You don’t have to move to San Francisco to launch a Startup, but there are some advantages to working here: mild climate, natural beauty, great food, and, of course, the highest concentration of venture capital in the world.

Y Combinator Demo Day took place this weekAnd while the event itself was virtual-only, 86% of the founders of YC’s winter 2023 batch lived in San Francisco while participating.

The continued rise of AI is a contributing factor: 54 of the 282 companies in this cohort “are specifically building generative AI startups,” reported Natasha Mascarenhas.

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In keeping with tradition, the TechCrunch staff picked their favorites from the latest batch.

Please note that these are for entertainment purposes only as “we are not offering investment advice or recommending anyone join or endorse a new company.”

Thanks so much for reading. Have a great weekend!

walter thompson
Editorial Manager, TechCrunch+
@yourprotagonist

VC to remarket startups: Let’s pop some labels

Thanks in large part to Gen Z’s interest in sustainable shopping, e-commerce is rocketing to new heights, and venture capitalists are looking to make it happen.

Since Etsy went public in 2015, companies like Poshmark, The RealReal, and thredUP have followed suit, drawing even more investors into the industry. Last year, VCs flowed roughly $6 billion to reselling platforms, according to Brian Schwarzbach, an investor at Cathay Innovation.

In a post for TC+, he explores three areas of re-trading that are attracting interest from venture capitalists and shares “some food for thought for founders building startups in this (re)emerging space.”

Funds offering ‘friends and family’ checks could bring the change underrepresented founders need

America’s longstanding wealth gap between black and white households contributes to a lack of diversity among startup founders.

The median net worth for a black family in the US is $3,630, but that number rises to $79,000 for a white family. As a result, “the average black founder raises less than about $1,000 from family and friends,” reports Dominic-Madori Davis.

Since the average friends and family round is $23,000, they “would have to insure the entire liquid wealth of six black families” for parity, according to a white paper from the Fifth Star venture fund.

Launch Pad Teardown: Smalls’ $19 Million Series B Deck

Smalls subscription cat food startup has raised $34 million since launching in 2017.

Now the company has 50 employees, plans to open a cat cafe, and is considering expanding into retail. Its founders shared their Series B deck with TC+, minus “specific details of the company’s valuation and current revenue.”

• deck slide
• market slippage
• problem slide
• Mission slide (“We are here to make 9 lives 10”)
• competition slide
• product slide
• how slide works
• Why now interstitial slide
• Business Metrics Slide
• milestones slide
• team slide
• Use of Funds Slide
• Performance Interstitial Slide
• ACC Slide
• Go to market/growth channels slide
• Value Proposition Slide
• Abandonment Analysis Slide
• LTV slide
• Interstitial Slide Future Plans
• Market Extension Slide Part 1
• Market Extension Slide Part 2
• LTV Extension Slide
• The Ask and Hit Milestones Slide
• thank you slide

As YC launches a new batch, here’s how the early-stage venture market is faring today

Drawing on data from Carta’s “First Cut: State of Private Markets: Q1 2023” report, Anna Heim and Alex Wilhelm broke down the numbers to get a sense of the early-stage VC landscape.

Factoring in “average round sizes and deal values,” they found that pre-money valuations for early-stage startups fell slightly, but Series A, B, and C rounds “seem to show signs of recovery”.

What is a fair price premium for startup stock?

A market update report from Redpoint Ventures contains information for Series B and C founders planning to raise funds this year, writes Alex Wilhelm.

“Today’s mid-stage startups still seem pretty expensive,” he writes. “Either the stock market needs to get some of its juice back, or home prices need to fall further to get things back to ‘normal’.”

6 Common Challenges Cybersecurity Teams Face and How to Overcome Them

Cybersecurity product teams operate under unique pressure, according to investor Ross Haleliuk.

It’s not just that they’re working in a crowded market: “It’s an incredibly dynamic space with the landscape sometimes changing overnight.”

With many startups lacking frameworks for building customer relationships and refining model metrics, Haleliuk, who is also a product manager at his own company, shares tactics that will help security vendors “better understand their target market.” and the kind of solutions they are looking for.

Ask Sophie: How do we transfer H-1Bs and green cards to our startup?

Dear Sophie,

I was recently laid off.

I co-founded a clean tech startup with two of my former colleagues, who were also laid off. Both of my co-founders have H-1Bs and had green cards in the pipeline with our old company. I am a US citizen.

What do we need to do to transfer their H-1Bs and green cards to our startup? In your experience, do investors care how much money a startup spends on visas and green cards for its founders?

— First-time founder

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