Hi everyone, Turner back with this Thursday's Split! Today I sat down (figuratively) for a quick Q&A with my friend Semil Shah at Haystack. He was an early investor in companies like DoorDash, Instacart, Figma, Opendoor, and HashiCorp. He's seen founders go from idea to IPO, and I always appreciate his insights into the early stage funding market. He had a great tweet I had him unpack below.

Q&A With Semil Shah

Semil: My belief is: Founders who are raising “modest” amounts of capital for their technology startup should not be impacted by today’s financial climate. Specifically, a solo founder raising $400,000, or two co-founders raising $1M – both considered “pre-seeds” – shouldn’t have trouble securing this capital, assuming they have one or more of the following attributes: Compelling background; a big vision that generates excitement; a live product that others are using.

Similarly, founders raising a more “typical seed” of, say $2-4M, similarly shouldn’t encounter problems in raising so long as they possess compelling experience and/or a product that folks are already using.

The meta point here is that today’s market pullback and valuation correction doesn’t really impact these initial, small financings. There is plenty of money held by VCs who want to invest. If a round can’t come together, it’s not the macro environment to blame – something is likely inherently wrong in the pitch.

S: It could be a variety of things. Most common is that the idea and plan is not articulated in a compelling enough way. Investors don’t want good enough – they want to get excited about a market opportunity. That also includes pricing and their ownership. Founders today are very dilution-sensitive. This is a good thing, but many times, founders can turn off investors by not rewarding them for the risk they are taking with the capital.

There are so many variables here, I’ve found the easiest way to sum this up is courtesy of comedian Steve Martin: “Be so good they can’t ignore you.” Investors meet lots of startups every week, every month.

The goal is to stand out among the 20+ pitches they get every month. What makes something stand out? Unique backgrounds, unique insights, clear communication, and evidence of being able to ship.

S: If founders are raising a small pre-seed or modest seed round, there is no extra advice needed. Just follow Steve Martin’s advice. The market for early-stage investment is more efficient than most folks want to believe, and there is plenty of money ready to invest early. Plenty.

Any founders raising a pre-seed, or even thinking about possibly starting a company one day, make sure to follow Semil on Twitter to get more of his thoughts on fundraising and more.

How BNPL Really Works: A comprehensive post breaking down the the different types of BNPL and how its created a new type of lending product.

Global container rates hit 15-month low: Still 4x higher than pre-pandemic levels, but down 46% from the peak in 2021. h/t Charlie Biello

7-Eleven acquires Skipcart, a network of on-demand delivery drivers. I'm not sure exactly what Skipcart's US coverage looks like, but 7-Eleven has over 14,000 US locations. This includes 4,000 Speedway's acquired in 2021. Its partnered with DoorDash for delivery since 2015, and this acquisition may hint 7-Eleven wants to bring delivery capabilities in-house. This would help catch-up with competitors Gopuff (acquired Bevmo) and Circle K, which has ramped up its startup investing over the past few years. More from The Information here.

Someone re-made a Kmart in VR: From the website lifted from the late 90's to the corporate Twitter account still using hashtags, its exactly what you'd expect from Kmart in 2022.

Student makes $110 million on Bed Bath & Beyond trade: In case you missed this story that's been all over the internet, USC student Jake Freeman 4x'd a $25 million July investment raised from family and friends. In an interview, he said "I thought this was going to be a six month play". Legend.

From Tuesdays poll, How much subscription revenue will Snapchat have in 5 years?

38% of respondents think Snapchat could do $10 billion in subscription revenue in five years. I'll be honest, I'm still not 100% sure I buy into my own crazy idea.

$1 and $5 billion tied for the second most responses, taking 25% each. I think this is more reasonable, especially if the subscription continues to be a lower priority to Snap's advertising business.

If you have no idea what any of this means, check Tuesdays issue here where I broke down how Snapchat's new subscription service could quickly hit billions of dollars in revenue.

Career Services

Some open roles across the Banana portfolio:

• Flexbase is hiring a Senior Data Engineer (Remote)

• Snackpass is hiring Senior and Junior Full Stack Engineers (SF, LA, NYC or remote)

• Secureframe is hiring a Customer Success Manager (Remote)

I've been traveling this week, so still onboarding more, but browse the full list of openings across Engineering, Design, Sales/Marketing, Product, Data, and Biz Ops here.

Monkey Business