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2022 VC predictions, how to hook an angel, product advisory councils – TechCrunch

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I’ve worked at early-stage startups where we relied on our best guesses to shape product pipelines and develop marketing strategies.

I have also held jobs at companies where we engaged directly with current and past customers to ask them what they wanted. You can probably guess which approach generated more favorable outcomes.

Whether it’s done informally via a Reddit AMA or a Twitter Space, it’s never a bad idea to interact with people who use your products and services.


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Well-researched personas are useful, but nothing is better than talking to a customer if you want to understand what delights them — and what they’re willing to pay for.

With a product advisory council (PAC), early-stage startups can tap into the their users’ hive mind. The benefits are many: PACs can help validate everything from marketing campaigns to future product planning.

But to build one, founders must first define clear goals and create value for participants. In this seven-step guide, you’ll find strategies and tactics for identifying key members and influencers, streamlining the communication process, and creating “a little FOMO.”

Thanks very much for reading TechCrunch+ this week. I hope you have a relaxing weekend!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

Why Microsoft’s $2T+ market cap makes its $68B Activision buy a cheap bet

Microsoft's Xbox One video game console and Activision Blizzard's Call of Duty: Modern Warfare video game arranged in Denver, Colorado, U.S., on Tuesday, Jan. 18, 2022. Microsoft Corp. agreed to buy Activision Blizzard Inc. in a $68.7 billion deal, uniting two of the biggest forces in video games to create the worlds third-biggest gaming company. Photographer: Michael Ciaglo/Bloomberg via Getty Images

Microsoft’s Xbox One video game console and Activision Blizzard’s Call of Duty: Modern Warfare video game arranged in Denver, Colorado, U.S., on Tuesday, Jan. 18, 2022. Microsoft Corp. agreed to buy Activision Blizzard Inc. in a $68.7 billion deal, uniting two of the biggest forces in video games to create the worlds third-biggest gaming company. Photographer: Michael Ciaglo/Bloomberg via Getty Images

Risk is an essential part of gambling, so it may be improper to describe Microsoft’s planned purchase of Activision Blizzard as a “bet.”

Considering that Microsoft has a market cap over $2 trillion, purchasing a gaming company that pumps out titles like Call of Duty, Guitar Hero and Candy Crush for $68 billion isn’t exactly fraught with danger.

According to Box CEO Aaron Levie, the move solidifies Redmond’s entry into AR/VR gaming.

“If you believe VR and immersive computing is the future — whether for consumer or business use cases — Activision helps Microsoft build a flywheel of content and technology that gets more users on board to this future.”

500 Global’s Christine Tsai shares her 2022 VC predictions

Christine Tsai, co-founder and chief executive officer of 500 Startups Management Co., listens during a Bloomberg Technology Television interview in San Francisco, California, U.S., on Tuesday, June 12, 2018. Tsai discussed Abu Dhabi Financial Group's stake in the company as well as international expansion and running the firm after co-founder Dave McClure's departure. Photographer: David Paul Morris/Bloomberg

Image Credits: Bloomberg (opens in a new window) / Getty Images

2021 was a year like no other when it came to venture investment, and this year is poised to tread a similar path, writes 500 Global’s CEO and co-founder, Christine Tsai.

According to Tsai, 2022 will see web3 going mainstream, more capital flowing to underestimated founders, and broader investments in regions that have traditionally been overlooked.

“All signs point to a continued abundance of opportunities for startup founders and investors in the year ahead.”

Will quantum computing remain the domain of the specialist VC?

Central Computer Processor digital technology and innovations

Image Credits: Olemedia (opens in a new window) / Getty Images

Quantum computing’s potential applications include machine learning and computer-aided drug design, but the industry is still very much in its early days.

In 2021, there were approximately 90 quantum investments that totaled $1.4 billion. A significant jump from $700 million the year before, but compared to SaaS, not even a drop in the bucket.

Even so, we’re already seeing quantum exits: IonQ reached a $2 billion valuation after its 2021 SPAC, and Rigetti plans to do the same this year as it develops its superconducting quantum computer.

In a comprehensive market map of the quantum computing industry, Maria Lepskaya, a senior associate at Runa Capital, sorted the top companies in the space into 12 quadrants, “each corresponding to particular quantum technology and a stage of startups.”

Dear Sophie: How do I successfully expand my company to the US?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m an entrepreneur in Guatemala and would like to come to the United States to expand my tech company.

What is the best way to do that?

— Groundbreaking Guatemalan

5 areas where VCs can play an outsized role in addressing climate change

Five green rocker switches, all switched in the power-on position except the last one, arranged in a horizontal row on blue colored background

Climate tech startups raised $32 billion in 2021, but that amount is nowhere close to the estimated $2.5-$4.8 trillion required to fund enough adaptation and mitigation projects to make a meaningful difference.

