In a recent episode of TechCrunch’s Equity podcast, Ashraf Hebela, J.P. Morgan’s Head of Startup Banking, shared valuable insights on the current state of early-stage investments and what it takes to build a unicorn in today’s market.
Key Takeaways:
- Unicorn Creation Slowdown: Since the peak of 2021, unicorn births have declined by 88%, compared to a 21% decline in first financings.
- Healthy Investment Climate: Despite the slowdown, 2024 is trending towards a $180 billion year with 15,000-16,000 deals, rivaling historical top years in the innovation economy.
- Sector-Specific Opportunities: AI-focused startups are finding it easier to raise capital, with some securing $300-400 million Series C rounds. Other growing sectors include fintech, robotics, and clean tech.
- Founder Traits Matter: While coming from a top-tier university can be beneficial, Hebela emphasizes that technical expertise, passion, resilience, and networking abilities are equally important.
- Rethinking ‘Founder Mode’: Hebela cautions against a monolithic set of founder attributes, suggesting a focus on values like resilience and innovation rather than specific cultural traits that may be exclusionary.
The Bigger Picture
Hebela’s insights come from his unique perspective as both a former founder and a finance veteran with over a decade at Silicon Valley Bank. He emphasizes that while the current market may seem challenging, it’s still robust compared to historical standards.
The report highlights the importance of adaptability in the current investment landscape. While AI-focused startups are currently in the spotlight, Hebela notes that opportunities exist across various sectors for founders who can demonstrate resilience, passion, and problem-solving skills.
For aspiring unicorn builders, the key takeaway is clear: success isn’t just about adopting a particular “founder mode” or coming from a specific background. Instead, it’s about combining innovative ideas with resilience, networking skills, and the ability to solve real problems.
