There is a collision happened in the early stage market.
In one world, late-stage investors respond to tech-stonk corrections by shouting at the early-stage investing world, forcing seed investors to go even earlier to defend ownership and potential returns. This trend was underscored by the establishment of firms such as Andreessen Horowitz a pre-seed program months after Launch of a $400 million seed capital. Additionally, Techstars, an accelerator literally launched to help startups get off the ground, has launched a business support fund which are too early for its traditional programming.
While all of this is going on, early-stage investors are hanging on a review correction and portfolio discounts. Some admit that they tell portfolio companies not just to focus on growth but on cash preservation, profitability and discipline.
Let’s imagine these two vastly different worlds in the same universe: early-stage investors are becoming more disciplined and liquid, but at the same time the earliest investors are leaving earlier. Investors are urging founders to be lean but also green while offering them $10,000 to take a week’s PTO and try their hand at entrepreneurship. Growth, Gross Margin and Burn are the new top priorities for CEOsbut at the same time, venture capitalists are clamoring to offer more funds sooner in newly invented subcategories of early-stage investments.
The tension between these two worlds looks different depending on whether you’re a Stanford founder starting a SaaS company or you’re a bootstrap entrepreneur trying to disrupt agtech for the first time. That said, the growing spotlight and discipline in the early stage leads me to ask just one general question: What else can early stage investors focus on?
If the earliest investors keep going earlier, what will happen? – TechCrunch Source link If the earliest investors keep going earlier, what will happen? – TechCrunch