TechCrunch+ Roundup: In-Depth Due Diligence, Q1 2023 VC Results, Flying Lessons for Angels

Becoming an angel investor isn’t easy – and that’s on purpose.

Those claiming the title must meet a few income and licensing requirements. Otherwise, just about anyone could schedule Zoom calls with the founders to talk about realizing their dreams.

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Trade schools teach the basics, but Mysty Rusk, who has reviewed around 4,500 deals over the past 20 years, says the most important lessons she’s learned are the result of mistakes she’s made. committed along the way.

“There may be no way to predict a global crisis, stealth competitor, or other risks that are totally beyond the startup’s control,” Rusk writes, “but some obstacles are avoidable with the right knowledge.”

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Investors want the best ESG data. Here’s how to give it to them.

The potential of environmental, social and governance (ESG) investing is still largely untapped: a PwC study published last year estimated that ESG assets under management will increase by 84% between 2021 and 2026 to reach $33.9 trillion .

“There simply aren’t enough entrepreneurs offering properly ESG-aligned investment opportunities,” according to T. Alexander Puutio, adjunct professor at NYU Stern.

In this comprehensive article, Puutio provides an overview of ESG disclosure frameworks, including action items for startups hoping to be acquired or taken public.

For thorough due diligence, minimize disruption to maximize success

Picture credits: Vectorian (Opens in a new window) /Getty Pictures

Setting up a legitimate data room for due diligence is no small feat: stakeholders from multiple departments need to provide tons of documents and keep them regularly updated.

“If you’re not careful, you can run into delays, or worse, investors pulling out at the last minute,” according to Denis Shafranik, co-founder of venture capital firm Concentric.

“That means your goal should not just be to be successful, but also to minimize disruption to your team and the growth of your business.”

Drawing on his experience helping portfolio companies, Shafranik offers suggestions for managing the scope of work, soliciting investor feedback, and controlling the narrative.

Disruptions in venture banking can help us get back to basics: efficient growth

Picture credits: Huang Xiuxia (Opens in a new window) /Getty Pictures

The ongoing downturn plaguing public and private startups could also be described as a market correction.

“The reality is that most founders and venture capital funds don’t know what the market price is on seed valuations right now,” writes Sach Chitins, co-founder of Jump Capital.

For many early-stage startups, sustainable growth may be more important than fundraising right now, as many VCs adjust their risk tolerance by simply deciding not to invest.

“Resetting expectations to match market realities helps set the tone for operating in the market environment,” says Chitins. “It’s time to get back to basics and build more efficient businesses.”

Are solo GPs screwed?

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There has been a lot of talk lately about founders failing to achieve product market fit and being under pressure to return money to investors. But what about general partners who send money back to their LPs?

Now that “the math of business has changed”, Natasha Mascarenhas has spoken to solo GPs who have passed on funds to their sponsors or, in one case, urged them to cancel their subscriptions.

“I can’t imagine an institutional LP being so open-minded to invest in one person doing a lot of investing on their own without a team or partnership model,” said Sahil Lavingia, CEO of Gumroad. .

Q1 VC results tread water, but it’s cold comfort for SaaS unicorns

Picture credits: Nigel Sussman/TechCrunch

As the first quarter of 2023 draws to a close, Alex Wilhelm reviewed early data from PitchBook to get an idea of ​​key VC trend indicators such as number of trades and total capital invested.

“The picture that forms from the first quarter of 2023 venture capital data is one of a measured decline relative to the end of 2022,” he found.

“And March brought with it something akin to a boom in domestic venture capital activity, which could get even brighter if the latest first-quarter data further bolsters the month’s totals.”