recent graduate?

— Forward-thinking Founder

Fraud-as-a-Service: Scammers use encrypted messages to undermine BNPL’s revenue

Credit card online payment fraud concept. Internet hackers steal money cybercrime from smartphone payment app.

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Consumers have been enthusiastically opting for “buy now, pay later” services in recent years – as have online scammers.

Using secure messaging apps that serve as dark web marketplaces, cybercriminals target retailers and BNPL providers with stolen data.

“The only way to stay ahead of these scams is for BNPL providers to ensure they have the right defense strategy in place to combat fraud on their own platforms and networks,” says Brittany Allen, Trust and Security Architect at Sift.

10 Loose Ends of IP and Commercial Contracts You Need to Tie Before Approaching Investors

Close-up of multi-colored shoelaces on a black background

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A convincing pitch is not the first step on the path to fundraising.

Before approaching investors, founders must first conduct due diligence on themselves to ensure they are aware of any liabilities affecting their intellectual property.

“Waiting to address these issues during a financing could result in delays, time-consuming and expensive remedial actions, and worst-case scenarios, lower valuations,” said William Wilson, partner at Goodwin Law.

In a TC+ guest post, he lists 10 potential pitfalls “and steps startups can take to better prepare for these problems.”

Submit your questions for a TechCrunch+ Twitter space with Sophie Alcorn, Immigration Lawyer

A composite image of immigration attorney Sophie Alcorn against a background with a TechCrunch logo.

Photo credit: Joanna Buniak / Sophie Alkorn (opens in a new window)

On Tuesday, April 26th at 2:30pm PT/5:30pm ET, I will host a Twitter Space with Sophie Alcorn, a Silicon Valley-based immigration attorney and author of Dear Sophie, a column that appears on TechCrunch+ every Wednesday.

We’ll discuss relevant topics for tech workers and founders considering starting a business in the US, including H-1B visas, ways for international student founders, what to do if you weren’t selected in the green card lottery, and Information for members of the Ukrainian IT community affected by the ongoing Russian invasion.

This section is open to everyone, so please click through set a reminder for the chat and submit your immigration-related questions for us to ask during the Q&A.

4 questions every CISO should be asking about the Metaverse

The metaverse is still taking shape, but it’s already causing headaches for cybersecurity professionals.

Technology that puts users in virtual, immersive environments where they can transact could unlock untold benefits, but it will definitely create a threat attack surface of titanic proportions. To prepare, CSO/CISO David Fairman says organizations need to be able to answer these questions:

  • Can we protect PII (and other sensitive data) in the Metaverse?
  • How can I authenticate users?
  • Can we protect users from bullying, harassment and exploitation?
  • Can we handle this kind of rapidly expanding attack surface?

Churn rate basics, BNPL fraud, fundraising IP checklist – TechCrunch Source link Churn rate basics, BNPL fraud, fundraising IP checklist – TechCrunch

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