Hey Founder, here are the latest tech news and insights:
- The Top startup PM awards 2024
- Finally, scaling startups tops the EU agenda
- David Sacks as U.S. “AI & Crypto Czar”
- Revolut business targets larger enterprises
- Musk gives xAI shares to Twitter backers
- Will your co-founder leave the project?
- 10 insights from the State of European Tech 2024 report
- New funding opportunities
- and more
THE TOP STARTUP PM AWARDS 2024
We'd love to invite you to join The Top Startup PM Awards 2024, organised by The Top Voices.
The awards are free and designed to recognize Product Managers who’ve made a real impact in startups, not just the big corporations.
FINALLY, SCALING STARTUPS TOPS THE EU AGENDA
As Ursula von der Leyen begins her second term as European Commission president, scaling startups is a top priority. Speaking to the European Parliament, she highlighted Europe’s “innovation gap” and unveiled plans to address it by boosting investment, cutting red tape, and fostering frontier technologies.
Additional reforms include a European Savings and Investments Union to close funding gaps and streamline regulations to make it easier for businesses to thrive across the bloc’s 27-member single market.
“Europe must be home to the next wave of frontier technologies,” von der Leyen emphasized, stressing the need for private investment and a simplified legal framework to drive competitiveness and innovation.
AI & CRYPTO CZAR TO LEAD U.S. TECH POLICY
David O. Sacks has been appointed by President-elect Donald Trump as the White House A.I. & Crypto Czar, a newly created position aimed at guiding U.S. policies in artificial intelligence and cryptocurrency. This role underscores the administration's intent to bolster these rapidly evolving sectors, which are seen as vital for American competitiveness.
He was once the COO of PayPal (the famous PayPal Mafia), later launched his own startup, Yammer, and sold it to Microsoft for $1.2 billion in 2012. Since 2017, he has run the Craft Ventures fund, which, among other things, has invested in Elon Musk's companies, including SpaceX.
REVOLUT BUSINESS TARGETS LARGER ENTERPRISES
According to Sifted, Revolut Business is making a significant push to capture larger enterprise clients, expanding its product offerings to include savings accounts, treasury solutions, and credit options, alongside its established services for small businesses. Having surpassed $500m in annual revenues this September, the unit now accounts for 20% of Revolut’s total revenue, outpacing competitors like Tide.
The fintech is also breaking into the payment hardware market with the recent launch of its payment terminal, aimed at retail and hospitality businesses, although it faces tough competition from established players like SumUp and Square.
OPENAI CONSIDERS ADDING ADS TO BOOST REVENUE
OpenAI is exploring the integration of advertising into its AI products to diversify revenue streams. Chief Financial Officer Sarah Friar mentioned that while the company is considering an ad-based model, there are "no active plans to pursue advertising" at this time.
To support this potential shift, OpenAI has recruited advertising specialists from major tech firms like Meta and Google, including Kevin Weil, former Instagram executive, and Shivakumar Venkataraman, Google's former head of search advertising.
Despite generating approximately $4 billion in annual revenue, OpenAI anticipates expenses exceeding $5 billion due to the high costs of developing advanced AI models. This financial pressure is driving the company to consider new revenue avenues, such as advertising.
MUSK GIVES XAI SHARES TO TWITTER BACKERS
According to Financial Times, Elon Musk has transferred 25% of shares in his company xAI to investors who backed his $44 billion acquisition of Twitter. This move is seen as compensation for the losses incurred due to the sharp decline in Twitter's value following the deal.
The investors receiving shares include Fidelity, Oracle founder Larry Ellison, Twitter co-founder Jack Dorsey, Saudi Prince Alwaleed bin Talal, and venture firms Sequoia Capital and Andreessen Horowitz. xAI is now preparing to close a $5 billion funding round, doubling its valuation to $50 billion within six months.
The funds will be used to develop advanced AI models and create one of the world’s largest supercomputer clusters. Since Musk's acquisition of Twitter in 2022, the platform's value has plummeted, with investors like Fidelity reducing the valuation of their stake by nearly 80% to $9.4 billion.
Despite this, many investors have contributed additional funds to xAI, optimistic about its future success. In November 2023, Musk announced that Twitter (now X) investors would own 25% of xAI shares, though details were not initially disclosed. According to sources, investors in X were granted a quarter of xAI's capital across both funding rounds, with their ownership unaffected by newly issued shares after the latest round.
WHAT’S THE LIKELIHOOD THAT YOUR CO-FOUNDER WILL LEAVE THE PROJECT?
Imagine you and your friend decide to launch a startup. But there's always a chance that they might leave — for any number of reasons. The folks at Carta decided to dig into this and figure out what percentage of co-founders actually bail.
They analyzed startups from 2015 to 2024, looking at data from over 13,000 founders. The results are shown in the chart. Note: All the startups in the study had raised funding.
One key detail: the study focused on U.S. startups with vesting. Vesting serves as a deterrent to leaving early. However, in other countries, vesting isn't as common, so the early departure rate might be higher.
Interestingly, the stats show that the percentage of founders leaving in the first year has nearly doubled in the U.S. — from 4% to 7.5%. By the fourth year, the likelihood of your co-founder leaving climbs to 25%.
One more thing to note: the data only includes startups that continued operating after a co-founder left. If one founder leaves and the startup collapses, that’s not part of these stats. In fact, I discussed a case like this today — one founder left, and the startup decided to pause operations, at least temporarily.
