↔️ Swipe Fatigue

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🌟 Top News in Startupland 🌟 

The State of LP Distributions in the U.S. Is Grim

New data from the PitchBook-NVCA Venture Monitor shows a dark cloud hanging over the venture capital (VC) environment. Published last week, the report pointed to a steep decline in distributions as negatively impacting the current dealmaking and fundraising climate.

According to the report, Q3 2024 saw 2,794 deals (34% lower than Q2 2024) valued at $37.5 billion (a 32% decrease from the same period). To further compound the issue, most deals were insider rounds and bridge financings, evidence of VCs’ trepidation to inject capital into new funds since the boom times of the pandemic came to an end. As a result, the distribution rate is the lowest it has been since the 2008 recession. VCs have instead “opt[ed] for quality over quantity as they increase time spent on due diligence and advocate for more investor protections in term sheets,” as stated in the report.

Government scrutiny about M&As and antitrust inquiries have had a large impact on the VC environment, but this is not the whole story. Inflation starting in 2022 and high interest rates have lowered the liquidity VCs can use toward new funds and exit opportunities for startups.

On the sunnier side, the Federal Reserve announced a rate cut of half a percentage point. It will take a while to see how the VC environment fares with this cut and subsequent ones, but it offers a bright spot.

⚡️ Community Poll ⚡️

Last week 64% of respondents indicated they believe OpenAI’s new $6.6 billion deal will lead to the company crushing the competition in the generative AI sector.

Even More Headlines

👩‍⚖️ VC-backed legal tech startups have raised $1.9B this year so far (thanks to AI).

🌎 Amazon added five startups to its $2B Climate Pledge Fund portfolio.

🤖 Move aside chatbots, VCs are directing funds toward AI infrastructure.

🤝 Covid-era businesses added 336,000 jobs to the U.S. economy, a new study finds.

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📚 Dive A Bit Deeper 📚

Three Essential Startup Tips

Building an early-stage startup causes questions to zoom around founders’ heads constantly. Some notable ones include Answers to these questions are often gained through trial and error, hard lessons learned through mistakes, and sometimes failures. It can be rewarding as much as it is exhausting.

Entire bookstore sections can be filled with startup life lessons (and some are). We know founders have so little time as it is to research life tips, so here are three pretty great ones gathered by Technical.ly from the How Startups Get Started event at Johns Hopkins University’s Pava Marie Lapere Center for Entrepreneurship:

1. Acknowledge that success is not guaranteed

   • Success can look different for every startup. But founders know all too well that finding success as a startup can be a rocky road that sometimes ends in failure. Acknowledging that possibility is not only practical, but it can help founders take accountability for mistakes without derailing the startup’s journey. As Steve Iannelli, a panelist at the event, said, “Working at a startup is a ‘constant balancing act between arrogance and humility.’”

2. Address conflicts as they come with compassion

   • As much as founders want to prepare for every conflict that arises in their startups and among their employees, this is pretty much impossible. There will always be issues that arise without warning, but being proactive in response to them makes all the difference. Moderator Margaret Roth recommended the SWOT (strengths, weaknesses, opportunities and threats) method for assessing a problem and how to handle it.

3. Get creative in the hiring process

   • Bringing in more talent is a key part of the startup journey. Panelists at the How Startups Get Started event recommended that founders implement questions extending past work. For instance, Amanda Allen from Scene Health asks candidates, “What are you really good at that you don’t want to do again?” When he was on the other end of the hiring process for his startup, Iannelli stated that he liked it when interviewers focused on how he would handle hypotheticals over just looking at his portfolio.

Please follow our friends at Jamaica Bay-Rockaway Parks Conservancy for updates on their work improving public parklands throughout New York’s largest tidal estuary, and partnering with technologists on nature-based solutions for our climate crisis — including an initiative to build a climate tech hub at Floyd Bennett Field.

Deep Dives Galore

↔️ SWIPE FATIGUE — Modern dating has been defined by the swipe model, pioneered by Tinder, Bumble, Hinge, and Grindr. Not so much anymore. Swiping to find a potential partner has become unpopular among Gen Z. A market gap for dating apps that promote face-to-face connection? Say less to the new class of dating app startups.

📊 KEEPING UP WITH THE KPIs — There are a lot of KPIs out there that startups can use to track their performance, set goals, and paint a picture of their business progression. Startups don’t have to make spreadsheets for every KPI imaginable, but they do need to know how to set them and understand their value.