Tag: EC Column

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Ask Sophie: Any guidance for changing jobs while on an H-1B?

Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.
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Here’s another edition of “Ask Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

TechCrunch+ members receive access to weekly “Ask Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Dear Sophie,

I’ve been on an H-1B visa with my current employer for about two years, and I want to find a more challenging position with another company.

At a time when more companies are doing layoffs, I feel like I’m at a disadvantage in the job market compared to a few years ago.

Can you please guide me on changing jobs, transferring an H-1B and getting support for my green card?

— Hopeful H-1B Holder

Dear Hopeful,

Congrats on taking the first step toward reaching your goals. Appreciate you reaching out to me for guidance — I’ve got you!

The good news is that many companies are hiring tech talent. Layoffs in the tech sector — mostly by the Big Tech firms — have grabbed the news headlines since last year. But I’ve found that many early-stage startups successfully conserved cash and are now hiring.

Since you already went through the lottery process, you won’t need to go through it again for an H-1B transfer. Phew!

In addition, other sectors such as healthcare, professional and business services, government, and hospitality have shown strong job growth and are hiring tech talent. What’s more, federal legislation, such as the CHIPS and Science Act of 2022 and the Infrastructure Investment and Jobs Act of 2021, will lead to increased job creation over the next few years.

Become familiar with your ideal visa and green card route, particularly when pursuing a position at an early-stage startup. Often early-stage founders and ops leaders have limited immigration experience, so knowing how to explain the process is invaluable to pitching yourself.

Tips for managing your H-1B transfer

You’ve already surpassed one of the biggest challenges most people face — being selected for an H-1B visa through the annual H-1B lottery. In the past few years, the chances of being selected in the lottery have decreased significantly. Since you already went through the lottery process, you won’t need to go through it again for an H-1B transfer. Phew!

Your job now is to figure out what it is you want to do. What’s your dream job? Can it qualify as a specialty occupation for H-1B purposes? If it’s not the next natural step on a typical career progression ladder, can you identify the next role that would be a great steppingstone?

Sophie Alcorn headshot

Image Credits: Sophie Alcorn

Once you’ve identified your next step, then you need to find an employer willing to transfer your H-1B. Expand your network and tap into your existing network for job leads. Ask prospective employers early on in the job interview process whether they’re willing to provide immigration support.

If they aren’t — or if they hesitate — move on. International talent remains highly sought after by employers. According to the 2023 Immigration Trends Report published by Envoy Global, 87% of employers are recruiting and hiring foreign national employees in the U.S.

For an H-1B, the employer is responsible for paying the costs. You can let prospective employers know that an H-1B specialty occupation visa transfer for a startup can typically be accomplished in a month or so, and usually for less than $10,000, including legal and filing fees, which is much less than the cost of a recruiter. The process can take as little as four to six weeks from offer to start date.

It’s definitely recommended that all companies work with an experienced immigration attorney to put together your work visa petition. Startups or companies that have never before sponsored an employer or prospective employee for an H-1B must first get their Federal Employer Identification Number (FEIN) verified by the U.S. Department of Labor’s Office of Foreign Labor Certification, which typically takes about a week.

Ask Sophie: Any guidance for changing jobs while on an H-1B? by Walter Thompson originally published on TechCrunch

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Create context and provide examples to lower AI adoption barriers

Jeremiah Stone Contributor
Jeremiah Stone is CTO at SnapLogic.

Every company needs to be thinking about how to make artificial intelligence (AI) a seamless extension of its team. How often has an employee said, “I wish there were more hours in the day to get all my work done,” or “This is too much work for just one person.”

AI has the potential to lighten our workload and let us execute on tasks in a less fragmented way, but fostering an AI-friendly company culture is easier said than done.

It’s critical that companies take steps to quell any trepidation around AI while also providing tangible examples of its benefits.

In fact, according to a survey conducted by SnapLogic, 39% of respondents said they believe it will be difficult to get everyone in their organization on board with AI.

There are several barriers to AI adoption, but it mostly comes down to a lack of context and education on the topic. By heeding the following advice, companies have the best chance at integrating AI technologies into their company culture with little disruption — and big benefits.

Demystify AI to support change management

Most humans learn best by metaphor and example. It can be tricky to paint a picture of how AI will impact the workplace since we have so few prior examples. Additionally, some people worry that AI might make their role redundant if it can do their job faster or better than they can.

