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What seed-stage dilution tells us about changing investor expectations

What seed-stage dilution tells us about changing investor expectations

July 16, 2019

Round sizes are up. Valuations are up. There are more investors than ever hunting unicorns around the globe. But for all the talk about the abundance of venture funding, there is a lot less being said about what it all means for entrepreneurs raising their early funding rounds.

Take for instance Seed-stage dilution. Since 2014, enterprise-focused tech companies have given up significantly more ownership during Seed rounds. What gives?

Scale is an investor in early-in-revenue enterprise technology companies, so we wanted to better understand how this trend in Seed-stage dilution impacts companies raising Series A and Series B rounds.

Using our Scale Studio dataset of performance metrics on nearly 800 cloud and SaaS companies as well as Pitchbook fundraising records covering B2B software startups, we started connecting the dots between trends in valuations, round sizes, and winner-take-all markets.

Bottom line for founders: Don’t let all the capital in venture mislead you. There’s an important connection between higher Seed-stage dilution and increased investor expectations during Series A and Series B rounds.

These days, successful startups are growing up faster than ever.

Founders face an important trade-off decision

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The 4 Entrepreneur Personality Types

July 15, 2019

There are so many misconceptions, stereotypes and blatantly wrong factual information floating around that its no wonder all entrepreneurs get slapped with a bad reputation label. The discrimination runs deep but thanks to a swift and positive upswing in the dominant demographical markets, these ideals are rapidly changing for the better.

We’re not all bohemian, airy-fairy, dream-chasers, who will likely crash and burn. If that’s what you believe, I’m here to tell you that you’ve got it all wrong. Until recently, everyone from financial lenders to the tax man treated the entrepreneur with an underlying tone of distrust or at least with caution tape.

All hail the Boomers and Millennials for infiltrating the entrepreneurial world with gusto. These demographic markets are not only the dominating force in society at the moment (dictating the sway of masses), they’re also embracing the need to create and build their own future, forge their own path, and the cherry on top is their seemingly innate ability to do so. As if they were born for this moment in history. As Amazon gobbles up retail and corporate America, the “new kids in town” aren’t hesitating to reinvent the wheel.

What to expect

  • Debunking Entrepreneurship Myths: Here we will debunk the stigmas and taboos surrounding entrepreneurialism that have society at large believe the self-employed are crazy risk-takers with no sense of direction or real purpose.
  • Substitute Risk with Truth: Find out what it means to be an entrepreneur and what it takes to be successful. It’s not about chasing a whimsical idea. It can be a sound, solid, executable and fulfilling opportunity to live your truth, instead of someone else’s.
  • Bring Your Gifts to the Table: Being an entrepreneur isn’t only for the hard-core risk-takers or risk-seekers who live for the thrill of the experience. Nor,
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Three Leadership Podcasts You Should be Listening to

July 15, 2019

We’re neither here nor there; we’re on our way from one point to another, usually sitting in traffic, reading email on a train or bus, or simply zoning out in the back of a shared carpool.

In my opinion, this in-between time offers the perfect opportunity to brush up on your leadership skills, take on a fresh perspective, and really dig deep into the things that matter the most to you in business. The best way to do that is to find some great podcasts to listen to as you shuttle from one place to another.

Podcasts are booming

You have probably overheard all of your coworkers and friends talking about podcasts lately. That’s because podcasts have seen a significant uptick in popularity in the last few years. 

Podcasts are easily consumable when you are on the go. Whether you have 15 minutes or an hour-and-a-half, you can find a podcast that will meet your needs, feed your interests or teach you something new.

Podcasts also fit comfortably into our busy daily lives. On your way to pick up the kids after work? Listen to part of a podcast. Waiting for your train from the city? Dive into that article you couldn’t read by listening to the interviews on a podcast. Anytime you want to make the most of that in-between space, you can just plug in a pair of headphones or connect your smartphone to your car and take advantage of any sort of downtime you might have. You can choose an educational podcast, something light and funny, a dark mystery, or something that lifts your spirits. It all depends on how you want to spend your time.

Podcasts have also begun to help build communities of people who share similar passions and interests. In an increasingly separated, divided, …

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Expand Internationally By Leveraging Local PEO Services

July 10, 2019

• A PEO can assist you with payroll, benefits and human resources support for your business
• PEOs take care of your overseas human resource requirements through a co-employment model
• A PEO can take care of the needs of your staff abroad and make sure your business stays compliant.

Through a co-employment model, these organizations offer comprehensive human resource services abroad for business without a physical presence in the country. This is especially helpful for businesses who want to “dip their toe” in a new market but aren’t yet committed to building an office. Having flexible human capability in a new market can be the difference in your success.

