Welcome to Startups Weekly, a human-centered look at the week’s startup news and trends. Subscribe here to receive this in your email. In the early-stage market, there’s a battle brewing. In one universe, late-stage investors are rushing to the early-stage investing sector in response to tech stock market crashes, compelling seed investors to move even earlier to protect their ownership and prospective rewards. Firms like Andreessen Horowitz, which launched a pre-seed program months after announcing a $400 million seed fund, exemplified this trend. Furthermore, Techstars, a startup accelerator that was founded to assist firms get off the ground, has developed a fund to support companies who are too early for its typical programming.
Early-stage investors are experiencing a valuation correction and portfolio markdowns while all of this is going on. Some admit to instructing portfolio businesses to emphasize on cash conservation, profitability, and discipline rather than merely expansion. Let’s imagine that these two universes are part of the same universe: Early-stage investors are becoming more disciplined and cash-rich, but the earliest investors are exiting the market sooner. Founders are being pushed to be lean and green by investors, who are also paying them $10,000 to take a week off and try their hand at business.
CEOs’ new top goals are growth, gross margin, and burn, while venture capitalists are demanding to contribute more cash, earlier, in newly developed subcategories of early-stage investing. That’s a lot going on at once, and it worries me about the race to the bottom — or the race to the early stage — and its repercussions. Read my TechCrunch+ essay “If the first investors keep going sooner, what will happen?” for further insights. We’ll discuss about Elon Musk-related news as well as news that has nothing to do with Elon Musk in this newsletter. You may help me out by sharing this message to a friend, following me on Twitter, or subscribing to my personal blog, as usual.
Let’s speak about Elon Musk for a moment. Elon Musk’s $44 billion bid for Twitter was approved this week, marking a watershed moment in digital history and an impending return to the private markets for a major social media platform, as I’m sure many of you are well aware. We compiled the complete timeline of Musk’s acquisition, from tweet to close, but keep in mind that the controversy is far from over – the deal has yet to finish. Here’s why it matters: For once, this format doesn’t work because there are just too many reasons why Musk’s purchase of Twitter is significant. Instead, I’ll just highlight some of the specific perspectives that TechCrunch looked at in bullet form.