Despite these concerns and a general lack of context, people for the most part feel optimistic when it comes to AI: In our survey, nearly two-thirds liked the idea of using it in their current role. They believe AI has the potential to save them time (54%), increase productivity (46%), and reduce risk and errors in their work (37%).

Create context and provide examples to lower AI adoption barriers by Walter Thompson originally published on TechCrunch

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Feels like you missed the generative AI train? 5 steps for speeding ahead in 90 days

Will Poole Contributor
Will Poole is a six-time serial entrepreneur and global investor focused on creating massively scalable tech-forward solutions meeting the needs of the rising middle class in the Global South (Latin America, Africa, India, and Southeast Asia).
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I’ve been talking to founders across the Global South about generative AI (GAI) as often as I can since early 2023. The founders in our portfolio of 350+ companies are generative AI users, not creators. As with any other disruptive situation, these founders can be divided into three groups:

  • Ahead of the Curve: companies that have already shipped something.
  • Fast Followers: watching and prototyping but have not shipped yet.
  • Late for the Train: don’t yet know how to get on the train/don’t have any resources to apply now.

This article is for any founder who feels like they’re late for the train — or is all aboard, but not going fast enough.

Reviewing examples of all three groups will help founders know where they really stand. Those who are Ahead of the Curve had at least three things going for them: They saw the opportunity early, they had ready-made situations to which they could apply generative AI, and they had engineering talent available to get something prototyped and into production in a timely way.

One example is a farming e-commerce company that has already taken 30% out of its customer service costs by putting a farmer-lingo-capable chatbot in front of its customer service agents and expects to get savings to 50% over the next quarter or so.

A Fast Follower has prototyped means to cut costs and increase the speed of recruiting blue-collar workers by adding generative AI–driven steps to its interview and candidate engagement workflow. Because they have a complex workflow with high throughput, they must be careful about how quickly they deploy; initial testing is showing massive improvements in multiple dimensions.

Here are five clear steps to move from being late for the train to speeding ahead in much less time than you’d think.

Finally, a Late for the Train startup provides solutions for call centers and has done some initial evaluation and planning, but has not yet determined how/when to best add generative AI to its product roadmap, which is already stressed with demands from existing customers.

Here are five clear steps to move from being late for the train to speeding ahead in much less time than you’d think:

  1. Adopt a simple language so everyone can communicate clearly about this disruptive tech.
  2. Get your entire team onboard at the high level (many of them may already be there without your knowledge).
  3. Ensure that you are not letting cloud LLMs “hoover up” your data in ways that expose it to competitors or bad actors.
  4. Establish a Red Team to be disruptive internally.
  5. Measure progress on generative AI adoption and communicate it to the company on a consistent basis.

1. Type 1 and Type 2 generative AI applications

There are plenty of new technical words and concepts around AI, and many have written about them, so you don’t need more from me, except this one concept: From an adoption perspective, there are broadly two paths you can be going down, which are not in any way exclusive.

The first is using generative AI to enhance what you’re already doing by increasing productivity or quality of operations or existing customer interactions. Let’s call this a Type 1 application.

The Ahead of the Curve example cited above is Type 1: Companies using generative AI to improve sales communications or help with market research are doing Type 1 work. Type 1 projects can be implemented on an individual or departmental level. And most importantly, they are table stakes for every startup these days — must-do activities. If you want to get funded and can’t show clear adoption of Type 1 applications, you’re in trouble. But Type 1 initiatives alone will not make you an AI company from a VC perspective.

Type 2 efforts are bigger, riskier, and much more important to your survival and to your ability to attract capital. With Type 2, you are looking to create entirely new ways of approaching a vital aspect of your business, or potentially your entire business, building on generative AI.

The upside from Type 1 is a reduction in cost and increased speed/productivity — everyone is doing or will soon be doing these. The upside from Type 2 is potentially unlimited, as you are creating new ways to create and deliver value that might get you access to new customers or gain substantial competitive advantages over others who are not deeply embracing generative AI.

An example of a Type 2 innovation might be a regional B2B marketplace that currently publishes information only in English as it’s the common denominator language in the region. That marketplace now can use generative AI to cost-effectively publish information simultaneously in four local languages and enable its customers to find products/services with a conversational interface (rather than cumbersome search queries and complex filtering) using their language of choice. This Type 2 innovation opens the market to untold numbers of non–English speaking customers and also makes it faster for all customers to find what they are looking for and close the deal.