Smaller business should look at what a PEO can bring to their work environment. Overseas employees can access benefits offered by (often larger sized) PEOs and have a localized support network. Understand what assistance you can find in a PEO and how they can support your business success.

What’s a Professional Employer Organization?

Professional Employer Organizations (PEOs) take care of your overseas human resource requirements through a co-employment model. They support smaller businesses seeking to employ people in a country they don’t yet have a physical footprint in. This enables businesses to focus on their core operations and staff at home.

Editor’s note: Interested in a PEO service? Fill out the questionnaire below to have our vendor partners provide you with information for free.


A PEO partner can pay your overseas employees’ wages on your behalf. They can also offer staff benefits offered in larger companies, such as health subsidies and training. Your business can relax about foreign tax and employment regulations; a PEO takes care of this too.

Working alongside a PEO

A PEO can take care of the needs of your staff abroad and make sure your business …

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6 Tips for Starting Your Own Independent Business

July 4, 2019

The independent workforce is composed of more than 41 million people working as contractors, consultants, freelancers, side-giggers and more. These independent workers provide specialized expertise to companies that are looking to bring staffing flexibility and in-demand skills to their business. Nearly two-thirds of senior executives today say their external workforce is essential for operating at full capacity and meeting demand.

While there are many benefits for companies who engage independents, there are equally as many advantages to starting your own independent business. You get to be your own boss, decide when and where you work, and effectively have limitless ability to earn and pursue a career you are truly passionate about. If you’re thinking of joining the independent movement, use these six simple tips to build a successful business.

1. Identify skills you can build a business around.

The first important step you’ll want to take is defining the services your business will offer. If you don’t already have an idea of what you want to focus on, think about what you like and don’t like to do at work and in your free time. This will help you narrow down your niche and find your individual, sellable talent.

Next, take some time to research the industry you want to focus on. What skills are in demand? How can your unique services be configured to meet the unmet needs of potential clients? Keep in mind that as a newcomer to this market you may need to build out your education. As you grow your business, consider looking at online courses, professional certifications, or classes at a local college that can lend credibility to your expertise. 

2. Write a detailed business plan.

Creating a business plan is a valuable exercise for anyone starting their own business because it requires you to …

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From seed to Series A: Scaling a startup in Latin America today

From seed to Series A: Scaling a startup in Latin America today

July 2, 2019

It’s not easy to raise growth-stage capital in Latin America, but it’s getting easier. As startups begin to flourish in the region’s largest markets, available funding is evolving to suit the needs of these maturing companies. However, Silicon Valley-style Series A rounds in Latin America are still rare, especially outside of Brazil and Mexico.

Even in Silicon Valley, only a small percentage of startups can bring together enough pieces to raise a Series A round. Jacob Mullins, a partner at Shasta Ventures, recently published an article on Medium on what it takes to raise a Series A round in San Francisco today, which inspired my take for the Latin American ecosystem.

In the piece, he lays out the table stakes for any startup looking to raise Series A capital, including product-market fit, a strong revenue model, 2x or 3x YOY growth, a data-driven go-to-market strategy, a compelling market opportunity, a great team and a great story. These prerequisites apply to startups anywhere in the world. However, if these requirements are the minimum needed for a Series A in San Francisco, startups outside of the Valley, including in Latin America, will have to work even harder.

Latin America’s exceptional growth in VC funding over the past 12 months speaks to the growing number of later-stage rounds startups are raising across the region. 2018 was Latin America’s inflection point for startups, with four big trends:

Record-breaking rounds: Mexico’s Grin Scooters raised Latin America’s largest seed round, and Brazilian bike and …

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Demo your startup at TC Sessions: Enterprise 2019

Demo your startup at TC Sessions: Enterprise 2019

July 2, 2019

Every year hundreds of startups launch with dreams of becoming the next enterprise software unicorn. And it’s no wonder, given the $500 billion market and the rate at which the enterprise giants snap up emerging players. If you’re the founder of an early-stage enterprise startup, join us for TC Sessions: Enterprise in San Francisco on September 5 at the Yerba Buena Center for the Arts.

Even better, grab the opportunity by the horns and buy a Startup Demo Package. There is limited space available. This is your chance to plant your company in front of some of the most influential enterprise movers and shakers — we’re talking more than 1,000 attendees. Demo tables are reserved for startups with less than $3 million in funding and are available for $2,000, which includes four tickets to the event.

This day-long intensive event features speakers, panel discussions, demos, workshops and world-class networking. Get ready for a head-on, hype-free exploration of the considerable challenges enterprise companies face — regardless of their size.

