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It’s YC week, and while I love questioning how the impact of growing accelerators is in today’s climate, there’s always a lot to learn about the hundreds of founders coming together and introduce their business to the world. I, along with some of my favorites on the TechCrunch and TechCrunch+ team, covered the Y Combinator Winter 2022 Demo Day with a series of posts:
However, now that we’re done, I’d like to leave you with a few takeaways from listening to hundreds of pitches. Here’s what the 411 Demo Day pitch will teach you about entrepreneurship:
India is all about fintech: India is the country with the most representation, outside of the US in Winter 2022. For what it’s worth, more than 191 companies in India have been funded through the Y Combinator accelerator, with almost one half! – of approved companies in the last 12 months.
- Demo Day is not for sponsorship, anymore: In this week’s Equity section, we chatted about how demo days have evolved in the utility and whether performance in and of itself is outdated. I won’t spoil our final conclusion, but I will mention some well known YC data. This year, YC says it supports startups at any stage of its accelerator, and more than half of the companies raised money before being accepted. To me, that means the accelerator is not really for a pre-seed company looking for a first check, but for any company that wants access to the YC network.
- Competition is inevitable: We’ve noticed that a number of startups are essentially competing directly with each other in this season’s batch, which is not a new trend but perhaps a more noticeable one as the accelerator extend. Most of the early stage investors I talk to try to avoid any conflicts of interest, so YC supports companies in the same geography, with identical business models and year of establishment. are contradictory in some way. It seems that the accelerator has avoided any stress so far by separating similar startups from each other – but with an adoption rate of around 2%, one has to wonder how Similar bets are determined.
I made an earlier version of this column in September, titled “What 377 Y Combinator pitches will teach you about entrepreneurship.” A few months later, the accelerator has expanded in size, with nearly half of its companies based outside the United States and new representation from New Zealand, Sudan, Uganda, and Costa Rica.
I will remind all of you, as I always do, that the YC – like any single organization – does not quite exemplify the next wave of corporate decision-makers and leaders. starting a business. Its growing check size, for example, has knocked out a whole host of sponsors who have been hunting for the trading flow since demo day. And when it comes to diversity, the accelerator has aided some underrepresented groups.
For the rest of this newsletter, we’ll look at an edtech round in India, removing Cross River Bank’s atypical scaling and gains. As always, you can support me by forwarding this newsletter to a friend, follow me on twitter or Subscribe to my personal blog.
Trading of the week
Classplus! As our own Manish Singh pointed out, “at a time when a lot of edtech companies in India are trying to cut their reliance on teachers, a Noida-based startup is helping teachers. and creators operate, manage and sell courses to students raised $70 million in a new round of funding. ” The startup, currently valued at $570 million, is only four years old.
Here’s why it’s important: Offline coaching – in which one-on-one tutors teach students about a wide range of subjects – is still very popular in India, however it is limited by geography. The pandemic and broader global digitization have prompted some teachers to pursue online opportunities to grow their larger businesses. Classplus’s ability to raise money means urban India has enough demand to be a venture capital market.
Let’s remove the ratio
Investors Vijay Chattha and Jay Kapoor, co-founder of a joint venture drawn from a PR firm, recently wrote an op-ed suggested that VC should abolish proportionally. The duo drew from a portfolio survey and found that investors rarely provide added value beyond 90 days from the signed terms sheet. “At that point, investor participation was limited to their attendance at the quarterly board meeting — and that was the primary investor,” he said. op-ed continues.
As a result, investors think that their peers should not use contractually negotiated prorated rights if they are not engaged in the business, because “their mere presence on the limited tables will discourage other VCs from working harder for their founders.”
Here’s why it’s important: Chattha and Kapoor’s argument is counterintuitive, because it bets on investors changing their habits at the expense of their own profits. However, I like that it requires investors to raise their level of involvement and influence once they reach that coveted cap board position. It’s easy to give up rates in a struggling startup, but what if you need to constantly prove yourself to the top rated company? Affiliate offers for days, if you ask me.
Other surprises of the week:
From small to mighty, really fast
Cross River Bank has raised $620 million in funding at a $3 billion valuation north. The company provides the technology infrastructure for venture-backed loans and payments, making raising capital a double bet on the fintech boom.
Here’s why it’s important: Fintech startups raised $121.6 billion last year – a 153% increase year-on-year in global VC deal value, however, as Mary Ann pointed out, the pouring Millions of dollars into a traditional bank is atypical. Andreessen Horowitz general partner David George explains why he is interested in the company:
George told TechCrunch: “When Coinbase first started out and was looking for a partner bank, many traditional financial institutions had policies in place that prevented them from getting into crypto. “On the other hand, Cross River had the foresight to enter this new frontier and support Coinbase and many other leading crypto companies who remain happy partners to this day.”
Validation of the day:
We can hang out live! Early! TechCrunch Early Stage 2022 is April 14, aka close, and it’s in San Francisco. Join us for a day-long founders summit with teachers Terri Burns, Greylock’s Glen Evans, and Felicis’ Aydin Sekut. The top team of contributors is looking to get in touch directly, so don’t be surprised if the dashboard is a bit worse than usual.
Finally, if you missed Last Week’s Kick-offRead it here: “We keep trying to reinvent the starter accelerator.”
Seen on TechCrunch
Seen on TechCrunch +
Until next time,