What's Everyone Talking About in StartupLand? Seed-strapping!
In November we introduced the concept that was all the rage in the Triangle, now it's suddenly worked it's way to Silicon Valley! (Dang copy cats)
Triangle Trend Setters
In Silicon Valley for the last 10-20 years it’s been all about Blitzscaling! Raise $100m pre-seed and then raise $1b! Land grab! TechCrunch and the usual suspects eat it up and then they forget to cover the ugly downside, what I call (wait for it):
BlitzFailing
Back in one of our first issues of the Triangle Tweener Times we talked about a new trend with AI startups in the Triangle, it was early, but they were seeing so much efficiency from being AI Native that they didn’t want or need to raise past a Seed round, because their models were projecting faster than normal revenue growth , more revenue per employee which meant that expenses didnt’ grow nearly as fast as revenue, so they would get profitable pretty quickly. Our own Tweener CEO, James Avery at Kevel coined this: Seed-strapping - the marriage of a seed round and bootstrappin’ mindset.
Well guess what, the rest of the world is catching on! Before we dig into that, a word from our sponsors that help us seedstrap here at the Tweener Times:
Robinson Bradshaw - A full-service business law firm with a passion for supporting the Triangle entrepreneurial ecosystem. Learn more about Robinson Bradshaw’s startups and venture capital practice here.
Bank of America – BofA’s Transformative Technology Group helps game-changing tech businesses and founders realize their boldest ambitions across a wide range of technology sectors. With hands-on support, world-class resources, and an extensive network – BofA provides the stability and scalability that tech companies need to rapidly grow today and into the future.
EisnerAmper (formerly HPG) - One of the world’s largest business consulting firms, with a dedicated technology practice offering outsourcing, accounting, tax, and advisory services. Our experienced professionals serve more than 2,000 technology companies, from early-stage startups to public enterprises. Discover how EisnerAmper’s stage-specific solutions and industry expertise can help you achieve your milestones whether startup, international expansion, M&A, or IPO: eisneramper.com/tech.
Smashing Boxes - A Durham based lean design-centric digital transformation company.
ExtensisHR - As a Professional Employer Organization (PEO), ExtensisHR empowers tech founders and growing businesses to scale smarter. We take HR administration off your plate—managing payroll, recruiting, employee benefits and retirement plans, compliance, risk, and more—so you can focus on innovation. For over 25 years we’ve leveraged a people-first approach, customer-centric mindset, and deep industry expertise to ensure employers have the tools needed to stay competitive in today’s market.
Whitley Recruiting Partners - Whitley Recruiting Partners specializes in recruiting top tech talent for growth-stage startups in the Triangle. We target industry-specific, entrepreneurial employees who drive immediate results through a fast, accurate, and scalable recruiting process. Special offer for Tweener Times subscribers: Free survey of available local talent for one of your openings.
Aligned Technology Group - Unlock the power of the cloud with Aligned Technology Group's free Catalyst Program! As an AWS Advanced Tier Consulting Partner, we specialize in cost optimization, security assessments, and tailored cloud strategies for startups and SMBs. Let us help you maximize your cloud investment and navigate your AWS journey with ease.
…well it was an interesting end to the week last week because of these events:
2/23: CNBC Reports on Seed-Strapping!
First, while Fetch is never going to be ‘a thing’ (Apologies: I have a 18yr old daughter, I had to), Seed-strapping is totally catching on! 👀
Of course they attribute it a. all to silicon valley <sigh> and b. say it’s because of the difficult funding environment. Finally towards the end of the article, they do say that it’s not only in Silicon Valley and instead finally give the Triangle it’s due by….talking about Southeast Asian startups <smh>. Nothing against Southeast Asian startups, but come on people, this is OUR THING. 👋.
But big-picture, it was interesting to see this story and OUR word go national.
Stripe Data Causes 🤯
Then David Sacks (Craft Ventures, All-in pod, Crypto/AI Czar) posts this on X:
Turns out ever year Stripe and some other payment companies publish some interesting data they are seeing and this one is from Stripe.
What you’re seeing here is the number of months from start to $5m ARR:
Traditional SaaS companies: 37 months
Top AI companies: 24 months
That’s 13 months faster. Getting to $5m ARR is not only hard as heck, getting there in 2yrs is quite impressive.
Chamath Drops a 8090 Bomb
THEN, when going over this on the about 23:13 mins in he drops this (I’m pretty sure it will start right there in this embedded view, transcript after if you don’t want to take the time):
They show the same chart as above that everyone was buzzing about and then Chamath drops: “Yeah at 8090 we got to $5m in 3 months. There’s some whales in there, but it speaks to the selling motion for an AI company. The ROI is so obvious and the savings relative to traditional SaaS and they are sick of the software industrial complex.
From there a series of discussions across X and Linkedin ensued about all of this - but regardless of where you come out on it - I think we can all agree, AI is causing very interesting and significant changes across the startup ecosystem and none of us knows how it’s going to end up.
Interested in learning more? Check out the Keebler Interview
If Seed-strapping is interesting to you, don’t miss our exclusive interview with Keebler Health’s CEO where we discussed Seed-strapping and their $6m raise.
Article is here.
Video is here: