Category: TECHNOLOGY
Revenue-based financing: A new playbook for startup fundraising
A few years ago, founders only had two options when starting a company — bootstrap yourself or turn to VC money, and they would use that money primarily to pursue growth. Later on, venture debt started to gain prominence. While non-dilutive, its problems are similar to that of VC equity: It takes time to secure, involves warrants, isn’t very flexible and not every startup can get it.
But in recent years, more options have become available to founders. Most startups can now avail non-dilutive capital, and purpose-specific financing has entered the fray.
While venture capital remains the most popular avenue for startups, founders should take advantage of all the financing options available to them. Using an optimal combination of capital sources means using cost-effective, short-term funding for imminent goals, and more expensive long-term money for activities with uncertain returns on the horizon.
What is revenue-based financing?
Let’s define it as capital provided based on future revenue.
While venture capital remains the most popular avenue for startups, founders should take advantage of all the financing options available to them.
So what is unique about revenue-based financing? Firstly, it is quick to raise. Compared with the months-long process usually involved with other forms of equity or debt financing, revenue-based financing can be set up in days or even hours. It is also flexible, meaning you don’t have to withdraw all the capital up front and choose to take it in chunks and deploy it over time.
Revenue-based financing also scales as your credit availability increases. Usually, there’s only one simple fee with fixed monthly repayments.
How should startups evolve their financing playbook?
To optimize fundraising using different sources of capital, startups should think about aligning short- and long-term activities with short- and long-term sources of funds. Revenue-based financing is shorter term in nature, and a typical term ranges between 12 and 24 months. Venture capital and venture debt are longer-term capital sources, with a typical term of two to four years.
A startup’s short-term activities may include marketing, sales, implementation and associated costs. If a startup knows its economics, CAC and LTV, it can predict how much revenue it will generate if it invests a certain amount in growth. Because the return on these activities may be higher than the cost of revenue-based financing, startups should use revenue-based financing to fund initiatives that will bear fruit soon.
Revenue-based financing: A new playbook for startup fundraising by Ram Iyer originally published on TechCrunch
https://techcrunch.com/2022/11/11/revenue-based-financing-a-new-playbook-for-startup-fundraising/
Australia tells Medibank hackers: ‘We know who you are’
The Australian Federal Police claims to have identified the cybercriminals behind the Medibank ransomware attack, which compromised the personal data of 9.7 million customers.
AFP Commissioner Reece Kershaw said on Friday that the agency knows the identity of the individuals responsible for the attack on Australia’s largest private health insurer. He declined to name the individuals but said the AFP believes that those responsible for the breach are in Russia, though some affiliates may be in other countries.
In a tweet, Australian Prime Minister Anthony Albanese, whose own Medibank data was stolen, said the AFP knows where the hackers are and are working to bring them to justice.
Kershaw said that police intelligence points to a “group of loosely affiliated cyber criminals” who are likely responsible for previous significant data breaches around the world, but did not name victims.
“These cyber criminals are operating like a business with affiliates and associates who are supporting the business,” he added, pointing to ransomware as a service operation such as LockBit. On Thursday, a dual Russian-Canadian national linked to the LockBit operation was arrested in Canada.
The hackers behind the Medibank breach have previously been linked to the high-profile Russian cybercrime gang REvil, also known as Sodinokibi. REvil’s once-defunct dark web leak site now redirects traffic to a new site that hosts the stolen Medibank data, and the hackers behind the breach have also been observed using a variant of REvil’s file-encrypting malware.
The Russian Embassy in Canberra was quick to rebuff allegations that the Medibank hackers are based in Russia. “For some reason, this announcement was made before the AFP even contacted the Russian side through the existing professional channels of communication,” the embassy said in a statement on Friday. “We encourage the AFP to duly get in touch with the respective Russian law enforcement agencies.”