Feels like you missed the generative AI train? 5 steps for speeding ahead in 90 days by Walter Thompson originally published on TechCrunch

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You don’t need VC to develop a consumer tech product

Tom Okman Contributor
Tom Okman is the co-CEO and co-founder of Nord Security, a global leader in internet privacy and security solutions and the company behind NordVPN.

For the last decade, scoring a big round of venture capital funding has been the yardstick of success for startups across the ecosystem. After that, startups can finally get out of fundraising mode, focus on growth, reach scale and generate millions (billions?) in annual cash flows. But for many startups, venture funding isn’t necessarily the best option — for some, it’s no longer an option at all.

Now, with global venture funding in decline, bootstrapping is an increasingly important and viable way to launch and grow a startup.

Moreover, it seems like the pendulum has swung back to a time when technical innovation (as opposed to business model innovation or regulatory arbitrage) is happening in nascent spaces such as crypto, climate and generative AI. Venture capitalists may feel reluctant to invest in companies without a product they can prove is already successful with a growing customer base.

Founders of consumer tech startups can use the current market downturn as an opportunity to focus on revenue generation by building products that customers are willing to pay for.

We launched NordVPN from Lithuania in 2012. Back then, there was a lack of accessible venture capital — that year, Baltic startups merely raised $54.4 million combined compared with $2.4 billion in 2021 — which we had to factor into our corporate growth plans.

Here are three key principles bootstrapped founders should keep in mind for conceiving, launching and scaling a successful consumer product, based on our ten years of bootstrapping experience.

Double down on a key focus and do it well

When your customer is king, it usually pays to develop product thinking, which is the skill of knowing what makes a product useful to — and loved by — people. But what happens when you are building a product for a market segment that doesn’t even exist?

Use the current market downturn as an opportunity to focus on revenue generation by building products that customers are willing to pay for.

The answer: double down on a key product focus rather than explore multiple options — do one thing very well (at least initially). Your attention to detail will become a competitive advantage in time.

In the early 2000s, VPNs were mostly associated with businesses and the public sector. Consumer VPN technology was still nascent and the average online user was not familiar with it. In short, there was a lot of white space to be filled.

In 2012, it was important for us to educate people on the importance of using a VPN and why they should pay for one — and it was equally important to build a product that the ordinary internet user could, and should, use daily (addressing both functional and emotional needs).

The huge vacuum in the consumer VPN market at that point meant it was tempting to ship out any and all features, especially since the industry was still maturing then. However, our limited capital meant we had laser focus on revenue generation, which meant building a product our users loved. By prioritizing control, convenience and speed, our customer loyalty was built up over time and retention remained high in both the good and hard times.

You don’t need VC to develop a consumer tech product by Walter Thompson originally published on TechCrunch

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How to identify, interview and hire a head of growth for an early-stage startup

The waters are never calm when scaling a startup. In fact, they are typically quite choppy. However, by making the correct hire in the head of growth position, you can navigate to shore much more smoothly.

The individual you’re looking for will create and execute growth strategies, manage marketing initiatives and, ultimately, drive revenue. My more informal take on this role is that it’s someone who deeply understands growth fundamentals, has significant expertise in one to two growth pillars and knows how to build an effective team.

I’ll walk you through when and how to hire your head of growth, their archetypes, how this role stands apart from other marketing executive positions, and what to expect from this hire during their first few quarters.

Head of growth archetypes

In my decade of growth marketing, I’ve seen quite a few growth leaders who began at various startups, all possessing varying levels of experience. To make it easier, I’ve grouped these candidates into three major categories, or archetypes:

  1. Generalists: Experience across numerous growth pillars.
  2. Specialists: Deep expertise in one pillar.
  3. Tertiaries: Data, finance/VC, VC or product background.

While I’ve seen members of each category become successful as heads of growth, I strongly advise hiring from either category one or category two for seed to Series B startups.

When building a growth function from zero, it’s vital to have someone who can drive the execution for your early channels and campaigns. When it comes to category three, I’ve only witnessed success after a growth team was already in place, with their efforts centered around optimizing efforts across data analytics and product.