Private investors can’t fill the gap alone, but VCs are in a unique position to change this dynamic.

By backing climate startups, they can de-risk proven climate tech, build legitimacy to attract talent, help with scaling, attract new kinds of investors, and shape the overall ecosystem, write investor Jamil Wyne and climate finance researcher Abrar Chaudhury.

“While most VC verticals will be assessed in terms of how much they return to investors, climate tech may be unique in that its success will also be determined, essentially, by its contribution to the preservation of our livelihoods and how much it can avoid a winner-take-all dynamic.”

Inside Secfi’s 2021 state of stock options equity report

Image of abstract multi colored pie chart made out of different pie peces on purple background.

Image Credits: Andriy Onufriyenko (opens in a new window) / Getty Images

It’s great to have a stake in the company you’re helping to build, but when employees don’t know the optimal way to exercise their stock options, they usually end up with a raw deal.

Last year, startup employees paid an estimated $11 billion in avoidable taxes by exercising their options post-exit, rather than pre-exit, according to Secfi data.

In a post for TechCrunch+, CEO Frederik Mijnhardt shared his analysis of the biggest trends around stock options in 2021, including why, despite stellar IPOs, most employees couldn’t exercise their options until after the exit, dramatically increasing their tax liability.

“Looking ahead to 2022, it seems that the industry’s current trend toward mega-sized rounds of funding and longer exit timelines mean that for the average startup employee, their total cost to exercise stock options will continue to rise,” says Mijnhardt.

If you want startup funding, don’t make VCs feel ignorant

Concept of the phrase physics in a nutshell. Physics formulas drawn on black paper with walnuts

Image Credits: Andreas Mann/yeEm (opens in a new window) / Getty Images

It’s important to ask potential investors questions, but first-time founders often alienate VCs by quizzing them about the breadth and depth of their knowledge.

The trick, according to Prashant Fonseka, a partner at Tuesday Capital: only ask easy questions.

“Save the challenging questions for a time when you’re selecting from multiple investors who are ready to write checks after you’ve convinced them your company is fundable.”

The berserk pace of fintech investing outshines the global VC boom

fintech

Financial technology concept.

From Buy Now, Pay Later to open banking and social finance, fintech has scaled rapidly since the pandemic began. Investment has kept pace with growth: last year, fintech accounted for more than 20% of all venture investments.

In a deeply researched post, Mary Ann Azevedo and Alex Wilhelm examine how fintech overtook and outperformed every other sector to the point where its outlines mirror that of the broader venture market.

“To some degree, it appears that what is true for the venture capital market is also true for the fintech market, but in a more exaggerated form. Fintech is like most venture, but simply more extreme.”

Changes to corporate investing rules could diminish China’s resilient venture landscape

China has a mature venture investment ecosystem, but recent interventions by the country’s government to rein in the tech sector have left many wondering whether startup investment in the country may suffer permanently.

In The Exchange, Alex Wilhelm makes the case that the country’s venture market will take a hit — but not a lethal one.

“There are lots of non-corporate investors in China who are still active. So long as they persist, the numbers will not collapse,” writes Alex.

“But potential new regulatory rules regarding major tech companies could prove to be a material knock to the country’s venture scene.”

5 essential factors for attracting angel investment

In a guest post by Marjorie Radlo-Zandi, the veteran angel investor shared five key elements she considers before investing.

Her advice is clear and simple, which makes it particularly valuable in an environment where startup funding is flowing faster than ever.

Few investors expect a first-time founder’s pitch deck to be the most definitive analysis of a particular sector, but you’re better off being cautious instead of overly optimistic.

“An extraordinarily high projection signals you’re not altogether credible, and I advise you to avoid this mistake at all costs,” says Radlo-Zandi.

There’s never been a better time to found a startup, but you can’t catch pennies from VC heaven if there are holes in your story.

NFT volume, DAOs and the curious case of LooksRare

NFT marketplace OpenSea largely had the field to itself, but after competitor LooksRare announced an airdrop for its $LOOKS token last week, it overtook OpenSea in trading volume.

“Let’s talk about incentives and governance tokens to parse out what’s up with LooksRare and the larger future of the financialization of everything,” wrote Alex Wilhelm in The Exchange.

LG and the hunt for the next-gen corporate incubator

On stage announcing LG Nova’s launch — Sokwoo Rhee, LG’s corporate SVP and head of LG Nova. Image Credits: LG

South Korean conglomerate LG produces everything from flat-screen TVs to soft drinks, so the idea that it would set up a startup incubator program isn’t a huge leap.

To learn more about the initiative, Haje Jan Kamps interviewed Sokwoo Rhee, LG’s corporate SVP and head of its North America Innovation Center.

“When I say new businesses, that can mean a lot of different things,” said Rhee. “We are willing to create a new business unit if the idea, suggestions and partnership hit a home run.”

