Along with a cadre of other people, I focused this week on one event: Y Combinator. The elite accelerator announces 377 startups as its Summer 2021 cohort. We covered every single on-the-record startup that featured and pulled out a few favorites:
There’s something so honest and magical about spending literally hours listening to a founder after he pitches his ideas, with one minute, one slide, and utter optimism. That’s why I like to cover demo days: I get tunnel vision of where innovation is headed, are the behemoths ripe for disruption and what founders think has a witty competitive edge versus a simple baseline. .
That said, I’ll share a caveat. While YC is an ambitious snapshot, it is not an example of the next wave of decision makers and leaders within startups entirely – from a diversity standpoint. Accelerator posted small profit The number of women and LatinX founders in its batch, but the number of participating Black founders, has declined. The need for more diverse accelerators has never been more apparent, and as some in the tech community argue, is Y Combinator’s biggest blind spot.
With that in mind, I’d like to leave you with a few takeaways after hearing hundreds of pitches. Here’s what 377 Y Combinator pitches taught me about startups:
- Instacart ran so that YC startups could run. instacart, Final value $39 billion, is one of Y Combinator’s most successful graduates — which makes it even more appealing that many startups within this summer’s batch are looking to take on the behemoth. Instead of going after the obvious momentum, startups are looking to enhance the grocery delivery experience through premium produce, local cuisine and even swanky vegetables. This suggests that there may be a new chapter in grocery delivery, one in which ease of use isn’t the only competitive advantage.
- The pre-seed world of crypto is quieter than that of fintech. YC feels more like a fintech accelerator than ever, but when it comes to crypto, there weren’t as many moons as I expected. We discussed this a bit in the Equity podcast, But if anyone has theories as to why, I’m game to hear them.
- EdTech seeks to disrupt artistic disciplines. When it comes to disruption it’s common to see edtech founders flock to subjects like science and math. Why? Well, from a purely pedagogical standpoint, it’s easy to measure a service that answers questions that have only one correct answer. While math may fit into a box that works for a tech-powered AI tutoring bot, art, on the other hand, may need a slightly more human touch. Which is why I was excited to see a number of edtech startups, from Spark Studio to Litenard, focusing on the humanities in their pitches. As shocking as it sounds, rethinking how a bookclub reads is certainly a refreshing milestone for edtech.
- Sometimes, the best pitch is no pitch at all. One pitch stood out just because he addressed the elephant in the room: We are all tense. Juop sells glamping-in-the-box and profitable business likely to benefit from COVID-19. I remember this as the founder used part of his pitch to ask investors to take a breath, because two days have been long. Being human, and more importantly speaking like one, is the need to stand out these days.
On that note, exhale. Let’s move on to the rest of this newsletter, which covers Wall Street, public filings, and my favorite new podcast. As always, you can find and support me on Twitter @nmasc_ Or send me suggestions at email@example.com.
a return to old school wall street
With so many new funds, single-gp and alternative capital sources in the market these days, founders are confused. Funding from Three Guys on Sand Hill Road may have gone away, but it’s also become more fragmented, meaning entrepreneurs need to get even more sophisticated in how they fill their cap tables. This week, I interviewed a recent venture-backed startup that proposed a solution: a return to old-school Wall Street.
Here’s what to know: Hum Capital fully seeks to help investors allocate their resources to ambitious businesses. The startup seeks to emulate the world of old-school Wall Street, helping aspiring business owners find the best financing options for their goals, rather than today’s dance of startups trying to prove their worth for one type of capital. . In my story, I told more about the business.
At this stage, it is easy for us to explain the product of capital:
It uses artificial intelligence and data to connect businesses with the funders available on the platform. The startup connects with capital-hungry startups, gleaning financial data from more than 100 SaaS systems, including QuickBooks, NetSuite and Google Analytics, and then translates them to about 250 institutional investors on its platform.
From us to mmhmm:
IPO filing and other hubbub
When the pandemic started affecting startups, Toast was at the top of the list. The restaurant tech startup had a series of deep layoffs as many of its clients in the hospitality industry had to be laid off. Months later, Toast made headlines with a dramatically different message: It’s going public, and here’s all our financial data.
Here’s what you need to know: This week, Toast published its S-1, offering a diagram of how the startup was affected by the COVID-19 pandemic and answering questions about why it is now going public. After Warby Parker split from S-1, Alex had five takeaways from Toast S-1. my favorite part? Toast was smart to diversify beyond its hardware, handheld payment processors:
Toast’s two biggest revenue sources — software and fintech earnings — posted steady growth on a quarter-on-quarter basis. Hardware revenues have proven slightly less consistent, though they’re also headed in a positive direction this year and set what appears to be an all-time record result in Q2 2021.
Toast’s second quarter of last year would have been much worse if it weren’t for software revenue. And since then, its growth wouldn’t have been as impressive without payments revenue (its fintech line item, loosely speaking). The broad revenue mix that Toast has built has proved limited on the downside, opening up lots of room for growth.
Butter or Jam:
Have you already bought your ticket to Disrupt? If not, here’s the link, with a really fancy discount on your part.
Now that that’s out of the way, I want you to listen to ‘s latest podcast, which focuses on talking to early-stage founders about building and launching their companies. Recent episodes include:
seen on techcrunch
Spotted on Extra Crunch
talk next week,