Outside of these three major archetypes, there are two important flavors that are consistent across the groups:

  • B2B or B2C
  • Mobile or web

These two flavors can make or break the success of your growth efforts, as their type of marketing is so distinct. Someone coming from an extensive background of web acquisition at a B2B company like Rippling would not be well-suited to run growth at a B2C consumer startup such as Spotify.

Most growth marketers will heavily index in B2B or B2C, as their careers typically stay on that path. However, it’s quite common to see growth marketers who have experience in both mobile and web acquisition, and it’s absolutely acceptable to hire them.

You’ll occasionally find a unicorn who’s a generalist and has experience in B2B, B2C, mobile and web. If you do, recruit them immediately.

Head of Growths come in many flavors.

Heads of growth come in many flavors. Image Credits: Jonathan Martinez

How to interview

I’m fortunate to have been on both sides of the interview table for head of growth positions, largely at tech B2C startups, so I have a good sense of what makes for amazing interviewees.

Below are example questions to ask and a few case studies I’ve seen work well:

Interview questions:

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Europe is more of a fuzzy tech cloud than a functioning ecosystem

Haje Jan Kamps Contributor
Haje Jan Kamps is the director of portfolio at Bolt, a venture capital firm focused on hardware startups and enabling technologies. He was also a staff writer for TechCrunch.
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Whenever I spend time in the European startup world, a lot of the conversation is focused on how it can differentiate itself. One of the recurring questions is: How do we build a startup ecosystem? That’s an excellent question.

The beginnings of an ecosystem are there, but unlike in the U.S., where there are a handful of major hubs attracting the bulk of the talent and investment, in Europe, there is an appetite for experimentation that fails to fully settle into a coherent whole.

Looking to Silicon Valley might be a trope, but the San Francisco Bay Area is by far the most mature ecosystem around. California attracted more than $100 billion of venture investment in 2022. New York is in a distant second place with around $30 billion, followed by Massachusetts (or more specifically, Boston), with around $20 billion. Europe, in comparison, saw around $100 billion of investment in 2022. That sounds like a big number, but compare the size of the economy of Europe versus that of California.

Europe may be in a state of rapid growth, but as an asset class, VC is lagging behind. For every person living in Europe, $134 dollars are invested in the local ecosystem. For California, the same number is $2,650. Image Credit: Haje Kamps / TechCrunch

You can find office buildings and fast internet in most places, so how did a sprawling area around San Francisco become a working ecosystem? The history is long and complex, and hard to replicate: Stanford University engineering professor Frederick Terman was focusing on radio engineering in the 1940s. Fueled by the Cold War and a lot of defense money, he built a department and taught a bunch of the people who would found the first wave of tech startups in the area.

Stanford created a business park to go along with its research activities, and it kept evolving with the times. The region found itself in an upward spiral: More money invested meant that more engineering talent flocked to Silicon Valley, which sparked more innovation, which led to more tech companies, which in turn meant more defense money and the first few private investors looking to Silicon Valley for opportunities. Lockheed opened a plant in Sunnyvale, mostly because that’s where it could find engineers. Bill Hewlett and Dave Packard founded HP in 1939, and Shockley Semiconductors was founded in 1956 — the same year its namesake, William Shockley, was awarded the Nobel Prize for co-inventing the transistor. Early employees at Shockley left to found AMD and Intel, and from there, the rest is history: Silicon Valley had such a concentration of funds, talent and tech, that it was almost unstoppable.

Fast-forward some 70 years and Silicon Valley has only continued to grow. For startups, the way this shows up is that a lot of people got very wealthy from tech, and they further accelerated the ecosystem by founding new companies. But — crucially — they also became angel investors and advisers to others in the ecosystem. And because those acquiring other businesses are also often based in Silicon Valley, integrating the tech and the staff becomes a lot easier.

So how does this relate to Europe? Well, according to top European VC Creandum’s recent report, there are 65 cities hosting 514 “tech hubs” on the continent. Of course, it’s positive that the European startup scene is evolving and growing, but even after a couple decades of trying to make ecosystems thrive, Europe appears to be spinning its wheels. According to the report, “Europe finally has the pieces in place to challenge the US as the world’s leading tech ecosystem.” It sounds good, but there’s still a lot of work to be done before there’s a fully functioning, self-sustaining startup ecosystem in place. The truth is, every locale is trying to do it differently. That means there can’t be a single, force-of-nature strength ecosystem; instead, the result is a smattering of promising ecosystems that don’t truly get the job done.

