Follow-on financing is harder to raise these days, which means founders must watch their spending like hawks while keeping the peace with their investors like sweet, cooing doves.<\/p>\n
Which proofs are investors looking for before they\u2019ll commit to additional funding, what\u2019s an acceptable burn rate, and how much runway do you need before raising more?<\/p>\n
At TechCrunch Disrupt, I spoke to three early-stage VCs to get their unfiltered advice for founders who are trying to keep the lights on<\/a> long enough to reach product-market fit:<\/p>\n Full TechCrunch+ articles are only available to members. TL;DR \u2014 If you haven\u2019t found traction with customers and aren\u2019t generating revenue, you should be in fundraising mode already.<\/p>\n Thanks very much for reading TC+, and be well.<\/p>\n Walter Thompson Image Credits:<\/strong> Barks_japan \/ Getty Images<\/p>\n<\/div>\n Generative AI is the dynamo revving up tech\u2019s latest hype cycle, so Anna Heim launched a three-part investor survey exploring \u201cthe various parts of the AI puzzle, where startups have the highest chance of winning, and where open source might overtake closed source.\u201d<\/p>\n Here\u2019s who participated in part one:<\/p>\n We\u2019re definitely in a down market, but for entrepreneurs who are eager to build and scale, venture capital is always<\/em> scarce.<\/p>\n At TechCrunch Disrupt, I spoke with three investors to hear how they\u2019re advising founders (especially first-timers) on how to calculate total addressable market, how it differs by sector, and how the TAM slide often reveals whether a founder is even ready to start raising capital:<\/p>\n Image Credits: Bryce Durbin \/ TechCrunch<\/p>\n<\/div>\n Until today, I had no idea that \u201cFTX\u201d stood for \u201cfutures exchange.\u201d<\/p>\n That\u2019s how much I\u2019m learning from the TC+ team\u2019s coverage of Sam Bankman-Fried\u2019s fraud trial in NYC, where one of our reporters waited in the rain outside the courthouse this morning to nab a prime spot.<\/p>\n If you\u2019re curious about the opening statements by the prosecution and defense, this summary by Rebecca Bellan and Jacquelyn Melinek will bring you up to speed.<\/p>\n Investors are open to bandwagon jumpers, but they\u2019re looking for startups with defensible moats and qualified teams that can become market leaders.<\/p>\n So, when should founders ignore the hype, and when should they follow the crowd?<\/p>\n To get answers to these and other questions, I interviewed three early-stage investors at TechCrunch Disrupt 2023:<\/p>\n TL;DR \u2014 It\u2019s OK for a founder to jump into an emerging hype cycle, but only if they have a genuine interest in that area that reaches back in time.<\/p>\n Image Credits:<\/strong> Nigel Sussman (opens in a new window)<\/span><\/a><\/p>\n<\/div>\n A PitchBook report out this week confirms the general doom and gloom around tech investment.<\/p>\n \u201cVenture deal volume has fallen every quarter since Q2 2022 across the world, and the trend shows no signs of reversing,\u201d write Anna Heim and Alex Wilhelm in The Exchange.<\/p>\n \u201cQ3 2023 saw 7,434 deals compared to the previous quarter\u2019s 9,563 deals.\u201d<\/p>\n Image Credits:<\/strong> Lupiya (opens in a new window)<\/span><\/a><\/p>\n<\/div>\n Lupiya, a fintech that offers personal and commercial loans to customers in Zambia, shared its 10-slide Series A pitch deck with TechCrunch+ so Haje Jan Kamps could deconstruct it.<\/p>\n \u201cThe company said it has edited its traction slide to protect some sensitive details, but it did share some of the numbers with me in confidence,\u201d he writes.<\/p>\n
Use discount code TCPLUSROUNDUP<\/strong><\/a> to save 20% off a one- or two-year subscription.<\/i><\/p>\n\n
Editorial Manager, TechCrunch+
@yourprotagonist<\/a><\/p>\n10 investors talk about the future of AI and what lies beyond the ChatGPT hype<\/h2>\n
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How founders should approach TAM when venture capital is scarce<\/h2>\n
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Was FTX an empire \u2018built on lies\u2019 or a startup that \u2018grew too quickly\u2019?<\/h2>\n
![\"Illustration](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2023\/10\/sbf-001.jpg\")
<\/p>\n3 VCs weigh in on when to follow the hype cycle \u2014 and when to ignore it<\/h2>\n
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The global VC market continues to stumble<\/h2>\n
![\"\"](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2020\/05\/NSussman_Techcrunch_Exchange_v3_RD.jpg\")
<\/p>\nPitch Deck Teardown: Lupiya\u2019s $8.3M Series A deck<\/h2>\n
![\"\"](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2023\/10\/PDT-Lupiya-coer.jpg\")
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Get the TechCrunch+ Roundup newsletter in your inbox!<\/h2>\n
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To receive the TechCrunch+ Roundup as an email each Tuesday and Friday, scroll down to find the \u201csign up for newsletters\u201d section on this page, select \u201cTechCrunch+ Roundup,\u201d enter your email, and click \u201csubscribe.\u201d<\/p>\nClick here to subscribe<\/a><\/strong><\/h3>\n
Employee liquidity isn\u2019t a myth, but it isn\u2019t easy to provide either<\/h2>\n
![\"A](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2022\/01\/GettyImages-1311711881.jpg\")
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