gotechbusiness.com+ Roundup: Thorough Due Diligence, Early Q1 2023 VC Results, Flying Lessons for Angels

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Becoming an angel investor isn’t easy – and that’s on purpose.

Those claiming the title must meet some income and licensing requirements. If not, almost anyone can schedule Zoom calls with founders to talk about making their dreams come true.


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Business schools teach the basics, but Mysty Rusk, who has reviewed some 4,500 deals over the past 20 years, says the most important lessons she learned were the result of mistakes she made along the way.

“There may be no way to foresee a global crisis, a stealth competitor, or other risks completely beyond the startup’s control,” writes Rusk, “but some obstacles are avoidable with the right knowledge.”

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Walter Thompson
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@your protagonist

Contents

Investors want the best ESG data. Here’s how to give it to them.

Digitally generated image of multiple environments in a pie chart.  Investors want the best ESG data.  Here's how to give it to them.

Image Credits: Andriy Onufriyenko (Opens in a new window) /Getty Images

The potential of environmental, social and governance (ESG) investing remains largely untapped: a PwC study published last year estimated that ESG assets under management will grow 84% between 2021 and 2026 to $33. 9 trillion.

“There simply aren’t enough entrepreneurs offering enough ESG-aligned investment opportunities,” said T. Alexander Puutio, an adjunct professor at NYU Stern.

In this comprehensive article, Puutio provides an overview of ESG disclosure frameworks, including action points for startups hoping to be acquired or go public.

For in-depth due diligence, minimize disruption to maximize success

Ringing purple alarm clock on pink background.  For in-depth due diligence, minimize disruption to maximize success.

Image Credits: Vectoric (Opens in a new window) /Getty Images

Assembling a legitimate data room for due diligence is no small feat—stakeholders from multiple departments must contribute reams of documents and update them regularly.

“If you’re not careful, you could face delays, or worse, investors pulling out at the last minute,” said Denis Shafranik, co-founder of startup Concentric.

“That means focusing not just on succeeding, but on minimizing disruption to your team and growing your business.”

Drawing on his experience helping portfolio companies, Shafranik offers suggestions for managing scope of work, soliciting investor feedback and mastering narrative.

Risk banking revolution can help us get back to basics: efficient growth

A container vegetable garden, back to basics, efficient cultivation.

Image Credits: Xiuxia Huang (Opens in a new window) /Getty Images

The ongoing recession hitting public and private startups can also be described as a market correction.

“The reality is that most founders and venture capital funds don’t know what the market price is in terms of startup valuations right now,” writes Jump Capital co-founder Sach Chitins.

For many early-stage startups, sustainable growth may be more important than fundraising right now, as so many venture capital funds adjust their risk tolerance simply by deciding not to invest.

“Resetting expectations to match market reality helps set the tone for operating within the market environment,” says Chitins. “It’s time we go back to basics and build more efficient businesses.”

Are solo GPs screwed?

A classic snowman built and photographed on the dry bottom of Cuddyback Lake in the Mojave Desert, California, USA.  Taken on a Canon 1DS Mark II.

Image Credits: Stephen Swintek (Opens in a new window) /Getty Images

There’s been a lot of talk lately about founders not yet fitting into the product market and under pressure to return cash to investors. But what about the general partners who send money back to their LPs?

Now that “the business math has changed,” Natasha Mascarenhas spoke to solo GPs who have returned money to their limited partners, or in one case urged them to cancel their subscriptions.

“I can’t imagine an institutional LP will be so open-minded as to invest in a single person doing much on their own without a team or partnership model,” said Sahil Lavingia, CEO of Gumroad.

Q1 VC results are treading water, but that’s cold consolation for SaaS unicorns

an isometric illustration for The Exchange, shown in blue

Image Credits: Nigel Sussman/gotechbusiness.com

As Q1 2023 draws to a close, Alex Wilhelm reviewed early data from PitchBook to get a feel for key VC trend metrics, such as number of deals and total capital invested.

“The picture emerging from Q1 2023 enterprise data is one of measured decline compared to the end of 2022,” he found.

“And March brought what appeared to be a boomlet in domestic business activity, which could be an even better place as the latest bits of Q1 data further bolster the month’s totals.”