Europe is more of a fuzzy tech cloud than a functioning ecosystem by Haje Jan Kamps originally published on TechCrunch

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Should you move to a new state for tax savings before selling your startup?

Peyton Carr Contributor
Peyton Carr is a financial adviser to founders, entrepreneurs and their families, helping them with planning and investing. He is a managing director of Keystone Global Partners.
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For company founders and shareholders with an exit on the horizon, this isn’t a myth — a move for tax reasons can make a lot of financial sense.

In tech hubs like the Bay Area and New York City, the highest tax brackets are at 14.4% (as of January 1, 2024) and 14.8%, respectively. In contrast, states like Florida and Texas have no state income tax, meaning there’s no capital gains tax at the state level.

Let’s consider the numbers: On a $30 million exit, a founder could save approximately $4.3 million by moving from California to Florida or approximately $4.4 million by moving from New York City to Florida. That’s a lot of incentive to pull up the stakes and head to Miami.

However, many times it’s not that simple. We all know that moving can be a tough decision, especially for those with strong roots in their community. Leaving behind your favorite golf course, local ski mountain, and your friend group can have a serious impact on your quality of life. And it can be heart-wrenching to pull your kids away from the home, friends, and school they know and love.

This is where some people can get into trouble.

What you need to know about moving to save on taxes

Paying less in taxes isn’t as simple as packing up, skipping town, and resurfacing with a new address in a tax-friendlier state.

As tempting as it may be, you can’t keep a foothold in Silicon Valley while dipping your toe in the Gulf Coast — and still save on taxes. The kids may be unable to stay in their Manhattan private school while you relocate to Miami.

As tempting as it may be, you can’t keep a foothold in Silicon Valley while dipping your toe in the Gulf Coast — and still save on taxes.

Living in both states won’t save you here; when it comes to taxes, you must be all-in at your new address, or you’ll likely owe taxes at your old address.  Unfortunately, some may not realize this until after they have spent a lot of time, money, and emotional investment.

Every state has its own rules for determining your residency for tax purposes, and you will not be able to fly under the radar if you’re a high-net-worth individual or top earner. High-tax states like New York or California pay especially close attention to those in the highest tax bracket. If you stop paying taxes at the state level, chances are the state will notice and challenge your new residency claim.

In other words, your move is likely to trigger an audit.

In particular, California’s Franchise Tax Board is known to be vigilant in monitoring individuals who attempt to terminate their California residence, making it all the more crucial to thoroughly plan and document your move.

Additionally, it’s important to consider the complexities of community property laws, which may impact your tax exposure if you have a spouse residing in California, even if you move to a lower-tax state. Proper legal and tax advice is essential to navigate these complexities and ensure a smooth transition.

Many people mistakenly think that splitting time between states and claiming the more favorable tax jurisdiction is easy. But when you have the means to travel and maintain more than one home, this doesn’t mean you get to choose the domicile that works most favorably for you when tax time comes. Simply spending 183 days of the year outside your high-tax state isn’t likely going to shrink your tax obligation.

Even after leaving high-tax states like New York or California, it’s important to be aware of potential tax obligations tied to passive income sources within those states. For example, if you continue to have passive income from partnerships, investment properties, or other sources within New York or California, you’ll need to file a nonresident return and pay taxes on that income in those states.

Additionally, having passive income sources in your former state can increase the likelihood of a residency audit. As a result, it’s important to carefully consider whether retaining those investments producing state-specific income aligns with your overall financial and tax planning goals.

Preparing to move

If you’re considering a move to a lower-tax state, it’s crucial to plan ahead and be prepared. The more time you give yourself before your company’s exit, the better off you’ll be. We recommend making a clean break from your high-tax state several years in advance to ensure a smooth transition. It’s also wise to assume that you may be subject to a state tax audit, so keep meticulous records and be prepared.

Should you move to a new state for tax savings before selling your startup? by Walter Thompson originally published on TechCrunch

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Ask Sophie: What do I need to know about getting a J-1 exchange visa?

Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.
More posts by this contributor

Here’s another edition of “Ask Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

TechCrunch+ members receive access to weekly “Ask Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Dear Sophie,

I just found out that I’ve been selected as a trainee in the J-1 exchange program.

