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.
It's worth addressing an elephant in the room that comes around often in the tech versus media debate, as I hear about more startups struggling amid shifting market conditions, the great resignation and the general inflection point that begins once a company hits growth stage. What do we do to cover failure?
There's an argument that startup tensions are inevitable and common, so should we spotlight every time something goes wrong, especially at the cost of an underrepresented founder who may just be doing their best? There's an argument that the business is messy, so we should report on the issues as we hear about them, and there's a narrative of women being targeted by the press more than men.
The tech world has preconceived notions of how a historically overlooked individual should act, and I use that reality to influence my reporting. I once asked a prominent female founder about a drama that I was hearing about from her ex-co- founder. She said that she can't afford to show vulnerability at this point in her career.
I think that you can believe that any powerful founder, even if they have millions of dollars at their disposal, should be held accountable for the company they create, but I also think that tips from sources can sometimes be biased. From deciding what a former employee's incentives are to understanding who can afford to comment matters.
ashley perfectly articulated an important nuance about speaking up
i remember asking a prominent female founder ab drama i was hearing. she was basically like, "it's not that i don't want to tell you, i can't afford to show vulnerability at this point in my career." https://t.co/JD6whabOJr
— natasha (@nmasc_) March 17, 2022
If we track the trajectory of a startup, we should be watching them fall apart. But contextualizing matters. If a founder lies to consumers or harasses employees, it's pretty clear how to identify the individual as the source of the issues, but how we cover it is important. It is difficult to attribute failure to a certain moment.
Sometimes a startup falls apart because the founder leads a shitty culture, but sometimes venture capital's incentives can lead to a messy product spree. Who is to blame for this case? The founder for taking money or the VC for too much pressure? The ever-fickle market? We talk about startup failure in a macro sense, but when we write a window into a specific example, it's important. We need diverse newsrooms and patient editors to make sure we are asking the right questions. It is important that founders treat their staff like humans.
We will talk about All Raise's new CEO, funds to back other funds and Ukraine in the rest of this newsletter. You can support me by sharing this newsletter or following me on social media.
The financial services sector has an especially crucial role and set of decisions to make in the startup story within the war in Ukraine. The president of Ukraine signed a law to allow the legalization of cryptocurrencies, as well as a slew of digital donations and data showed that nearly 7,000 apps have left Russia's app store since it invaded Ukraine. There are some big tech apps.
This is important because it is pretty self-explanatory. Mykhailo Fedorov, Ukraine's vice prime minister and minister of Digital Transformation, was interviewed by Romaine Dillet. Fedorov talked about Ukraine's tech strategy, otherwise known as a digital blockade.
We call this project digital blockade. And we believe that this is a very crucial component to winning this war. And I think that, in the future, governments will resemble tech companies, not classical governments.
Digital platforms provide some vital services. They have become so embedded into the fabric of society. Once you start removing these services from the aggressor, one by one, you actually damage their fabric of society and you make it very uncomfortable for them to go along with their daily lives.
We’d like to think of this as a completely new and unexplored battlefield. And this is a complementary measure to sanctions which we expect is going to push the development of Russia back decades.
Tech and Ukraine are covered in other ways.
All Raise, a nonprofit that focuses on increasing diversity within venture capital deals and decision makers, has named a new CEO. Over the course of 10 years,Dixon has worked to increase representation in the startup world. Founder Gym was an online training center for underrepresented founders that ran 18 cohort across six continents. The current cohort of Founder Gym will be its last graduating class.
Even though All Raise is a nonprofit that was created to increase representation in tech, it is important that they bring a new level of inclusivity to the organization. She says that one of the first Black women in Silicon Valley to raise venture capital and work at a venture capital firm was Dixon. She had two children during the Pandemic and added another one of who she has evolved to as a leader.
I also live my experiences of exclusion bias, whether unconscious or conscious, according to an interview I had this week. You can expect that to carry through in my leadership as we make sure that what we are capturing who we are supporting is really a more inclusive space for a realm of identities.
Mentions of honorable nature.
All Raise is an image.
I wrote a piece this week about the surge of funds that were created to put money into other funds. As we talked about Equity this week, investors are broadening how they invest in money, whether that is backing other emerging fund managers or finally giving Series B rounds the attention they deserve.
The startup financing market is changing on a daily basis, which means that investors will continue to innovate. Shifts are happening and impacting U.S. Series A, B and C valuations.
Series A is the largest decline in round size in the United States from November and December of 2016 to January and February of 2022. Series A rounds on both a median and average basis in the beginning months of 2022, still remain over the $10 million mark. The market is still hot.
Series C is a better example. Average valuations for Series C investments in the United States startup market fell sharply at the start of 2022, with median valuations also taking a firm whack. The average Series C valuation in the first two months of the year was $467 million, which is a far cry from the average valuation of $884 million. That is a huge change, one that backs up our general grousing about the changing public markets and how those price shifts should impact startup valuations, especially among companies that are on a clear path toward an exit.
Funds want funds.
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.
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When you don't have technical expertise, how to hire great engineers?
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Next time.
N.
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