Non-Tech Firms Changing Startup Business Models

  1. Over the last year or so, growth rounds (B and beyond) have required tougher metrics for funding and good valuation meaning that companies need to have some optionality in the event they cannot raise capital at the valuation they want or because of internal growth metrics. This squeeze will put the focus on sustainable business models.
  2. Traditional companies like businesses with economics that make sense when synergies and adjusted revenue are applied. Hunter’s post had amazing insights on the different levels of acquisition but my particular favorites were levels 3 and 4. Non-tech companies are looking to prevent themselves from the same fate as their peers in retail since Amazon arrived on the scene, which gives reasoning behind level 4. But I would argue that most of the M&A activity will occur in level 3 where startups with decent unit economics have the chance to provide a real product line or new acquisition channel to a non-tech company where the economics get better with synergy from a bigger firm.

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Partner @ Energize | former product @ Choose Energy | writing on climate change and the energy transition at kevindstevens.com

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Kevin Stevens

Kevin Stevens

Partner @ Energize | former product @ Choose Energy | writing on climate change and the energy transition at kevindstevens.com

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