Fintech and insurtech innovation in Brazil set to take off on regulatory tailwinds

Nubank’s present day headquarters in Sao Paulo, Brazil. Image Credits: NELSON ALMEIDA/AFP via Getty Images

A substantial portion of Brazil’s population remains underbanked, but instant payment system Pix processed more than 8 billion transactions last year.

Launched by Brazil’s central bank in November 2020, Pix is already used by 60% of the population.

To better understand how shifting regulations and increased adoption are impacting LatAm fintech startups, Anna Heim spoke to:

  • Amy Cheetham, partner, Costanoa Ventures
  • Javier Santiso, founder and general partner, Alma Mundi Ventures
  • Rodrigo Teijeiro, CEO, RecargaPay
  • Pedro Sônego de Oliveira, CEO TruePay



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Rumors confirmed, Street Fighter 6 kicks off in June 2023

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Fighting Game fans are excited now that Capcom announced that Street Fighter 6 is coming to PS5, PS4, Xbox Series X/S and PC on June 2, 2023. The game was initially announced in February 2022, but that reveal did not include a specific release date beyond 2023.

The trailer at The Game Awards focused on new mini games and the international setting. In addition to the 18 previously announced fighter, the trailer also confirms that several new fighters — Dee Jay, Manon, Marisa and JP — that will join the game’s roster.

Notably, the June 2 release date for Street Fighter 6 may be a strategic choice for Capcom. June is the very beginning of Q3.

The last installment of the franchise — Street Fighter V — released nearly seven years ago so fans have been eager for another installment. A day before The Game Awards, the game’s June release date was leaked via the PlayStation Store.

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5 Things to Do Now to Propel Your Business in 2023

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Opinions expressed by Entrepreneur contributors are their own.

Entrepreneurship is a daily leap of faith. In times of economic uncertainty, that leap may feel like a dive off a cliff. We are in one of those times. It likely will take months to fully re-adjust to the forces that have pummeled the world’s economy, and to entrepreneurs, months can feel like years.

With the right playbook, entrepreneurs can survive and thrive in whatever economic scenario. Here are five things you can do to propel your business ahead now and through the difficulties of business cycles for years to come.

1. Learn the lessons of more challenging times

A rocky economy presents a unique opportunity to make tough decisions about the business plan. Everything is open to reexamination. How has the market changed? Are your customers facing challenges that create new opportunities for your solutions? How do new conditions change your assumptions, and what actions do you need to take in response?

Critically evaluate your product roadmap. Is this the time to pivot or become more aggressive with your current plans? Prioritize the highest margin features that are achievable in the next twelve months. Push out projects that don’t make that list, and re-assign resources accordingly. Re-assess pricing. Even as inflation tiptoes back from the highest levels in forty years, raw material and transportation costs remain way up. What will impact your customers if you adjust the pricing or add surcharges to offset these costs, at least temporarily?

It’s been a rough year for hiring. Many companies took the talent they could get. If there are employees or gig workers who would fare better in a different job, now is the time to let them go. Make tough-minded corrections that will pay off overall — corrections that might be avoidable in less challenging times.

Related: How to Turn Inflation and Recession into Your Largest Business Opportunity

2. Tighten your grip on cash

Venture capitalists are pulling back. In the third quarter, Crunchbase reported that funding for startups in U.S. and Canada fell 50% year-over-year. Valuations are down across the board. If you are fortunate enough to be a later-stage startup that benefited from VC largess in 2021, make your last raise last longer than intended.

Keep your dry powder dry, and put off going for another round until the markets even out. Reemphasize the basics for early-stage companies with less market validation and greater distance between now and a potential exit. Delay all capital expenditures. Leverage the hybrid work model if possible, to reduce rent and other office expenses. Continue with Zoom or Google Meet. Now is not the time to rack up travel costs. Re-negotiate fees and terms with service providers. Seek credit terms with key suppliers, in a word, bootstrap.

3. Talk to customers, in person. Now.

How have the business needs of your customers — whether paying or beta — changed over the last 18 months? Are there benefits to your solution that have more recognized value now? Nearly every business, for example, from corporates to startups, has been forced to re-learn the lessons of supply chain management. Startups that can help their customers make better business decisions based on artificial intelligence (AI), reduce costs by improving inventory management or protect against out-of-stock scenarios by identifying and building relationships with new, more local sources of supply will have an edge.

Related: Finding Validation in Serving Customers

4. Non-dilutive capital

According to PitchBook, venture capitalists are showing greater interest in portfolio companies “whose satellite, robotics and software tools can do double duty” in military and commercial markets. International conflicts are one reason, of course.

Another is that the defense and military security industries are generally viewed as recession-proof. Our firm routinely encourages portfolio companies to consider non-dilutive funding from the Small Business Administration — grants to support cutting-edge technologies range from $150,000 to more than $1 million.

