Welcome to Startups Weekly, a new take on this week’s start and startup trends. To get this in your inbox, subscribe here.
Bootstrap startups, or companies that use their own earnings or existing cash flow to fund growth rather than relying on outside sources of capital, are in a very different category than venture-backed startups. By asset class nature, bootstrap startups prioritize revenue to stay alive, while venture-backed startups prioritize growth to retain investors for future runway needs. Bootstrap companies follow less of an exponential growth curve, while venture capital backed companies should be an outlier.
Enter a downturn and both sides get a tad more interesting. The built-in business discipline of startup startups can be particularly resilient to a recession as the overfunded companies announce layoffs. With venture becoming more interested in the stable foundations of the startup group, is it time for the bootstrapper to go big?
According to co-founder Cavan Klinsky, For Healthie, a payment processor for healthcare companies, now felt like the right time to enter the “treadmill” of venture capital after six years of bootstrapping.
“If you are a bootstrap company that is not yet on the [venture] treadmill, you have that kind of choice or that ability to choose when you get in,” he said. you can be very opportunistic about what the right time is.
For my full opinion, read my londonbusinessblog.com+ column: Will Ever Startup Startups Venture to a Tipping Point?
In the rest of this newsletter, we’ll be looking at Honey for the real world and behind some of the major layoffs in technology. As always, you can support me by forwarding this newsletter to a friend or follow me on twitter.
Offer of the week
If Pogo had his way, you’d get paid every time you walk down Market Street in San Francisco. Or check your email. Or open the app. The only catch is that you’re giving your personal information to the consumer-facing fintech in return. In other words, Pogo wants to give users money in exchange for their data.
I dove into the startup, which just raised a $12.3 million seed round led by Josh Buckley and a previously unannounced $2.5 million pre-seed round, and the goals for londonbusinessblog.com this week.
Here’s why it’s important: Pogo gets an intimate look into someone’s life, from where they live to their favorite coffee shop to how many subscriptions they have. It’s similar to what a bank would see, but it’s a venture-backed startup you want to trust.
The Electronic Frontier Foundation, a nonprofit organization that has championed civil liberties in the digital world since 1990, describes the idea of exchanging data for money as “data dividends.” In an essay, the organization urges consumers to reconsider whether getting money for their data really solves the existing imbalance between users and businesses.
The EFF asks a series of questions, such as who determines the cost of certain data and what makes your data valuable to companies? Plus, what does the average person gain from a data dividend and what does he lose in exchange for that extra money?
The layoffs continue
There were a number of significant layoffs this week, not limited to but including:
Here’s why it’s important: This format almost doesn’t work for layoff coverage because it’s obvious why people losing their jobs are an important dynamic to cover. More recently, what’s new, which I’ll get into next week, is that we’re seeing founders make two rounds of layoffs in quick succession.
Read it here: “Great Resignation meets Great Reset meets (Great Run those ratings please).” I also recorded an accompanying podcast with my co-author of the piece, Anita Ramaswamy, which you can listen to here: “A Niche Facet of Startup Employee Compensation Explained.”
Are there any requests for topics I can delve into, either on Startups Weekly or on the show? Tweet me a big question and I’ll have a go at it either on an upcoming Startups Weekly or on the podcast.
Seen on londonbusinessblog.com
Equal Ventures has a new pair of funds, registrations show
Instagram gets worse with TikTok dark patterns
If you think Instagram is bad right now, you won’t like Zuckerberg’s plans
Here’s Why A Gold Rush Of NLP Startups Is Coming
Sports community platform Stadium Live raises $10M to expand its digital world for Gen Z
Seen on londonbusinessblog.com+
Build a solid deck for your quarterly board meetings
Venture investors shrug off proposed changes to US-borne interest tax
Pitch Deck Teardown: Alto Pharmacy’s $200M Series E-deck
You can now get cheap startup stocks
The Right Questions to Ask Investors When Fundraising in a Down Market
OK! I’m going to the mountains. Until next time,