Techstars CEO: “2023 will be a graveyard for startups”

This pandemic created an unusual situation in the industry, leading to acceleration in many activities and fields, and the value of companies reached unreasonable heights. There was too much heat, which suddenly stopped, leading to revision. But I love a good crisis. Because that’s when the best companies are built, and it’s a good way to see that you’re focusing on the right things. I have built part of my professional life through crises and I am very excited about this course.” Beginning in 2021, Techstars, the world’s largest accelerator, has managed in an interview with Calcalist. Every year, Techstars has around 500 startups invest in pre-seed stages, and Gavet thinks the next few years will be tough for the high-tech industry.

He said, “In 2021, we’ve seen companies that have reached unimaginable value with a very small operating base, and we’ve seen seed companies that are worth tens of millions of dollars without any financial considerations. We, the big seed investors, are going to is to do it. We are happy when the value increases, but it doesn’t work like that. There are companies whose value increases are unhealthy. We still don’t know when the crisis will end, this summer or in five years. .There’s a lot of uncertainty. We have thousands of companies in our portfolio and a lot of investors in companies and institutional investors who are partners with us and I’ve heard all kinds of comments from them about when the crisis will end. Nobody really knows. It knows what will happen and we teach our companies to be flexible and ready for anything.”

Also Read :  The Bookseller - News - Bonnier Books UK introduces equal family leave and other initiatives as gender pay gap widens 

1 View gallery

Maal Geba, CEO"ליט משעשרוןת של שמוב טשטארס Maal Geba, CEO"ליט משעשרוןת של שמוב טשטארס

Maëlle Gavet – CEO of Techstars

(Photo: Nimrod Glickman)

What do you think will happen?

“Unfortunately, what I think is going to happen is that 2023 and 2024 will be a graveyard for startups. Companies still have a lot of money and there are still a lot of rounds. received and did. Do not build themselves, they are not ready for the crisis. Those companies that did not have enough time to attract capital are expected to face many problems.”

Gavet has been working in the high-tech industry for several years. In his last position, he held a senior role at Ori Allon’s company, Compass. From his perspective, he sees a tough future for the industry in the near future. “In addition to the aforementioned graveyard for many startups, I think we’ll also see a zombie army among venture capital funds that aren’t raising new capital. They’re working and investing, but mostly They will be dealing with money that already exists. There will be many funds that will not survive in the future. There are over 2,000 active funds in North America, Europe and Israel, and in my opinion, the world has too many of them. Not necessary.”

Also Read :  Why Truss must focus on the City to rescue the economy

Will the impact of the crisis be different between companies?

Gavet thinks the main problem will be for early-stage companies. We’re seeing tough times for companies there, with valuations down 70% and generally very difficult to raise money. There is.

Also, companies that issue through SPACs, creating a negative impact on the industry in general, affect the future. In the early stages, I believe it is possible to raise, but I don’t see any more scenarios of meaningless amounts in the seed and pre-seed stages. We will also see detailed reviews that require much more time at each stage of the investment. “

He added: “Unfortunately, I feel that we are at the beginning of the wave of evictions and we will see more cases in the coming years.” I don’t think companies have internalized the crisis and some of them are still living within their budget. They’ve grown up in the past and haven’t hit the wall yet.”

Gavet doesn’t like the industry’s use of the term “unicorn” (a startup valued at more than $1 billion) that has become synonymous with success, and he claims he’s never even heard of a “centaur.” , which refers to startups that have crossed the $100 million mark in annual revenue, and he calls them dragons. “The industry was focused on flashy companies like Airbnb and Uber, while we see more positives in less flashy companies. Unicorns and dragons are mythical creatures. Dragons are friends. “They are fighting and winning, so we have to focus on them, not on them. Unicorns,” he says. “Focusing only on unicorns created most of the problems in 2021, growth at any cost, very little financial capacity, and we’d rather have dragons with the financial ability to deal with whatever crisis comes their way.”

You worked at Compass, which has an Israeli background. How do you feel about this era?

Compass has changed the residential real estate market in the United States. In 10 years they have become the largest real estate broker and have invested more in technology than any other broker to help their agents be more productive.

Gautt recently decided to put his familiarity with the field into writing, publishing a book called Unicorns: Big Tech’s Empathy Problem and How to Fix It, which focuses on the lack of empathy among industry executives. “Big tech companies have a lack of empathy and don’t think about the impact they’re having on people,” he says. “Being a good leader is measured by the way you influence others, but you have to be aware. My book tries to answer the question of how we have become such an unsympathetic industry and how to deal with it. But there is hope. Most companies are not empathetic because they are run by engineers and humans are part of the formula and they try to take people out of the equation and that makes them not empathetic.

“This book was written after 15 years in the industry, and after not understanding why good people make terrible decisions from a human perspective. I tried to understand why companies suffer from a lack of empathy, and then I looked for it. The way solve.”

Techstars is one of today’s leading programs for nurturing early-stage companies. Hila Uel-Benner recently retired from managing Techstars Israel, prompting Gavet to come to Israel in an effort to find a new manager. “We’ve had nine programs here in six very successful years, but we can do more. We’re looking for a new manager here and we see a lot of importance in Israel. I expect to have two programs next year and we’re tasked with So next year we will continue to invest in 50 to 70 companies in Israel, and this is only a small amount of investment here.

We are like an index for early stages and operate worldwide in various industries such as agritech, edtech and foodtech. We have even invested in music and have had successes and partnerships there. There are many innovations in this field. The world and I are very optimistic about the Europe, Middle East and Africa region. Israel is an important center of innovation, also beyond cyber and artificial intelligence. There is also a lot of potential in Africa and we have opened our offices in Lagos.”

What are you mainly looking for?

“An area that has been of great interest to us in recent years is foodtech and agrotech. Food insecurity is something that has not existed for many years. My grandmother may have felt it in the past when she was at war, but this is a It is a problem. A phenomenon that was not thought of before the climate crisis and the Russian war in Ukraine. This phenomenon requires technological solutions from the world of entrepreneurship.”

Source

Leave a Reply

Your email address will not be published.