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as venture funding The momentum continues, with founders scrambling to extend their runways regardless of how much cash they have in the bank. But startups in dire need of funding are in dire straits.
Last week, I wrote about the current state of bridge financing after many early seed investors started getting emails from companies — some desperate — for more time with cash. To the investors, it looks like everyone else is struggling. But while founders are reporting that growing across the board is harder, it seems harder for some than others.
Wael Ashshowaf, founder and CEO of Rights, a social justice app that helps people learn what their rights are in different situations, thinks founders like him are aiming for more impactful narratives. The company told TechCrunch that it has several verbal commitments for bridge financing this year — ahead of the actual round next year — but all investors have spent weeks writing checks.
“You know there’s a lot of money out there, but you feel like it’s hard to get those checks.” Ilian Savodivkar, founder of Nabu
“Investors are responding. [startups] A much more certain bet than the previous and unproven ones,” Ashshowaf said. “For us in the impact space, the line between a business and a for-profit corporation or social venture works. [the investment opportunity] They find it much harder to digest than to produce a gadget.
Also, VCs seem to focus on backing startups with meaningful revenue numbers and customer base. David Astoria, founder and CEO of broadcast media startup Pranos, attributes the company’s recent bridge funding success to current traction. Pranos thinks that having cash in the bank earlier was a big positive for the investors.
“I think you have to make sure you’re building the bridge with these bridge financing investors roadblocks,” Astoria said. He added that a banker recently said, “We can help you build a bridge, but we’re not going to try to help you build a pier.”
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