Russia’s federal security services FSB (formerly the KGB) said in January that REvil “ceased to exist” after several arrests were made at the request of the U.S. government. In March, Ukrainian national Yaroslav Vasinskyi, an alleged key member of the REvil group linked to an attack on U.S. software vendor Kaseya, was extradited from Poland to the U.S. to face charges.
“Even after a series of law enforcement operations against REvil, the gang and its affiliates still seem to keep returning, based on the analysis of the latest REvil ransomware sample,” Roman Rezvukhin, head of malware analysis and threat hunting team at Group-IB, tells TechCrunch.
Kershaw said on Friday that the AFP, along with international partners such as Interpol, will “be holding talks with Russian law enforcement about these individuals.”
“It is important to note that Russia benefits from the intelligence-sharing and data shared through Interpol, and with that comes responsibilities and accountability,” Kershaw said. “To the criminals: We know who you are, and moreover, the AFP has some significant runs on the scoreboard when it comes to bringing overseas offenders back to Australia to face the justice system.”
While the AFP has successfully extradited people from Poland, Serbia, and the United Arab Emirates in recent years to face criminal charges in Australia, extraditing Russian hackers is likely to be challenging. In 2018, Russian President Vladimir Putin declared that “Russia does not extradite its citizens to anyone.”
Despite action by the AFP, the Medibank breach continues to worsen following its decision to refuse to pay the cybercriminals’ ransom demand. On Thursday, the attackers’ dark web blog posted more stolen data, including sensitive files related to abortions and alcohol-related illnesses. The cybercriminals claimed that they initially sought $10 million in ransom from Medibank before reducing the sum to $9.7 million, or $1 per affected customer, the blog said.
“Unfortunately, we expect the criminal to continue to release stolen customer data each day,” Medibank CEO David Koczkar said on Friday. “These are real people behind this data and the misuse of their data is deplorable and may discourage them from seeking medical care.”
Australia tells Medibank hackers: ‘We know who you are’ by Carly Page originally published on TechCrunch
https://techcrunch.com/2022/11/11/australia-tells-medibank-hackers-we-know-who-you-are/
Elon Musk Made an Unusual Request in Fallout With Top Lieutenant
As Tesla’s stock rose rapidly, Mr. Musk focused on whether compensation for employees matched their contributions, and he asked a top deputy to forfeit some of his unvested equity.
FTX Customers Wonder If They’ll Ever See Their Money Again
The cryptocurrency exchange FTX, which is scrambling to raise money to cover a shortfall of up to $8 billion, paused customer withdrawals at its international unit this week.
The Difficult Search for Dangerous Space Junk
Earth’s orbit is filling up with satellites, rocket bodies and debris. The companies hoping to profit from the cleanup job need a better picture of the problem.
Prediction Capital hits first close of €30M for new fund to back startups addressing UN SDGs
Another day, another dollar, and another VC fund launches. But, refreshingly, this one will specifically address the United Nations Sustainable Development Goals.
Prediction Capital is a new VC sprung out of the Swiss Family Office infinitas Capital, the investment firm of former entrepreneur and investor Robin Lauber, and formed together with Christopher Chuffart and Kilian Graulich. The fund, which has hit its first close of €30M, will focus on startups covering ConsumerTech and FinTech mainly in the German-speaking DACH region.
Another focus will be on businesses that embrace the UN’s Sustainable Development Goals (SDGs), in particular Good Health and Wellbeing, Quality Education, Gender Equality, Decent Work and Economic Growth, Reduced Inequalities, Responsible Consumption and Production, Climate Action, Peace, Justice and Strong Institutions and Partnerships for the Goals.
So far it’s invested in Heritas, Foodetective (Online Infrastructure & Intelligence of the Merchant Industry
, raised $2M) and House of Change.
Lauber has been in real estate but also brought Dunkin’ Donuts to Switzerland where he successfully exited the business in 2020. Chuffart was most recently at Mountain Partners, a Zurich based VC before moving to i2i Logic (Australian corporate finance FinTech) to open their European HQ. Graulich is former McKinsey & Company.