What’s the takeaway? At the beginning, you and your co-founder might both be fully committed, bursting with enthusiasm to disrupt the market. But the likelihood of your partner leaving isn’t negligible. At the very least, be mentally prepared for this possibility.
10 INSIGHTS FROM THE STATE OF EUROPEAN TECH 2024 REPORT
The 2024 State of European Tech report is out, reflecting the current trends and progress of the European tech industry. While it doesn’t offer groundbreaking revelations, there are some noteworthy highlights:
1. Europe’s talent pool is world-class. The European tech sector now employs 3.5 million people — seven times more than in 2015.
2. 10x growth in capital over a decade. Over the past ten years, $426 billion has been invested in Europe, compared to just $43 billion in the previous decade.
3. Improved founder quality and ambition. Europe has 35,000 early-stage startups, eight times more growth-stage companies than ten years ago, and 358 unicorns valued at $1 billion or more.
4. Nearly $1 trillion in exits. Despite this, liquidity remains a challenge, with one-third of LPs citing it as a major barrier to investing in European venture capital.
5. AI clusters are emerging across Europe. The AI talent pool has grown sixfold over the last decade, now boasting 159,000 specialists.
6. AI is driving early-stage funding. In 2024, 23% of all rounds under $5 million were in AI or machine learning startups, surpassing any other sector.
7. Unlocking Europe’s potential. 47% of respondents see regulation and policy as major barriers, while 37% point to limited access to capital.
8. Growth-stage capital shortage. Europe underfunded its growth-stage companies by $375 billion over the past decade.
9. Quick fixes for capital access. European pension funds allocate only 0.01% of their $9 trillion assets to venture capital. A slight increase could unlock billions for growth-stage companies.
10. The future of European tech. With significant advancements over the past decade, the sector could reach $8 trillion in value and employ 20 million people by 2034.
THE CONNETIC VENTURE CAPITAL ACCESS FUND
Apply Anytime
The Connetic Venture Capital Access Fund (VCAFX) offers startups in software, fintech, and consumer sectors access to funding through AI-driven evaluations. With a proven track record of analyzing over 30,000 startups and investing in more than 220 companies, Connetic Ventures is committed to fostering diversity and transparency, investing in women and minority founders at rates significantly above industry averages.
IGNITE ASIA STARTUP PROGRAM
Apply Anytime
Ignite Asia is dedicated to nurturing and investing in early-stage technology startups in Malaysia. They offer a comprehensive Southeast Asia-focused startup curriculum to support aspiring founders and provide funding of up to USD 100,000 through angel syndication. Beyond financial investment, Ignite Asia delivers quality post-investment support via a network of diverse and high-caliber angel investors.
LIST OF GLOBAL VCS
We keep an up-to-date list of global VCs and would love to share it with you!
Simply reply “Hello" to this email, and our team will send you our curated list.
EARLY-STAGE ROUNDS
- StretchDollar secures $6M to revolutionize health benefits for small businesses
- Akhetonics raises €6M to deliver world’s first all-optical processor
- Acorai secures $4.5M to advance heart failure management innovation
- NORBr secures €3M to transform payment infrastructure
- LearnWise secures €2M to revolutionize student support with AI
13 FUNDRAISING SCAMS FOUNDERS SHOULD KNOW ABOUT
Raising funds can be a minefield, with scams targeting unsuspecting founders. Here are 13 common scams that you should know about, shared by Stephane Nasser.
- Bait-and-Switch: Investors pitch fundraising services instead of investing.
- Pay-to-Play: You’re asked to pay fees upfront for a chance to be considered.
- Pay-to-Pitch: Paying to pitch to investors doesn’t guarantee interest.
- VC on Payroll: Investors demand paid positions in exchange for funding.
- Heads I Win, Tails You Lose: Abusive terms that make you personally liable if things fail.
- We Know Him: Scammers falsely claim connections with key investors.
- Equity Instead: Advisors ask for equity instead of cash, often for little value.
- Drag-and-Drop: Investors delay deals to trap you when options are limited.
- Spearfishing: Investors gather your information without intent to invest.
- Accelerators: Some accelerators are just service providers, not true investors.
- Crazy Good Deal: Overly generous offers with harsh terms later.
- Dirty Sheets: Hidden, unfair clauses in term sheets.
- Lethal Vesting: Aggressive vesting terms that dilute your equity.
How to Protect Yourself:
- Be sceptical of deals that sound too good to be true.
- Educate yourself on standard practices.
- Always do reference checks.
- Consult a lawyer before signing anything.
TIM COOK WANTS APPLE TO SAVE YOUR LIFE LITERALLY
In a recent interview with WIRED, Apple CEO Tim Cook emphasized the company's commitment to health-focused technologies, highlighting their potential to significantly enhance users' well-being. He expressed particular enthusiasm for the advancements in artificial intelligence (AI) and the newly introduced Apple Intelligence, noting their profound impact on the company's product ecosystem.
Cook also reflected on his tenure at Apple, sharing that his life has been deeply intertwined with the company since 1998. He conveyed a strong personal connection to Apple, stating, "It's hard to imagine life without Apple because my life has been wrapped up in this company...since 1998."
Written by Anna Lebedeva, the co-founder at The Top Voices and a startup ecosystem enthusiast.
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