TechCrunch+ roundup: Venture debt VC survey, PLG boosting tactics, bootstrapping to $40M ARR

How many paying customers do you have, and how long are they locked in?

Annual recurring revenue (ARR) has always been a key metric, but with valuations down across the board and new money too tight to mention, it’s now a lodestar — especially for self-funded startups.

Hotjar CEO Mohannad Ali wrote an article for TC+ laying out four principles from his bootstrapped company’s product-led growth strategy that helped them “move quickly and pivot regularly.”

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Early-stage startups often feel the need to go big or go home when it comes to marketing, but “you’ll need to create your own demand to get the ball rolling,” says Ali, who describes several tactics they used to “generate scarcity and demand” while engaging early adopters:

• When beta testing, don’t start with a finished product
• Don’t set prices too low
• Keep launch marketing costs as close to zero as possible
• Early users are members of your product team

“Ultimately, building a successful startup through bootstrapped efforts is no easy feat, but it can be incredibly rewarding if you do it right,” writes Ali.

Thanks for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

5 ways SaaS companies can level up their product-led growth

Ever found yourself riding in someone else’s car, feeling unsafe and clutching the grab-handle above the passenger seat?

For startups that are still searching for product-market fit, marketing can be a grab-handle. Similarly, spending precious cycles developing new features for specific customers is another form of superstitious behavior.

A study that looked at more than 30,000 SaaS companies found five key drivers for optimizing product-led growth strategy. Your first order of business?

Fix the leaks in your funnel, advises Christian Owens, executive chairman and co-founder of Paddle.

“This can account for 20-40% of your overall churn rate and is usually to do with failed payments, meaning that leveling up your billing processes should be a top priority.”

Ask Sophie: Which visas are best for US startup accelerators?

Dear Sophie,

I co-founded a startup last year, and my co-founder and I were just accepted to an accelerator program in the United States!

What type of visa can we get to come to the U.S. that allows us to stay there so we can grow our startup after the accelerator ends?

— Jazzed in Johannesburg

The new rules of venture debt are already being written

Initially, venture debt was a way for new companies to acquire essential hardware before they had enough revenue to write checks for desks, chairs and copying machines.

Today, early-stage startups use it to gain liquidity, borrowing against their next funding round or future earnings, but after the failures of First Republic and Silicon Valley Bank, Rebecca Szkutak interviewed several investors who all “agreed that it would get more expensive in the future.”

5 investors discuss what’s in store for venture debt following SVB’s collapse

Rebecca Szkutak surveyed five investors from “different fund sizes, stages and focus areas” to learn more about how they’re advising founders regarding venture debt and “which kinds of startups are best suited to this form of financing:”

• Sophie Bakalar, partner, Collab Fund
• Ali Hamed, general partner, Crossbeam Venture Partners
• Simon Wu, partner, Cathay Innovation
• Peter Hébert, co-founder and managing partner, Lux Capital
• Melody Koh, partner, NextView

Without Black representation in climate tech, ‘the planet will burn’

African-Americans are underrepresented across every sector of tech, but an analysis by Dominic-Madori Davis and Tim De Chant found that “U.S.-based Black climate tech founders received only 1% of all capital invested in climate tech startups” in 2022.

“That’s $214 million out of $21.5 billion,” which is in line with overall funding levels for Black founders. Regardless, “the lack of funding and dearth of DEI data suggests that the venture community writ large is overlooking a vast amount of untapped potential.”

Emerging managers shouldn’t rush a first close – even in this market

Faster is not always better, especially when it comes to raising venture capital.

In this climate, it’s easy to see why emerging managers might want “to hold a first close as soon as LP capital is in the door,” writes Rebecca Szkutak. “But that may not be the best strategy in the long run.”

Although a first close starts the clock on collecting management fees, it’s better to have some deals in the pipeline and a detailed strategy for future fundraising first.

“If you set a date, you will miss it,” said Kari Harris, a partner at law firm Mintz. “You will retreat and have to go back to the market, and it will look like you failed.”

Pitch Deck Teardown: Ageras’ $36M Private Equity deck

For a change of pace, Haje Jan Kamps analyzed a winning pitch deck for a late-stage startup: Copenhagen-based Ageras, a fintech platform that serves small businesses.

The partially-redacted 31-slide deck reflects the complexity of “a 300+ person company with a global footprint,” writes Haje:

1. Cover slide
2. Slogan slide
3. Overview slide
4. Products overview slide part 1
5. Products overview slide part 2
6. Traction slide
7. Customer growth slide
8. Products interstitial slide
9. Product breakdown slide
10. Product: Marketplace overview slide
11. Product: Marketplace “how it works” slide
12. Product: Accounting & admin software introduction slide
13. Product: Banking introduction slide
14. Product: Financing introduction slide
15. Target customer slide
16. Market-size slide
17. Problem slide (“SMEs struggle to get financing”)
18. Solution slide
19. Go-to-market slide
20. Mission slide
21. Strategic focus area slide (redacted)
22. Product roadmap slide (redacted)
23. Acquisitions slide