Hey — It's Nico.

This newsletter contains:

• 5 resources for founders.
• 5 startup news.
• 1 failed startup.
• 1 hot startup.

This week's must-read: ​IRL, a Unicorn social media startup​, shuts down.

This issue is brought to you by Aircall:

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What to read this week?

💯 Sifted does an analysis of Mistral’s Investment Memo that raised $113M.

💰 Brett Adcock shares his playbook for raising money.

🎙Lex Friedman and Marc Andreessen talk about the future of the Internet, AI, and more.

👀 Shaan Puri interviews Sarah Moore on why she bought a $20M+ business called EggCartons.com.

🔍 Rex Woodbury on how to build your startup’s brand.

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What happened this week?

😮 IRL, a Unicorn social media startup to shut down after admitting 95% of its users were fake.

📈 Mistral AI raises $113M despite no product and little staff.

💸 Robinhood acquires credit card startup X1 for $95M.

📣 KoBold Metals, a mining startup, hits Unicorn status after raising $195M.

👎 One of Asia’s biggest startups, Grab, lays off over 1,100 employees.

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Failed startup story: Apprenda

Apprenda, a New York-based software startup that built a platform to aid companies in the development and integration of new software with existing internal systems, ceased operations in 2018.

The startup attracted substantial investment from highly regarded Venture Capital firms, raising a total of $56M since 2008. They also served an impressive portfolio of clients, including JPMorgan, Chase, and healthcare companies like AmerisourceBergen, demonstrating notable traction in the market.

In Between the Lines:

Among several factors contributing to this downfall, one that stands out was the company's inability to successfully market itself for an exit.

​Asked during a call Safeguard CEO and president Brian Sisko mentioned that “It is pretty unusual for a company to gain the level of traction that Apprenda did," but the company did "not successfully market itself for exit."

"There were some very significant players who were more than sniffing around the process that was being run around Apprenda," he continued. "I think Sinclair Schuller did a great job, but he didn't ultimately get the company to a sale point."

Lessons Learned:

The case of Apprenda serves as a reminder of the importance of having a clear, strategic exit plan. However, it’s noteworthy that selling the company may not be the desired path for all startups. Some may aim for long-term sustainability and growth, while others might look for an IPO or simply wish to carve a niche in the market without an explicit exit plan.

For those startups where the objective is to position the company for sale, they should clearly outline their exit goals early in their journey, focusing on creating tangible value that attracts potential buyers or investors. It’s equally as important to make the business attractive not only from an external market standpoint but also from an internal operational perspective.

Regardless of a startup's ultimate vision, discussions about a well-formulated exit strategy should form an integral part of the startup's planning process. Failure to do so can lead to missed opportunities and potential downfall, as seen in Apprenda's case.

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Hot startup of the week: Captions

​Captions, a New York-based video editing startup, recently raised $25M in Series B funding.

This financing round, led by Kleiner Perkins, along with contributions from other prestigious investors such as Sequoia Capital, Andreessen Horowitz, and SV Angel, brought the total funding amount for Captions to $40M.

The funds are intended to fuel the expansion of operations and widen the business reach of this AI-driven creative studio.

In Between the Lines:

The platform allows customers to produce studio-quality videos directly from their mobile phones, offering a range of features that streamline the creation process and amplify the output quality.

What sets Captions apart in the field of content creation tools is its distinct focus and innovation around “talking videos”, a content format that has been gaining traction in the creator economy space.

Instead of spreading itself thin across different content creation and video editing software, Captions has specialized in this singular domain.

Lessons Learned:

The journey of Captions serves as an example of having a focused vision and understanding your target market. By focusing on a specific domain - in this case, "talking videos" - Captions has been able to perfect its products and raise a substantial amount of funding and essentially carved out a niche for itself.

This has allowed for more streamlined and effective product development, as every feature - from AI dubbing to AI eye contact - is designed to enhance the specific format of talking videos. This focused approach has also enabled Captions to position itself as an expert in the realm of talking video content creation, strengthening its brand and reputation in the industry.

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What do you think of today's newsletter?

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• ​😒 Meh​
• ​👎 Not interesting​

Cheers,

Nico