Extra Crunch Roundup: Adtech, Mailchimp & ICPs - TechCrunch

Adtech Startup Valuations Surge Post-Pandemic

Significant advancements within the realm of digital advertising have led to increased valuations for adtech startups following the onset of the pandemic. However, a knowledgeable source suggests that investors may be overlooking crucial opportunities.

Industry expert Casey Saran observes that “adtech is currently experiencing a period of substantial growth.”

While established, publicly traded companies have garnered considerable attention, smaller transactions reveal a growing demand for innovative creative adtech solutions.

Five Reasons for Increased VC Investment

Saran outlines five key justifications for venture capitalists to amplify their investment in adtech startups focused on developing the next wave of creative tools.

A special offer is available for full access to Extra Crunch articles. Utilize the discount code ECFriday to receive a 20% reduction on one- or two-year subscriptions.

Disrupt 2021 Panel Discussion: Supporting Underrepresented Entrepreneurs

A panel discussion titled “The Path for Underrepresented Entrepreneurs” will be moderated by me on Wednesday, September 22nd, at 9:05 a.m. PT during Disrupt 2021.

This conversation will delve into the specific obstacles encountered by founders from historically disadvantaged communities.

We will also explore the strategies they have employed and the necessary systemic changes required to foster genuine progress.

Featured Panelists

The discussion will feature insights from:

• Hana Mohan, Founder & CEO of MagicBell
• Leslie Feinzaig, Founder & CEO of Female Founders Alliance
• Stephen Bailey, Co-founder & CEO of ExecOnline

Audience participation will be encouraged through a question-and-answer session following the panel discussion. Thank you for reading Extra Crunch, and enjoy your weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Securing Your Initial Customer: 5 Essential Steps

Launching your product is a significant achievement. However, a crucial question remains: how well do you truly understand those you intend to serve?

Businesses lacking a defined ideal customer profile and a comprehensive SWOT analysis often rely heavily on speculation and gut feelings. While this approach can occasionally succeed, it frequently results in unfavorable outcomes.

Bryan Dsouza, product marketing lead at Grammarly, details five fundamental prerequisites for effective customer acquisition in a recent guest article. He guides readers through the core principles of developing customer personas aligned with company objectives.

According to Dsouza, diligent execution of these elements can virtually assure the attainment of your first customer. Success hinges on thoroughness and genuine effort.

Demonstrating these efforts will also reassure your investors, confirming that their investment is being utilized effectively.

Maximizing Lead Generation: Utilizing ROAS for Tripling Results

While academic plagiarism is unacceptable, adopting successful strategies is a standard practice within the business world.

Xiaoyun TU, serving as the global director of demand generation at Brightpearl, has authored a detailed guide.

This guide focuses on effectively utilizing return on advertising spend (ROAS) to achieve a threefold increase in a company’s lead generation efforts.

According to TU, a satisfactory ROAS score is unique to each organization and its specific campaigns.

Understanding and Improving Your ROAS

If current ROAS figures are not meeting expectations, data analysis can be instrumental.

Leveraging ROAS data allows for the development of highly targeted campaigns and the creation of personalized customer experiences.

This data-driven approach is crucial for optimizing advertising spend and maximizing lead acquisition.

Key Strategies for ROAS Optimization

• Targeted Campaigns: Focus advertising efforts on specific demographics and interests.
• Personalized Experiences: Tailor messaging and offers to individual customer preferences.
• Data Analysis: Continuously monitor and analyze ROAS data to identify areas for improvement.

By implementing these strategies, businesses can significantly enhance their ROAS and drive substantial growth in lead generation.

Ultimately, a strategic approach to ROAS is essential for achieving marketing success and maximizing return on investment.

Facilitating the Adoption of New HR Technology for Hiring Managers

A reliance on intuition often overshadows the benefits of automated tools in decision-making, especially within the realm of recruitment. However, this approach isn't strategically sound.

Startups employing unstructured hiring procedures frequently struggle with inadequate candidate tracking. Consistency in candidate experience is often lacking, and unconscious biases can significantly influence hiring outcomes.

While a degree of skepticism towards automated hiring solutions is understandable, complete disregard for their potential is detrimental.

Overcoming Resistance to HR Tech

Successfully integrating new HR tech requires a thoughtful approach to address potential resistance from hiring managers. Here are three strategies to consider:

• Focus on Augmentation, Not Replacement: Frame the technology as a tool to enhance, rather than replace, the hiring manager’s expertise.
• Provide Comprehensive Training: Ensure hiring managers receive thorough training on how to effectively utilize the new system.
• Demonstrate Clear Benefits: Highlight how the technology streamlines processes, reduces bias, and ultimately leads to better hiring decisions.