I’m currently in the U.S. on a B-1/B-2 visitor visa. The sponsoring company would like me to start in August. I heard it can take several months to change my status to a J-1. Is there a way to get a J-1 faster?

Is there anything I should know about the J-1, particularly if I later decide to stay in the U.S. once the J-1 program ends?

— Techie Trainee

Dear Techie,

Congratulations on being selected as a J-1 educational and cultural exchange trainee!

The purpose of the J-1 is to exchange knowledge between countries. Check out my podcast that provides an overview of the J-1 as well as the waiver process. The J-1 visa is intended for people from around the globe to work or study in the U.S. and then take their newly acquired knowledge and skills back to their home country.

The Trainee J-1 usually lasts 18 months. Some J-1 holders are required to return to their home country for at least two years once your J-1 status ends. The waiver process can be particularly tricky. I recommend you consult an immigration attorney before you begin your program to confirm if you are subject to the two-year foreign residency requirement. They can also help you with any J-1 change of status or waiver application as necessary.

Good news: USCIS just rolled out premium processing for J-1 changes of status, shortening the process for individuals currently inside the United States!

Sophie Alcorn headshot

Image Credits: Sophie Alcorn

Keep in mind: non-immigrant intent

Most U.S. visas such as the B-1/B-2 for visitors, J-1 for exchange visitors, and F-1 for students require their holders to have non-immigrant intent: it’s your job to prove to the U.S. government that you plan to depart the United States at the end of your program. Evidence of immigrant intent—your intention to live permanently in the U.S. by obtaining a green card—is cause for immigration officials to deny your visa. Other factors, like having a U.S. citizen significant other, or stating that you are planning to work in the U.S. long-term, could also be interpreted as evidence of your immigrant intent.

For the J-1, you will need to demonstrate to immigration officials that you intend to eventually return to your home country by maintaining a residence in your country or showing you have ties to your country of residence. The reason the State Department administers this program is to promote the flow of knowledge around the world. (Remember, before the internet, we generally had to physically travel to share knowledge, information, and network with people in other countries!)

How to get a J-1

After you enroll in a program, it will issue you a Form DS-2019, which is the Certificate of Eligibility for Exchange Visitor (J-1) Status. Most people as of recently have been applying for new J-1 visas at the consulate and receive a multiple entry visa. The duration is based on whatever reciprocity agreements the State Department has in place with the government of your country of citizenship.

Ask Sophie: What do I need to know about getting a J-1 exchange visa? by Walter Thompson originally published on TechCrunch

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Trying to close a Series B in 2023? Read this first.

Mark Chaffey Contributor
Mark Chaffey is CEO of hackajob, a career marketplace for technology job seekers and employers.

Despite ongoing economic uncertainty, there will always be a path forward for determined founders with strong ideas and smart investors with an eye for opportunity. But make no mistake, the challenges are real and sizable. Global funding in Q1 2023 was down 53% compared to Q1 2022, a precipitous drop hastened by broader market turbulence and fears of a prolonged downturn.

And the stagnation wasn’t limited to just late-stage funding either. Crunchbase analysis revealed that Series B investment in the second half of 2022 was down over 60% from the same period the year before—putting Series B investments on track to come in at the lowest quarterly level in more than three years.

With this backdrop, our company began our Series B round of fundraising in early 2023. We went into the process aware that our sector has historically suffered in a down economy, but we chose to focus on the positives—namely that our ability to close in this environment would showcase the quality of our business, and that any investors willing to make an investment despite the challenges would result in a stronger long-term partnership.

How we closed our $25M Series B in April 2023: 5 key factors

For us, we knew we were ready for a Series B when:

  • we were cash efficient with a burn multiple under 1
  • we had proven product-market-fit and go-to-market fit with excellent unit economics;
  • we had strong retention, in our case a net revenue retention rate (NRR) of 149%.

From there, it was all about execution. Here are five other strategies that helped us close our Series B:

Set the foundations to scale: Team, process and expertise

Series B rounds are all about scaling the business. The scrambling and existential doubt you had as an entrepreneur won’t go away, but by this point, you should have built a strong executive team around you that is, frankly, more skilled at scaling their individual functions than you are. As soon as you land the Series A, start to lay a real business foundation — pivoting from a survival mindset to a sustainable one.

