Purpose Packs, Briding Works & Flawed Models 🍸

Gift boxes cost from $25 to $250 each. The gifts range from snacks from Washington, D.C.-based granola brand Together We Bake, which provides workforce training to domestic violence survivors, to wood-bound journals from Minneapolis-based Woodchuck USA, which plants a tree for each product sold. One popular box, for example, is a $100 bar-gift set, which includes hand-blown-glass drink stirrers and sparkling grapefruit tea. It supports family- and Black-owned businesses, youth recovering from gun-violence trauma, sustainable production, and other causes.

Each box comes with an impact booklet, telling the stories behind the products and the businesses that make them, as well as the good they do.

According to the Packed With Purpose 2021 Impact Report;

• 177 individuals with development disabilities received employment in 2021.
• The company impacted over 750,000 lives through 140 impact centres across 16 countries.
• 58,000 women were employed and empowered worldwide.

Rothschild is not alone in this business. There are several startups thriving in the nascent responsible gifting industry. 

There’s the Seattle artisan-made home good brand Give a Damn Goods, and Louisville eco-friendly online marketplace EarthHero. They all draw their gifts from brands that focus on sustainability and the environment, workforce development, women's empowerment, youth development, health and well-being, or are diverse or women-owned.

If you’re single, shorter than the typical bride, and enjoy frequent travel, there’s a growth industry looking to hire.

A couple of years ago, 22-year old Xie Yuke read an ad for professional bridesmaids in the papers and decided to give it a try. Today, Yuke has turned this into a thriving business, flying more than 140,000 kilometers across China working as a professional bridesmaid. She has attended over 40 weddings in the last two years alone. 

“Professional bridesmaids” is a fast-growing industry in China and is expected to grow by 25% to 30% YoY, according to Cao Zhonghua, an expert at the Chinese Traditional Culture Promotion Council. 

Several professional bridesmaid and groomsman agencies have emerged across the country as a result of the growing demand, especially during the pandemic when couples who couldn’t get friends to attend their weddings due to travel restrictions started looking for professionals in the vicinity.

Specifics of the jobs:

• The couple generally cover the travel and accommodation costs
• They expect the hiree to perform usual bridesmaid task such as helping the bride with her attire and make-up, providing entertainment and handling guests and toasts.
• The typical daily rate is between 500 and 2,000 yuan ($74-$296).

The founder of a rental bridesmaid and groomsman service company based in Hangzhou said that the number of registered members on its platform grew from a few thousand in February to around 50,000 at present. On average, the platform has received 10-20 orders per day during the past month.

For founders, employees and VCs alike, 2021 must’ve seemed like a miracle year when valuations were rising and funding was flowing freely. 

But startup valuations were inflated in 2021. They were unrealistic.

And so in 2022, when share prices and market caps started decline due to rising interest rates and geopolitical developments, the once-inflated valuations became a big problem.

The calculation for a startup’s valuation is fairly straightforward:

New valuation = (share price at latest round) x (total number of company shares)

While widely accepted, this model is flawed. Because in a company, the value of all shares are not the same.

Example: SpaceX

After the company closed a Series D round in 2008, its valuation was 36% higher than the previous round despite the economic downturn. 

This is because SpaceX’s Series D shares were issued with certain protections. In the event of liquidation, Series D investors were guaranteed a 2x return on their investment before any other shareholder received remuneration.

Thanks to this protection, investors were already willing to pay a higher price. Plus when the above valuation model was applied to SpaceX, all the shares (from Series A, B, C, D) were treated as if they were worth the same, and so the company was doubly overvalued.

Today if SpaceX was sold at a lower price than its valuation, the same protected shareholders would find their shares to be worth much less than the 2008 valuation.

The harsh reality of 2022

Today, startups with below-valuation exits and down rounds will be an unfortunate reality for many founders and investors who benefited from the inflated valuations last year. For them, 2021 will cease to look like a miracle year and will instead appear as a curse.