This week's startup news and trends will be the subject of a new weekly column. This will be in your inbox if you subscribe here.
Early-stage tech companies are in a different world than late-stage ones. The cohort has had access to a lot of capital in the last few quarters, giving them a bubble of venture capital that protects them from rapid changes in the economy.
The bubble is not popping, but it is changing shape.
While we may not see early-stage startups go through aggressive rounds of layoffs or experience immediately slashed valuations due to shifting market conditions, there is a different signal worth tracking: pivots. A change in business strategy based on a new insight or market trend is inevitable for young companies still chasing product-market fit. pivots are more important to track than a financing round because they give a snapshot of a startup reacting to a new tension in the market. A pivot is a definite signal that something is changing, a tension other than a group of investors affirming that a founder is onto something big.
It is clear that the coming weeks and months will include a lot of subtle shifts in how early-stage startups do business. Some may re-prioritize objectives to reduce risk, while others may pursue new, more near-term business models to finally get some revenue in the door.
In the rest of the newsletter, we'll talk about a deal. You can support me by sharing this newsletter or following me on social media.
A music marketplace where any musician can sell their music and keep 82% of the profits was bought by the creator of the video game. The acquisition comes amid a broader discussion of the role of platforms in creators' lives, making platforms like Bandcamp stand out simply due to alignment of incentives. There is a new chapter to analyze now that it is within the comfortable embrace.
Here is why it is important.
“When artists see that a platform they use to make a living is being acquired, their usual reaction isn’t, ‘Oh, cool, they will have more funds to produce better features to help me monetize my creative work!’ They think, ‘Oh shit, not again.’
It happened when Google bought YouTube, and when Spotify bought Anchor. Artists recognize that when a platform changes ownership, even the smallest tweaks can impact their livelihoods. Why would artists trust Big Tech companies when Spotify payouts are dismal, OnlyFans temporarily made career-endangering decisions for sex workers, and Patreon flirts with the idea of crypto payments, a move many of its creators are strongly against?”
I wonder if the buy is in light of community or just in pursuit of capitalism. We'll talk about Equity next week, so let us know what you think.
Mentions of honorable nature.
The image is from TechCrunch.
I spoke with Alex and Mary Ann about the state of financial technology. It was inspired by Ramp's expansion into travel and Pipe's acquisition of an entertainment company.
Beyond continuing the conversation of fintech going full stack, we worked through our biggest questions on the current state of the industry. How do you differentiate when fighting for the same group of users when all fintechs are the same company? The market made the conversation even more relevant, as public market repricings may be one of the factors that leads to more proven revenue streams.
So what?
The image is called MirageC
You can get a new cup of tea, coffee, or beer at home. The venture capital firm is leaving its strictly seed-stage roots and moving to a more stage-agnostic evergreen model that is funded solely by the general partners.
The pivot is important because it is a crucial market moment for tech startups. Public tech stocks are being hammered. While early-stage private companies are largely unaffected by the influx of venture capital, later-stage companies are finding themselves in a tougher position.
In a market where raising larger and larger funds has become routine, the move is noteworthy. The perennial challenge when raising more capital is that the investor has more pressure to deliver. You can provide outcomes at a 5x rate on a $15 million fund, but can you still hit venture-like targets when you ask them to back a $150 million fund? What about a billion dollars?
The returns are returned.
The image is of a comet.
We get to hang out with each other. Soon! The Techcrunch Early Stage is in San Francisco on April 14. Join us for a one-day founder summit and meet some of your favorite people. Don't be surprised if the panels are a little more spicy than usual, the team has been itching to get back in person.
You can grab your launch tickets here.
Also, follow our newest Equity producer:Maggie Stamets!
There is a person seen on a website.
The cart is before the horse.
The YC-backed Blocknom wants to become a coin base earner in Southeast Asia.
Customers will be able to build data-based apps with the acquisition of Streamlit.
Nothing is working on a phone.
It was seen on the tech site.
After 2 rejected deals, Zendesk considers its next steps.
Corporations are trying to get into the game.
The importance of differentiating your startup was discussed by Waabi's Raquel Urtasun.
How wrong were those projections?
The R&D tax credit is something US startup founders need to know.
Next time.
N.
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