Prediction Capital hits first close of €30M for new fund to back startups addressing UN SDGs by Mike Butcher originally published on TechCrunch
RIP to FTX?
Image Credits: TechCrunch
We had to talk about the news that rocked the crypto world this week in our Thursday episode: the Binance/FTX deal that never was. To begin, we gave you a rundown of WTF just happened with the beef between two of the largest crypto exchanges in the world and how Sam Bankman-Fried’s storied exchange fell so far so fast, bringing down investors, cryptocurrencies and other companies in the space tumbling down with it.
Welcome to Chain Reaction, where we unpack and explain the latest in crypto news, drama and trends, breaking things down block by block for the crypto curious.
You can listen to the episode below:
Once we ran through the background behind the situation that’s been unfolding in real-time this week, we shared our thoughts on the massive implications this fiasco might have for the rest of the crypto industry, from venture capitalists and startups to regulation across the globe.
It’s a fascinating backdrop for our conversation at our crypto event in Miami next week, where we’ll be chatting with Binance CEO Changpeng Zhao (CZ), the billionaire who is seen as the catalyst for FTX’s downfall. You can use the promo code REACT for 15% off a General Admission ticket to the event to hear from CZ and plenty of other crypto market players about what the future of this tumultuous industry might hold in the coming months.
Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the action.
RIP to FTX? by Anita Ramaswamy originally published on TechCrunch
https://techcrunch.com/2022/11/10/ftx-binance-crypto-exchange-deal-web3-chain-reaction-podcast/
Elon Musk Raises Specter of Twitter Bankruptcy Amid Executive Turmoil
Twitter suffered additional senior executive departures as owner Elon Musk said bankruptcy is a possibility for the company.
Oracle Hires Chief Legal Officer From Facebook’s Blockchain Project
Stuart Levey most recently served as the CEO of Meta Platform’s cryptocurrency project, which sold its assets earlier this year.
More key Twitter execs just quit, including the head of trust and safety
Hours after news broke that Twitter lost top cybersecurity executive Lea Kissner, another round of departures deepened the company’s ongoing crisis.
Platformer’s Zoë Schiffer first reported that Twitter’s Head of Trust and Safety Yoel Roth quit the company Thursday after just two weeks under Musk’s leadership. Robin Wheeler, who was elevated to lead Twitter’s marketing and sales teams, has also reportedly left the company, according to Bloomberg.
Roth, who remained a public face at the company in the brief Musk era and tweeted reassurances about the company’s moderation efforts, is an especially shocking departure. But both executives played a visible role in Musk’s version of the company. Just yesterday, Roth and Wheeler moderated a rambling Twitter Space in which Musk shared his vision for the company.
Twitter also lost its chief privacy officer Damien Kieran and chief compliance officer Marianne Fogarty on Thursday along with the departure of its CISO. The latest wave of resignations on top of Musk’s erratic behavior and his haphazard mass layoffs are likely to crater whatever advertiser and regulator trust remained in Musk’s ability to run the company.
I’ve made the hard decision to leave Twitter. I’ve had the opportunity to work with amazing people and I’m so proud of the privacy, security, and IT teams and the work we’ve done.
I’m looking forward to figuring out what’s next, starting with my reviews for @USENIXSecurity
— Lea Kissner (@LeaKissner) November 10, 2022
Per multiple reports, Musk also convened an impromptu all-hands meeting at the company on Thursday, painting a dire picture of its financials and stating that “bankruptcy isn’t out of the question.” Twitter’s new owner repeated his assertion that the company would no longer allow remote work, suggesting that anyone who didn’t report to the office in person would be fired.
This story is developing…
More key Twitter execs just quit, including the head of trust and safety by Taylor Hatmaker originally published on TechCrunch
https://techcrunch.com/2022/11/10/twitter-elon-musk-resignations-yoel-roth-robin-wheeler/