The Pitfalls of Ad Hoc Hiring

An unstructured hiring process can lead to several challenges. Proper candidate tracking is often absent, resulting in lost opportunities and inefficiencies.

Without standardized procedures, inconsistencies in how candidates are evaluated and treated are common. This can negatively impact the candidate experience and potentially lead to legal issues.

Perhaps most importantly, a lack of structure allows for bias to exert undue influence on hiring decisions, hindering diversity and potentially leading to less qualified hires.

Embracing Data-Driven Recruitment

Adopting HR technology isn't about abandoning human judgment; it's about supplementing it with data. Automated tools can provide valuable insights into candidate pools, identify potential biases, and streamline administrative tasks.

By embracing a data-driven approach, organizations can improve the quality of their hires, reduce time-to-fill, and create a more equitable and efficient recruitment process.

Potential Factors That Could Halt Startup Growth

Anna Heim and Alex Wilhelm, in a recent installment of The Exchange, considered the circumstances that might lead to a slowdown in the currently thriving startup ecosystem.

This market is presently being propelled forward by factors such as historically low interest rates and the widespread adoption of digital technologies.

They noted that the foundations supporting the current surge in startup fundraising seem robust and are not expected to diminish rapidly.

However, even periods of significant growth are finite, and the current positive momentum will inevitably experience a decline at some point.

Underlying Conditions and Potential Shifts

The analysis suggests that while the current conditions are favorable, several elements could contribute to a cooling of the startup market.

These potential shifts warrant careful observation as they could impact future investment trends and the overall health of the startup landscape.

It’s important to recognize that sustained periods of exceptional growth are uncommon, and adjustments are a natural part of the economic cycle.

• Low interest rates have played a key role in facilitating investment.
• The acceleration of digital transformation has created numerous opportunities for new ventures.

A change in either of these factors could significantly alter the current trajectory.

Intuit’s $12 Billion Mailchimp Acquisition: A Deep Dive into Small Business Strategy

This week saw a significant development in the fintech world: Intuit announced the acquisition of Mailchimp for $12 billion. Prior to this, Intuit’s largest acquisition was the $7.1 billion purchase of Credit Karma last year.

Mailchimp has been actively broadening its capabilities beyond its original email marketing focus. Recent additions include website building tools and Customer Relationship Management (CRM) solutions, as noted by enterprise reporter Ron Miller.

Industry analysts suggest this acquisition demonstrates Intuit’s commitment to growing its base of small and medium-sized business (SMB) clients. The company aims to provide a more comprehensive suite of tools to this market.

Expert Perspectives on the Deal

Several industry experts weighed in on the implications of this strategic move.

• Laurie McCabe, co-founder and partner at SMB Group, offered insights into the evolving needs of SMBs.
• Brent Leary, founder and principal analyst at CRM Essentials, analyzed the synergy between Intuit and Mailchimp’s offerings.
• Holger Mueller, an analyst at Constellation Research, provided a broader perspective on the competitive landscape.

These analysts collectively believe the acquisition will allow Intuit to better cater to the diverse requirements of its SMB customer base.

The expansion of Mailchimp’s services, coupled with Intuit’s financial strength, positions the combined entity to become a dominant player in the SMB software market.

Forge’s SPAC Transaction: A Wager on the Difficulty of Unicorn Liquidity

According to Alex Wilhelm in The Exchange, a persistent challenge within the late-stage startup ecosystem is its superior capacity for value creation compared to its ability to facilitate exits for that generated value.

In simpler terms, the startup landscape excels at producing unicorn companies, yet struggles with successfully bringing them to the public market.

This dynamic presents a favorable outlook for Forge Global, a technology company specializing in secondary market transactions for private company shares.

Alex Wilhelm characterizes Forge Global’s intention to become a publicly listed entity through a Special Purpose Acquisition Company (SPAC) merger as fundamentally sound and logical.

The Core Issue: Exit Challenges

The difficulty in finding suitable exit strategies for high-growth, privately held companies is a significant factor driving demand for secondary markets.

Traditional IPOs aren’t always feasible or desirable for every unicorn, creating a need for alternative liquidity options.

Forge Global’s Position

Forge Global addresses this need by providing a platform where investors can buy and sell shares in private companies.