We embraced this and after closing our Series A, we built the groundwork throughout 2019 that enabled us to embrace the unique opportunity that the COVID-19 pandemic created. Ultimately, this strong foundation led us to close our Series B round in an extremely challenging market.

There will always be a path forward for determined founders with strong ideas and smart investors with an eye for opportunity.

Your org chart doesn’t have to be fully built at this stage, but you should have a plan to scale. When building out our exec team, we balanced homegrown talent that had progressed internally, with individuals that had achieved success at the next level of scale than we operated currently.

When raising a Series B, it is important to hire execs with experience for this stage of the company. A CRO that is used to scaling from $50M ARR to $100M ARR has a very different skill set than what you need to scale from $10M to $30M ARR. For example, when looking for a VP of finance, we wanted someone with a track record of closing Series B and C investment rounds, as that was the next step for us.

Understand potential investor reservations, then create a plan to counter them

When fundraising, a common piece of advice for founders is to start with your tier 3 funds first and work your way up to pitching tier 1. The logic behind this is it gives you the opportunity to learn what questions investors will ask and which objections you might receive before you sit down with the big guns.

This didn’t work for us. The challenge with starting with “tier 3” funds is that the “tier 1” funds often have more context about your space (at least they should if you’ve tiered correctly) and therefore the quality of the questions they ask are far superior to the ones you’ve been prepping on from “tier 3” fund conversations.

Instead, we sought to understand the common objections investors would have about investing in our business through informal catch-up calls when we weren’t in fundraising mode. This enabled us to understand potential investors’ objections upfront without going through the “tier 3” to “tier 1” process while still addressing those objections directly. In these introductory conversations, we were frequently asked the following:

Trying to close a Series B in 2023? Read this first. by Walter Thompson originally published on TechCrunch

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AI is not a panacea for software development

Brett Stevens Contributor
Software.com co-founder Brett Stevens was previously part of the product marketing team at Delphix, a API-first data platform for the multi-cloud. He holds a Bachelor of Science in Mechanical Engineering from Brown University and currently resides in Brooklyn.
Geoff Stevens Contributor
Software.com co-founder Geoff Stevens previously worked with the investment team at Volition Capital, a growth equity firm investing in tech-enabled companies. He holds a Bachelor of Arts in Applied Mathematics from Harvard College and currently resides in Seattle.

How much more productive are developers using AI coding tools? Recently, there has been a lot of speculation that AI makes developers 2x, 3x, or even 5x more productive. One report predicts a tenfold increase in developer productivity by 2030.

The irony, however, is that the engineering community has, for the most part, not been able to agree upon a universal way to measure engineering productivity. Some have even rejected the idea altogether, arguing that most metrics are flawed or imperfect. Most of the claims around AI improving productivity today are qualitative — based on surveys and anecdotes, and not on quantitative data.

How can we make judgments about AI without first agreeing on how to measure productivity? If we learned anything from the remote work experiment, it’s that we floundered without data to inform our decisions — shifting back and forth between office, remote, and hybrid strategies based on dogma and ideology instead of data and measurement.

We’re on a path to repeat ourselves with AI. To move forward, we must first understand and quantify its impact.

The risk of falling behind

The current hype around AI may give some of us reason to pause — due to the unknown impact to quality, the potential risk of plagiarism and other factors. The most cautious companies have entered a holding pattern, waiting to see how it all plays out.

For tech-enabled businesses, however, the risk of falling behind is existential. AI is a double accelerant, impacting both what and how companies build. Companies that invest in AI today have the potential to double dip by bringing to market not only new AI-powered products, but also products to market faster and more cheaply.

Most companies have been focused on the what, but AI could be the driver for the how, creating the 10x or even 100x engineering team. Companies that figure out how to quickly cross the chasm — by optimizing AI tools in the most efficient and impactful way — and reach the plateau of productivity faster will benefit from a head start for years to come. The risk of doing nothing is too high.

Understanding the trade-offs

To someone with a hammer, everything looks like a nail. So, too, with AI.

According to a recent GitHub report, the top benefit of AI coding tools cited by developers was improving their coding language skills. Another key benefit is automating repetitive tasks, like writing boilerplate code. A recent experiment by Codecov showed that ChatGPT performs well at writing simple tests for trivial functions and relatively straightforward code paths.

AI is not a panacea for software development by Walter Thompson originally published on TechCrunch