TechCrunch editors will interview founders and leaders from both established and up-and-coming companies on topics ranging from intelligent marketing automation and the cloud to machine learning and AI. And they’ll question enterprise-focused VCs about where they’re directing their early, middle and late-stage investments.

The full roster of speakers is still to be announced, but here’s a quick hit of who you can expect at TC Sessions: Enterprise.

You’ll hear from Scott Farquhar, co-founder and co-CEO of Atlassian, a company that’s changed the way developers work. Want to hear more about enterprise and the cloud? Snowflake’s co-founder and president of product, Benoit Dageville, will be on hand to talk about the company’s mission to bring the enterprise database to the cloud.

Have someone you want to hear from our stage? …

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When is the right time to pitch VCs for funding?

When is the right time to pitch VCs for funding?

July 2, 2019

A compelling pitch deck that quickly and clearly presents your startup as an exceptional investment opportunity is a clear edge when raising a round.

But could fundraising be more effective if you knew when to send your pitch deck – the times of year when it’s more likely to be reviewed and when it’s likely to be viewed more often?

If we all had a magical algorithm that could predict exactly which investors would review your deck and when, we’d be fundraising geniuses — closing our round faster and with far less effort.

No such algorithm exists (at least not yet), but I can share some useful data that offers insights into some of these seasonal fundraising trends, with a few that seem to defy conventional wisdom.

The data included in this research came from companies that explicitly opted in to participate by responding to an automated email sent to them. We are incredibly appreciative to these founders for making this research possible. You can read more about our startup opt-in process and other aspects of our methodology here.

What are the best times of year to share your pitch deck with VCs?

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Is My Business Idea Good Enough?

June 27, 2019

Maybe it’s a passion project or something that can fill a void in the market. Whatever it is, before you start pursuing your new great idea, it’s important to make sure it’s strong enough to withstand the trials and tribulations that come with starting a new business. [Related article: How to Take the First Step Starting a New Business]

Entrepreneurship can be incredibly personal and all-consuming in that you are pouring significant amounts of time, money and energy into one idea. Naturally, you want to do all that you can to ensure that idea is worth your while before you start a business. spoke to business experts and experienced entrepreneurs to see what you can do to make sure your business idea is worth executing, and how to know when it’s time to let it go.

Validate your idea

The first, and most important, step – once you have a business idea – is to go through the validation process. The exact process differs depending on what your business idea is, but, generally, you’ll want to start by asking yourself the following questions:

  • Is there a real need? Does my idea solve a real problem?
  • Will people buy it?
  • Will I be profitable?
  • How many people will want my product/service?

You need to make sure that you have a product or service that people want and are willing to pay a reasonable amount for. If neither of these is true, it will be disastrous for your business.

This step is where you conduct the bulk of your market research, comparing your product or service to existing ones in the market and sending surveys to your target audience to see where they feel the market is lacking.

You should also investigate the competition and make sure that …

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Confessions of an Entrepreneur: How a Passion for Work Defines One Healthcare App

June 25, 2019

With 15 years of experience in the medical industry, Jillian Bridgette Cohen wanted to build a wellness platform that would be available to clients anywhere and at any time.

That was the inspiration for Virtual Health Partners. Having created both a web and mobile app for the platform, Jillian understands the importance of technology as we go about our day-to-day lives.

Q: What devices do you use daily?

A: You would assume that a tech entrepreneur would list a variety of technology devices that are in daily rotation. However, Jillian keeps it simple, and a little surprising. “Other than my old-fashioned coffee maker, I,  of course, use my cell phone daily,” said Cohen. said, “And I am obsessed with tracking my steps and MapMyRun.”

Image courtesy of Jillian Cohen

Q: What technology do you use to get ahead of your competition?

A: Developing Virtual Health Partners meant keeping an eye on the future.

“Virtual Health Partners (VHP) is a technology company that offers a SaaS and PaaS solutions to support live virtual fitness, nutrition and lifestyle modification within a contained ecosphere of on-demand support,” said Cohen. “VHP’s platform is hosted on cloud-based servers to meet the growing needs of our business and provide reliable security in the ever-changing cyber universe.”

Adopting a future-forward approach with doesn’t end with planning for scale.

Jillian points to recent platform enhancements as an example. “We recently launched a platform update that uses artificial intelligence (AI) to push personalized content to users based on their needs, goals and preferences, streamlining their interactions for an improved user experience. The launch of AI also enables enhanced user engagement, more intuitive goal-setting and tracking, and advanced analytics. AI is a powerful tool, and we’re working to harness this power in a way that can significantly improve the …

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