TechCrunch+ Roundup: How pitch decks fail, inside the AI hype cycle, budgeting for a downturn

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When I’m dining out in unfamiliar territory, I’ll usually find a restaurant on the beaten path — if a place has no customers, it makes me leery.

Tech investors have similar appetites when it comes to follow-on investment, writes Champ Suthipongchai, co-founder and general partner at deep tech VC firm Creative Ventures.

“Even the best efforts to estimate runway are often wrong,” and external factors like supply-chain issues, pending regulation and even a global pandemic are hard to account for.

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According to Suthipongchai, VCs who rely solely on a “spray-and-pray strategy” require a lot of luck and skill to succeed.

“Allocating for a follow-on investment provides a bridge to get your companies to the next financing round and position them for a strong negotiation.”

Thanks for reading,

Walter Thompson
Editorial Manager, TechCrunch+

Operational and finance tips for early-stage startups in a tough market

Laying off employees during a downturn will only get a startup so far. Unfortunately, many founders don’t even consider paring back on operational and financial expenses until it’s too late.

When it comes to extending cash on hand, everything from canceling subscriptions to “a hard pivot” must be on the table, says Ben Boissevain, founder of Ascento Capital.

“If a company has a limited runway, pursue multiple corporate finance options simultaneously. Do not pursue the next VC round, run out of money, and then try to pursue M&A,” he says, since “the process requires at least six months.”

Pitch Deck Teardown: SquadTrip’s $1.5M pre-seed deck

For our 60th Pitch Deck Teardown, travel-planning startup SquadTrip shared the unredacted $1.5 million pre-seed deck that helped the company secure a $6 million valuation:

• Cover slide
• “Where it all started” slide
• Problem impact slide
• Problem details slide
• Solution slide
• Market size and target audience slide
• Go-to-market slide
• Traction slide
• Business and pricing model slide
• Competition slide
• Team slide
• Ask and use of funds slide
• Summary slide
• Appendix cover slide
• Appendix I: Hiring roadmap slide
• Appendix II: Product roadmap slide
• Appendix III: Sales and marketing roadmap slide
• Appendix IV: Revenue projections slide

5 questions investors should be asking inception-stage generative AI founders

One week after unveiling his firm’s $250 million Mayfield AI Start fund, managing partner Navin Chaddha shared “the top five pieces of company-building advice” they’re giving to AI-first founders.

According to Mayfield’s thesis, these startups can be sorted into five layers:

• Applications and co-pilots
• Models
• Data
• Infrastructure
• Semiconductors and systems

“Paradigm shifts propel the rebuilding of the technology stack, creating new enduring companies in every era,” writes Chaddha.

Where founders go wrong with pitch decks

Because TC+ reporter Haje Jan Kamps is also a consultant for “VC firms, accelerators and startups,” he shared the 21 criteria he uses when evaluating pitch decks.

“To date, I haven’t worked with a founder who’s ticked all the boxes above and then failed to raise money,” he writes.

“Self-evaluating your pitch based on the points above is a great way to understand what your deck has, and what it’s missing.”

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Not all early-stage AI startups are created equal

It’s clear that AI is driving the latest hype cycle, but how are early-stage investors sorting the wheat from the chaff these days?

Rebecca Szkutak asked several VCs about the signals they’re looking for from startups in this sector, the industry-wide red flags they’re seeing, and why no one has decided to take “a step back from AI to see how things play out.”

Ask Sophie: Any tips for F-1 student visa approval amid the rising denial rate?

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