TechCrunch+ roundup: Deep tech fundraising, negative trade secrets, 3 metrics investors love

Startup board meetings are scheduled several weeks apart, but many founders work until the last minute on the deck updating investors on revenue, the product pipeline, hiring and other essential matters.

In this environment, founders who try to “bright side” their numbers into a positive narrative will lose credibility.

It’s nice to think so, but you can’t present a detailed plan that will save the day — there are simply too many factors outside of your control.

The best move is to make a directional plan, but to craft one, you’ll first need a firm handle on the KPIs your investors are considering before your next fundraise.

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In a detailed post that includes formulas and benchmarks for calculating incremental profit margin, pre-S&M profit margin and cash burn efficiency, Paris Heymann, a partner at Index Ventures, offers an investors’ perspective on the metrics that matter most.

“In strong macroeconomic times, these metrics can go overlooked and underappreciated, but they are now important as capital efficiency has returned as a critical strategic priority for nearly all companies,” he writes.

Thanks very much for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

Failures are valuable IP: Protect your startup’s negative trade secrets

Patent applications and GitHub Codespaces are obvious pieces of intellectual property but so are the embarrassing mistakes and dead ends that every company encounters.

Rivals can learn a lot from your failed A/B tests, unsuccessful email campaigns and wasted engineering cycles, write Eugene Y. Mar and Thomas J. Pardini, attorneys with Farella Braun + Martel LLP in San Francisco.

In this post, they offer advice for safeguarding your “negative know-how,” along with general tips for defining and managing trade secrets.

A VC’s perspective on deep tech fundraising in Q1 2023

I learned something today: Successful deep tech startups and SaaS companies generally reach billion-dollar valuations in the same time frame.

“The median deep tech startup took $115 million and 5.2 years to become a unicorn,” according to Karthee Madasamy, managing partner at MFV Partners.

New companies in this sector raised around $600 million last year, a steep decline from $800 million in 2021. But Madasamy says recent climate regulation, automation and space are just a few factors stirring investors’ interest during this downturn.

“As it becomes increasingly difficult to realize big exits in the years ahead, the technologies within deep tech that are transforming entire industries offer some of the only paths to ’10x exits.’”

4 investors discuss the next big wave for alternative seafood startups

There’s a lot of hype around plant-based burgers and nuggets, but alternative seafood products are attracting more attention — and funding — from investors these days.

“More than $178 million was pumped into alternative seafood in the first half of 2022, and the market’s value is poised to reach $1.6 billion over the next 10 years,” Christine Hall reports.

To learn more about this growing space, Christine surveyed four investors to get their thoughts on regulation, the “unique challenges” companies face as they try to reach scale and how they’re approaching growth and risk:

• Kate Danaher, managing director, S2G Ventures Oceans and Seafood
• Friederike Grosse-Holz, director, Blue Horizon
• Christian Lim, managing director, SWEN Capital Partners’ Blue Ocean
• Amy Novogratz, co-founder and managing partner, Aqua-Spark