Active founders make good investors, but do they make good VCs?

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In professional sports, player-coaches can be extraordinarily effective: Celtics center Bill Russell won two NBA championships between 1966 and 1969.

A recent study suggests that this principle also applies to venture capital. “Recent data from AngelList, pulled for Flex Capital, shows that the founder-led funds raised through its platform outperformed the other funds raised on AngelList,” reports Rebecca Szkutak.

“The reality is, we all have some other thing going on in our lives that we are passionate about,” said Jeff Lu, general partner at Flex Capital. “Dual-threat CEOs, their hobby is to invest. At the same time, the experience makes them better CEOs and investors.”

However, “it’s important to note that women founders are largely left out of this trend,” writes Rebecca.

“While having these side gigs is largely seen as a positive by VCs for male founders, multiple women founders have told TechCrunch+ that they aren’t given the same luxury. In fact, they are advised against it.”

Thanks very much for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

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How to avoid AI commoditization: 3 tactics for running successful pilot programs

Companies in search of AI-powered business solutions have a lot more options to choose from than they did a few months ago. But where does that leave startups that are trying to differentiate their offerings?

“The real moat is a combination of AI models trained on proprietary data, as well as a deep understanding of how an expert goes about their daily tasks to solve nuanced workflow problems,” says Chaitanya Vaidya, co-founder of Deeprisk.ai.

In this TC+ article, he shares three methods AI startups can use to manage iterative pilot programs that create customer delight by studying user behavior.

“Leveraging deep relationships with customers in your domain is a simple, yet effective tactic,” writes Vaidya.

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Europe could be on the cusp of a golden era in robotics. Here’s why.

Even though the pandemic accelerated our shift to automation, funding to robotics startups decreased globally.

Last year, investors dropped almost $8.5 billion on the sector — a 42% decline from 2021 levels, with the deepest cuts coming from China and the U.S., where USD investment volume was slashed “by over 50%,” according to a report from Picus Capital.

Across Europe, however, funding only fell by “5% in the same period.” In a study shared with TC+, the firm analyzed “a few key trends driving the continent’s recent power play in the robotics market,” including increased demand and a strong education pipeline.

“Although it’s still early, we’re convinced it’s just the beginning of how Europe is finally beginning to find its place within the modern robotics ecosystem.”

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Onboarding and automation: What fintechs can learn from big banks

Onboarding a new fintech user comes with a unique set of challenges: you’ll need to capture and verify their personal information while you teach them how to use your service and induce them to stay engaged.

Getting new customers up to speed is essential, “but in an economic downturn, it becomes doubly so,” says Appian CTO Michael Beckley.

“Investors rapidly lose patience for startups that can’t deliver growth and margin at the same time as regulators crack down on risk across the financial sector.”

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Funding for women in climate tech is pitiful. What can be done about it?

It’s well understood that the scales are heavily tipped to favor men when it comes to startup funding, and climate tech is no exception.

According to Crunchbase, the amount of venture capital directed to women founders declined from 8.9% in 2022 to 6.9% in Q1 2023.

“We shouldn’t have to separate women versus men when trying to provide a platform for a massive issue like climate innovation,” said founder Kruppa Raghuraman.

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11 investors predict a colorful, if difficult, future for psychedelic startups

SaaS startups generally benefit from a loose regulatory environment, but for companies working to bring psychedelics into the mainstream, the struggle is real.

Although consumer attitudes are shifting, they must still navigate a complicated path under the watchful eye of health agencies and law enforcement.

Decriminalization is opening doors for startups working with cannabis, psilocybin, ketamine and other substances, but how are investors approaching this space?

Anna Heim surveyed several of them to learn more about what they’re looking for, their long-term approach to the sector and how they prefer to be pitched:

• Sa’ad Shah, managing partner, Noetic Fund
• Ryan Zurrer, founder and director; Ozan Polat, partner; and Daniel Tarockoff, partner; Vine Ventures
• Tim Schlidt, co-founder and partner, Palo Santo
• Amy Kruse, chief investment officer, Satori Neuro
• Clara Burtenshaw, partner, Neo Kuma Ventures
• Greg Kubin and Matias Serebrinsky, general partners, PsyMed Ventures
• Bek Muslimov and Nikolay Tretiyakov, co-founding partners, Leafy Tunnel

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