If someone said “start up” while we were playing a word association game, I would respond with “fundraising.” (I bet you would too.)

Asking people for money is an important part of any founder’s journey, but Collin Wallace, CEO of Techstars, says it can also “precipitate your demise.”

For example, raising a round to revitalize engineering, sales and marketing sounds positive, but what if the company itself has a negative unit economy?

Full australiabusinessblog.com+ articles are available to members only
Use discount code TCPLUSROUNDUP to save 20% on a one or two year subscription

“Most of the time, it’s not a lack of cash that gets in the way of a company and its ability to achieve scale,” Wallace writes in TC+.

“It is better to ask: do we have crowding problems? Product problems? Process problems? People problems? Is my business model fundamentally flawed?”

In this article, he examines four scenarios that often lead entrepreneurs to look for new money and explains why it is much more important to “get a clear picture of what is causing losses”.

Thank you for reading,

Walter Thompson
Editorial Manager, australiabusinessblog.com+
@your protagonist

Software investors should (re)learn these 3 ideas before getting into deep tech

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

As VCs have “turned software investing into a low-margin financing game,” it could be a net positive that so many are “unable to move forward and invest in the next big thing: deep tech,” according to Champ Suthipongchai, co-founder and general partner at Creative Ventures.

A SaaS mindset is simply irrelevant to deep tech investing, meaning traditional VCs need to recalibrate their behavior (and expectations) before diving in.

“The first software investor mantra just doesn’t make sense in the world of deep tech,” Suthipongchai writes.

“This kind of magical thinking is exactly why their software playbook is doomed to fail.”

Blank Street cracked the code to make coffee shops attractive to VC

Image Credits: Getty Images

Tech investors don’t tend to back brick-and-mortar companies because they have so many literal moving parts: SaaS startups can’t get a flat tire or fail a health inspection, and they certainly don’t need foot traffic.

“But Blank Street claims to have cracked the code to allow a chain of more than 65 brick-and-mortar coffee shops to have the right metrics to attract venture capitalists,” writes Rebecca Szkutak.

“They recently closed a $20 million Series B round in a year where fundraising has taken a nosedive — even for companies with low overheads.”

Ask Sophie: Can I start a startup if I’m in the US on a student visa?

Image credit: Bryce Durbin / australiabusinessblog.com

Dear Sophie,

I just found out that I have been accepted into an American university, which was my first choice!

One day it would be my dream to create my own startup in the US. Is there any foundation I can lay to make my dream come true?

— Future-oriented founder