Matt Barbieri has been helping startups with their accounting and finances for about 20 years, and he says he’s never experienced the discomfort of 2022.
“With inflation, repricing, problems hiring — there are so many things up in the air … that could further inhibit the market from doing deals,” says Barbieri, a CPA and partner who, along with some 125 founders at the consulting firm Wiss works. “There is just a lot of concern.”
Although there may be a lot of hesitation, all founders get the same kind of advice: Cut costs. But that’s easier said than done—where to cut first?
The quick, immediate response is for startups to look at cutting their marketing and development costs, according to Barbieri. “It’s truly universal,” he says. After all, it’s easier to cut a line item than to go to internal headcount. But it doesn’t always turn out that way. It can be very difficult to measure the key drivers of sales at an early stage company, so some founders step back to take a more analytical approach.
Here’s where startup founders say they cut the most costs, based on a study sponsored by Wiss that polled 125 founders:
Business backers are also looking for alternative sources of capital to keep the lights on, whether from banks or even family members. Here’s where they’re looking for cash:
In general, founders may be better positioned. A majority of them have less than six months’ worth of cash on the balance sheet, according to Wiss’ research. And founders should heed recent memory: At the onset of COVID, many startup lenders suddenly stopped lending to early-stage companies, Barbieri recalls, and companies had to scramble to figure out how to make payroll.
So far there are options. “I saw laps shrinking. I’ve seen term sheets disappear. But I’ve also seen how people work it out,” says Barbieri.
See you tomorrow,
Jackson Fordyce compiled the features section of today’s newsletter.
– Morse MicroA Sydney-based semiconductor development company, has raised $140 million in Series B funding. MegaChips Corporation led the round and was joined by investors including Blackbird Ventures, Main Sequence Ventures, Clean Energy Finance Corporation, Skip Capital, One seed, SpringCapital, Malcolm and Lucy Turnbull, and others.
– VaryoA Helsinki-based VR/XR hardware and software provider, has raised $40 million in funding. EQT Ventures, Atom, Volvo Car Tech Fund, Lifeline Ventures, Mirabaudand Foxconn invested in the round.
– EverphoneA Berlin-based B2B phone-as-a-service company, has raised $32.1 million in Series C expansion funding led by Cadence Growth Capital.
– ZineOneA Milpitas, Calif.-based marketing platform has raised $27.4 million in Series C funding. Signal Fire, Norwest Venture Partnersand others who invested in the round.
– 21.coA New York and Zurich-based provider of crypto access, has raised $25 million in funding. Marshall Wace led the round and was joined by investors including Collab + Currency, Quiet Enterprises, ETFS Capitaland Valor Equity Partners.
– Onion flowA San Francisco-based no-code app building and scaling platform for businesses, has raised $15 million in Series A funding. Addition and Transpose platform led the round and was joined by investors including Together Fund and other angels.
– Certify OSA New York-based intelligence platform for healthcare providers, has raised $14.5 million in Series A funding. General Catalyst led the round and was joined by investors including Advance enterprises, Max Venturesand Architect Ventures.
– ChargezoomAn Irvine, Calif.-based billing and integrated payments platform has raised $10 million in Series A funding. Panoramic Enterprises and Softbank Opportunity Fund led the round and was joined by investors including SaaS Venture Capital, Stout Street Capitaland Okapi Venture Capital.
– D’Amelio Brandsthe Los Angeles-based business venture of the D’Amelio family, has raised $6 million in seed funding. Richard Rosenblattentrepreneur and business manager Michael Rubindeveloper and e-commerce entrepreneur Elena SilenokApple’s senior vice president of services Eddy CueCEO of Lions Gate Entertainment Jon Feltheimerand other angels who invested in the round.
– ZeetA San Francisco-based DevOps automation platform, has raised $4.3 million in seed funding. Sequoia Capital led the round and is at Race Capital.
– CEEZERA Berlin-based B2B carbon credit marketplace, has raised €4.2 million ($4.16 million) in funding. Carbon Removal Partners led the round and was joined by investors including Norrsken VC and Picus Capital.
–CorePower MagneticsA Pittsburgh-based magnetic solutions company for electric vehicles and the grid, has raised $2.5 million in pre-funding. Volta Energy Technologies led the round and was joined by investors including Evergreen climate innovations and Innovation works.
– Kudu Investment Management acquired a minority interest in Escalate Capital Partners, an Austin-based private credit and equity investor. Financial terms were not disclosed.
– Pentecost acquired a majority stake in Fowler high precision, a Canton, Mass.-based supplier and repairer of metrology equipment. Financial terms were not disclosed.
– Resurgens Technology Partners acquired a majority stake in nice, a software development platform. Financial terms were not disclosed.
– Church and Dwight obtain Hero CosmeticsA New York-based cosmetics company, from Aria Growth Partners for $630 million.
– Chase Corporation obtain NuCera Solutionsa developer and manufacturer of polymers and polymerization technologies in The Woodlands Township in Texas, of a subsidiary of funds held by SK Capital Partners for $250 million.
– Arcline Investment Management obtain Kings III of AmericaA Coppell, Texas-based elevator and pool emergency monitoring solutions provider, from Rockbridge Growth Equity and Thayer Street Partners. Financial terms were not disclosed.
– EagleTree Capital obtain MacKenzie-ChildsAn Aurora, NY-based home decor brand, from Castanea Partners. Financial terms were not disclosed.
– Sitio agreed to obtain Brigham MineralsAn Austin-based oil and gas mineral rights acquisition company, in an all-stock merger at about $1.5 billion.
– State farm agreed to invest $1.2 billion ADTA Boca Raton, Fla.-based security systems and service provider.
– Republic obtain SowersA London-based crowdfunding platform, for £86.5 million ($100 million).
– Drop Group obtain PhlyA New York-based social metaverse platform, for $25 million.
– HARMANa wholly owned subsidiary of Samsungobtain CARESYS, a Netanya, Israel-based vehicle passenger monitoring system developer. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
– Construction companiesA Boston-based venture capital firm, has raised $95 million for a seed-focused fund for Series A construction and real estate technology startups.
– Heavy bitA San Francisco-based investment firm, has raised $80 million for a fund focused on increasing its check size and portfolio support.
– Apogee capitalA New York-based alternative investment firm, hired David Fann as senior managing director and vice chairman. Before he was together Action.
– Construction companiesA Boston-based venture capital firm, promoted Heather Widman on partner.
– Clayton, Dubilier & RiceA London and New York-based private equity firm, hired David Winokur as a partner. Before he was together TowerBrook Capital Partners.
– DecibelA Palo Alto-based venture capital firm, hired Alessio Fanelli as a partner. Before he was together 645 Enterprises.
– Next Frontier CapitalA Bozeman, Mont.-based venture capital firm, hired Franz Kofler as a senior associate. Before he was together Aumni.
– OMERS InfrastructureA Toronto-based investment firm, hired Irini Kalamakis as senior managing director and global head of strategic partnerships. Before she was together IFM Investors.
– Pillar VCA Boston-based venture capital firm, hired Thomas de Vlaam as principal. Before he was together Flagship.