This allows early investors and employees to realize gains before a potential IPO, and provides new investors access to promising private ventures.

• The company facilitates transactions in shares of pre-IPO companies.
• It offers a marketplace for secondary liquidity.
• Forge Global caters to both buyers and sellers of private company stock.

The SPAC deal, therefore, positions Forge Global to capitalize on the increasing demand for liquidity in the private market.

Why This Matters

The success of Forge Global’s SPAC transaction could indicate a broader trend towards alternative exit strategies for startups.

It suggests that the market recognizes the value of providing liquidity for private company shares, even in the absence of a traditional IPO.

Navigating Citizenship with a Criminal Record: A Question for Sophie

Dear Sophie,

A past arrest and subsequent misdemeanor charge can understandably raise concerns for green card holders considering applying for U.S. citizenship. The question of eligibility, and how to properly address a criminal history, is a common one.

Understanding the Impact of a Criminal Record on Naturalization

Having a criminal record doesn’t automatically disqualify someone from becoming a U.S. citizen. However, it necessitates careful consideration and potentially, legal guidance. The specifics of the offense, and the time elapsed since its occurrence, are crucial factors.

Your situation involves a misdemeanor conviction for marijuana use and driving under the influence (DUI). These offenses are evaluated differently by U.S. Citizenship and Immigration Services (USCIS).

Marijuana-Related Offenses and Citizenship

Historically, even minor marijuana offenses could pose a significant hurdle to naturalization. However, the legal landscape is evolving.

Federal law still considers marijuana illegal, but many states have legalized or decriminalized its use. USCIS is increasingly taking state law into account when assessing these cases.

DUI Convictions and Naturalization

A DUI conviction is generally considered a more serious matter than a simple marijuana possession charge.

USCIS will examine whether the DUI constitutes a crime involving moral turpitude (CIMT). If deemed a CIMT, it could lead to denial of citizenship. The determination often depends on the specific state's laws and sentencing guidelines.

How to Handle Your Criminal Record During the Citizenship Application

Transparency is paramount. You must disclose your criminal record on Form N-400, the Application for Naturalization.

Here’s a recommended approach:

• Gather Documentation: Collect all court records related to your arrest and conviction, including the charging documents, plea agreements, and sentencing orders.
• Explain the Circumstances: Provide a detailed, truthful explanation of the events leading to your arrest and conviction. Expressing remorse, as you have done, can be beneficial.
• Demonstrate Rehabilitation: Highlight any steps you’ve taken to rehabilitate yourself, such as completing alcohol or drug treatment programs, or maintaining a clean record since the conviction.
• Seek Legal Counsel: Given the complexities of immigration law, consulting with an experienced immigration attorney is highly advisable. An attorney can assess your specific case, advise you on the best course of action, and represent you before USCIS if necessary.

Failing to disclose a criminal record, or providing false information, can result in the denial of your application and potentially lead to deportation proceedings.

While your past conviction presents a challenge, it doesn’t necessarily preclude you from becoming a U.S. citizen. A thorough preparation, honest disclosure, and potentially legal assistance will significantly increase your chances of success.

— Sophie

Atlanta Startups Benefit from Global Venture Capital Surge

Alex Wilhelm and Anna Heim have expanded their analysis of U.S. startup hubs, following visits to Chicago and Boston.

Their latest investigation focused on Atlanta’s rapidly growing startup ecosystem, which is currently experiencing unprecedented levels of venture capital investment.

The analysis reveals a city benefiting from increased venture activity. This growth is being supported by unique local factors.

These factors may have enabled earlier-stage companies within Atlanta to achieve scalability at a lower cost compared to other major markets.

Record Capital Inflows into Atlanta

Atlanta’s startup scene is witnessing a significant influx of capital. This trend is part of a broader, global surge in venture capital funding.

The city’s specific advantages are contributing to this positive momentum. These advantages are helping startups thrive and expand.

• Lower operating costs can extend runway.
• A growing talent pool is attracting investment.
• Local support networks are fostering innovation.

Wilhelm and Heim’s report highlights the interplay between global trends and local conditions. This combination is driving Atlanta’s startup success.

Key Findings from the Report

The report emphasizes that Atlanta is not simply riding the wave of increased VC funding. It is actively leveraging its strengths.

The city’s ability to provide a more affordable environment for early-stage companies is a key differentiator. This allows startups to focus on growth and development.

Scalability is being achieved more efficiently in Atlanta. This is a significant advantage in a competitive landscape.