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How to pick an investor in good or bad times


How to pick an investor in good or bad times – TechCrunch

Trust your instincts — you’re hiring your next boss

In 20 years of working for startups, I’ve never seen as many plot twists and turns as I have in the last several months. Times are tough.

But, from the perspective of raising capital, 2020 has not been an awful time to be a startup founder. The world has changed, but the fundamentals of raising capital are the same. In the first half of the year, VCs invested $129 billion, and Q3 is up 9% year-over-year, reports Crunchbase.

After the screeching halt to business in April subsided, founders and investors, people who are generally comfortable with uncertainty, got back to work raising and investing.

Choosing the right VC is one of the most important decisions startup founders will make. In good times, the choice can make or break a startup. When times are bad, it’s even more likely that the wrong VC partner could be the catalyst that starts a downward spiral. With many funds still looking to make investments before the end of the year and startups jockeying for cash, founders need to know how to find the right investor.

With many funds still looking to make investments before the end of the year and startups jockeying for cash, founders need to know how to find the right investor.

It’s not about simply choosing an investor — you are hiring your next boss. The investor should be someone you feel comfortable working with and working for.

You don’t want an investor who is checked out, but too much focus isn’t good, either. And, you don’t want an investor who is completely agreeable since your best outcome will be driven by a constructively demanding advisor.

My company, Quiq, had several term sheets when the dust settled on our Series B pitch meetings. Since the financial terms were similar, selecting an investor was made on a more subjective basis and boiled down to two fundamental questions:

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and Wish price their debuts as the 2020 IPO cycle slows”,”content”:{“rendered”:”

Today we’re digging into the IPO pricing of Upstart and Wish, perhaps the final fintech and e-commerce debuts of the year. Both unicorns priced last night and will begin trading this morning.n

But first, a programming note: The Exchange will publish through next Tuesday before taking a break until 2021; the last newsletter of the year will go out this weekend. And, just while we’re here, Equity will continue to drop, with some special episodes being compiled this week.n


n

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.n


n

Ok, enough with all of that! For what could be the very last time this year, let’s discuss IPO pricing and what the public market is telling us about these two offerings.n

""Recall that we are in the wake of three IPOs that performed so insanely well that two anticipated debuts — Affirm and Roblox — decided to delay going public until they could get more confident about their pricing. So, Upstart and Wish had bonkers pricing runs, right?n

No, as it turns out.n

What is this middle-of-the-road pricing?n

I forgive you if you’ve gotten so accustomed to IPOs raising their range and pricing above the boosted interval that you’ve forgotten that it doesn’t always happen. Because it doesn’t always happen.



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