Save your equity, LatAm crypto survey, where the runway ends – Nob6

Money doesn’t need to be protected from sudden vibrations or direct sunlight, so the term “dry powder” strikes me as a poor metaphor for the mounds of cash investors were dropping on startups just a few months ago.

“What’s crazy to me is that some of these companies are still in the seed stage backed by very large firms who dabbled at this stage,” said Elizabeth Yin, a general partner and co-founder at pre-seed-focused Hustle Fund.

“An extra $200,000 or $500,000 wouldn’t make a dent in a billion-dollar fund even if it went horribly.”

Rebecca Szkutak interviewed Yin and Kirby Winfield, founding general partner at pre-seed-focused Ascend, about the sudden, urgent funding requests they’ve recently received from founders with short runways.

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“I had one cross my desk yesterday where a brand-name VC led the seed, which they are now calling a pre-seed,” Winfield told Nob6.

“I know this company. I know they raised a pre-seed and a seed round and are now coming back around and saying, it was pre-seed and now we are raising a seed.”

With more investors content to wait things out, a traditional three-month fundraising timeline might stretch on for six. Or even longer.

As a result, founders are stuck with potentially unwelcome options, such as marking down their valuations and/or accepting flat and down rounds.

On Monday, we’ll run columns with practical advice for exploring both of those scenarios. In the meantime, have a great weekend, and thanks very much for reading.

Walter Thompson
Editorial Manager, Nob6+
@yourprotagonist

10 steps for managing layoffs respectfully

As I’ve written previously, I decline most guest columns we receive, particularly ones that explain basic best practices. Rules are made to be broken, however.

This 10-point guide to managing layoffs with empathy and respect can help inexperienced managers find their way through the worst part of running a startup: letting people go.

“People will remember this day for the rest of their lives,” says Nolan Church, co-founder and CEO of Continuum, previously chief people officer at Carta and head of talent at DoorDash.

“They can remember it one of two ways: Either you surprised them with bad news and treated them like cattle, or you did all you could to look out for them and help them navigate to the next chapter.”

Here’s how to protect your equity if you get laid off

Take note, startup workers: The same people who welcomed you aboard when you signed your offer letter are now looking for places to save money so they can keep the company afloat.

Reducing headcount is another way for founders to claw back equity, as many workers who’ve been laid off will not have enough cash to exercise all of their vested options. Once those options expire, they’ll go back to your (former) employer.

If you work for a startup that extends the traditional 90-day post-termination exercise window, count your blessings.

If you don’t, this TC+ guest post contains useful advice for budgeting, negotiating and strategizing to save your hard-won equity.

5 investors explain why Latin America is poised to weather the crypto winter

Even as a cohort of crypto companies continue their calamitous collapse, investors who back DeFi startups in Latin America are “positioning themselves for a rebound,” reports Anna Heim.

She surveyed five investors who have staked companies in the region’s crypto and DeFi sector to learn more about how their ethos has changed since winter began and why consumer adoption in LatAm is stronger than in other markets:

• Matias Nisenson, co-founder, DeFi Wonderland
• Christine Chang, head of corporate development and ventures, Tribal
• Patricio Jutard, co-founder and general partner, Newtopia VC
• Claire Diaz-Ortiz, startups committee chair, VC3; scout, Kleiner Perkins
• Andy Areitio, general partner, TheVentureCity

Dear Sophie: Questions about green cards and EB-2 priority dates

Dear Sophie,

I’ve been on an H-1B since 2011. I have an EB-2 I-140 approved with a priority date in April 2015. I’m Indian by birth, so I know I’m going to be waiting a long time to get a green card.

As an experienced cybersecurity professional, I think I could qualify to apply for an EB-2 NIW. Will there be any benefit from applying for an EB-2 NIW now?

— Idealistic from India

The experiment of force-feeding late-stage startups infinite money is wrapping up

It’s not your imagination: After a deluge, it has stopped raining venture capital.

According to CB Insights’ State of Venture Q2 2022 Report, global venture funding decreased by 23% quarter over quarter, the second-largest drop in a decade.

Mega-rounds larger than $100 million took a nasty hit: In Q4 2021, they accounted for six of every 10 dollars invested in private-market capital. In Q2 2022, that fell to 47%.

“That is a swoon for the ages,” writes Alex Wilhelm.

Pivoting your startup in a bear market: Become undeniably fundable

Every founder is searching for ways to conserve cash at the moment, but a laser-focus on saving money instead of creating efficiencies will only delay the inevitable.

In July 2022, investors will not back companies that can’t demonstrate proficiency in five basic KPIs, according to Kraig Swensrud, founder and CEO of Qualified.

“We’re not going back to the sugar high of the past decade anytime soon, but with integrity, strong leadership and operational efficiency, we can not only survive, but thrive.”

Pitch Deck Teardown: Forethought’s $65M Series C deck

Last month, enterprise reporter Ron Miller spoke to Forethought CEO Deon Nicholas about the pitch deck his company used to nab a $65 million Series C round in 2022.

This week, Forethought shared 23 slides with us for analysis, including an eye-catching advisor/investor slide that includes Gywneth Paltrow, Sean “Diddy” Combs and Robert Downey, Jr.