Navigating the application process isn’t for the faint of heart. A startup must be realistic about the work involved, but in many states, there are resources to help. Besides the funding, severe responses to agency requests for proposals are reviewed and evaluated by technologists. At a minimum, this can be terrific feedback and a great source of industry contacts.

5. Blue-chip cultures attract blue-chip talent

Company culture can be an asset or a liability. An inclusive, rich culture helps key hires say yes. Finding stakeholders that believe what you believe and are aligned with your team’s values significantly improves the odds that they will stick with you in good times or bad.

After months of “great resignation” fever, the over-heated demand for talent may be cooling off. Maybe offers aren’t as fast or grand as they were a year ago. Maybe Twitter won’t be the only advanced technology business to let people go. Regardless, the search for great talent isn’t a faucet that a young company turns off and on. A startup might modulate the timing or the number of hires but stand at the ready to recruit and filter for culture fit.

Related: 3 Ways to Stay Competitive in the War for Talent

With the right mindset and intentional approach, an entrepreneur can make 2023 a year to strive and thrive. As Yogi Berra, my favorite baseball player of all time, said, “Swing at the strikes.” In business, like baseball, the right swing can turn even the most challenging pitch into a hit.

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Akros Technologies, an AI-powered asset management platform, raises funding from Z Holdings • TechCrunch

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Artificial intelligence is taking over almost every industry. The investment and finance industry is no exception. In Deloitte’s 2019 report, the firm reveals that AI is transforming the financial ecosystem to reduce costs and make operations more efficient by providing automated insights and alternative data, analysis and risk management.

Technology such as AI has digitized the finance sector, ranging from payments and remittances to lending. However, asset management is still in the nascent stage of digitization, according to the chief strategy officer and co-founder of Akros Technologies, Jin Chung.

Akros Technologies wants to disrupt the current asset management industry via its AI-driven asset management software platform that mines market data for stocks. Akros just raised $2.3 million from Z Venture Capital, the corporate venture capital wholly owned by Z Holdings, which also owns the Japanese messaging app Line and internet portal Yahoo Japan.

Akros intends to strengthen strategic ties with Z Holdings via strategic investment, the startup said. The latest funding, which brings Akros’s total amount raised to $6.1 million since its 2021 inception, will help Akros to scale its software platform and asset management products and ramp up its users, including local and global financial institutions and fintech companies.

The outfit is already in discussions with potential partners to expand its AI-powered product called portfolio management as a service, or PMaaS, an all-in-one operating system for portfolio management. Chung explained to TechCrunch that PMaaS “enables B2B clients such as financial institutions, fintech startups and robot-advisors to launch their own exchange-traded funds (ETFs) without having to set up ETF teams and infrastructure.”

He added that it expects to secure more than five B2B clients in the first quarter of 2023.

The startup claims that its AI-powered portfolio management platform can reduce “the overall cost structure [of] the traditional fund development,” including management fees and unnecessary fees involved in the investment process, by more than 80%. The outfit aims to maximize the finance management performance of data-driven ETFs and offer a portfolio management solution via the PMaaS for Akros’s users to help them compete with global ETF institutions like Vanguard or JPMorgan.

In August, Contents Technologies launched Korean pop music, also known as K-pop, and Korea Entertainment ETF, on the NYSE Arca Exchange under the ticker KPOP, using Akros’s PMaaS solution to develop the ETFs. In addition, Akros listed an AI-driven target income ETF, called Akros Monthly Payout ETF (ticker: MPAY), on the NYSE in May with monthly distributions at an annualized target rate of 7%, according to the startup.

To build a slew of investment strategies that lower the cost of portfolio modeling and generate scores of investment portfolios, Akros applies a generative AI model based on a decision transformer, which predicts future actions through the sequencing model, Chung said, adding the company also employs GPT-3 natural language processing (NLP) to analyze unstructured language data.

Akros plans continuously to enhance its engineering technology by bolstering its business to disrupt the asset management market and attract new partners across the globe, including Japan, Singapore and the U.S., co-founder and chief executive officer Kyle Moon said in a statement.

Founded by CEO Moon, CSO Jin and chief marketing officer Justin Gim, Akros employs seven people.

Co-founders of Akros Technologies: (Left to right) Justin Gim, Kyle Moon and Jin Chung. Image Credits: Akros Technologies

Moon previously worked for Qraft Technologies as head of AI research and CSO and had experience listing four ETFs on NYSE. Before co-founding Akros, Gim had more than nine years of experience in the asset management industry; Chung did research work for Bayesian deep learning in autonomous driving cars at Oxford Robotics Institute.

In March, Akros raised $3.75 million in funding from PeopleFund, a South Korean peer-to-peer lending platform. The company declined to provide its valuation when asked.

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