This year I attended EU-Startups Summit for the first time. The 2022 edition of this young but quite ambitious conference took place in Barcelona in May (a couple of days ago).
During the conference, I lived some very interesting experiences and got back home with some important takeaways that may be relevant for most founders trying to raise capital these days.
Fuck Me I’m Famous!
During the last day of the summit, while I was working on my laptop in one of the few spots available at the Palau de Congressos, a guy approached me, introduced himself as Alex, and told me he knew me, my business, and my blog (the same one you are reading now).
I feel flattered and invited him to sit down. He told me he had launched his business in Estonia a couple of years ago, becoming a digital nomad and traveling the world while managing his business online. He now had a quite cool and successful business and was living the life of his dreams, and thanked me for being a pivotal part of this transformation.
I cannot express with words how rewarding hearing that was, how well it made me feel. I have been writing on this blog for more than 5 years now. Rarely do I have the blessing of receiving that feedback, of knowing that my story has helped others become freer or more fulfilled with their lives.
We Are Going Through An Investment’s Bear Market
These are not good times for fundraising. I had the chance of speaking to both investors and seasoned entrepreneurs, and all of them agreed that much has changed since 2020. The world is on the verge of a recession. The effects of the COVID-19 pandemic, the Russian invasion of Ukraine, and the latest turmoil in the cryptocurrency world… all is pointing in that direction, as already pointed out by players such as Wall Street in the US or Deutsche Bank in Europe.
And that is not good news for founders looking for investment. Multipliers have gone down dramatically from around 25-28x last year to around 6x.
So if you are raising funds right now, that leaves you with an awkward choice… Should you wait until the situation stabilizes, or should you accept a lower valuation and hence value for a stake in your company?
It’s not an easy decision, and the worst thing is, nobody knows when this bear market is going to end. I asked Nigel Verdon, co-founder and CEO of Railsbank, and he seemed to agree that you should try to reduce expenses as much as possible. If you are running out of cash and need a new round, go for it, but take into account that the amount will be much lower than you could obtain in a better scenario.
If you, on the contrary, are not in urgent need of money, or are profitable (like in the case of my company, Companio), it is better to wait for better, more bullish days.
Diversity Is Still A Pending Subject For The Investment Ecosystem
Once more, I was able to verify that diversity is still a pending subject in the investment ecosystem. One of the speakers, talking about diversity and the status quo of investors, angels, and VC firms, mentioned that, while they fund the most innovative startups of the XXI century, they seem to be stuck in the XX century.
Ironically, when this speaker talked about diversity, she stopped shy of addressing what real diversity is, focusing mostly on the male/female ratio. It is the XXI century, and diversity is much more than that, including ethnicity and the LGBTQ+ community. That’s why I have decided to launch a new project to support real inclusivity and diversity in the ecosystem, but I will talk about that another day.
EU-Startups Summit was a very interesting event, one that has brought many important takeaways, if not in terms of investment, at least in terms of personal experiences. Some of these lessons are definitely valuable not just for me, but for my business, and any founder out there trying to raise capital right now.
Did you visit EU-Startups Summit? What was your experience?