- TechTO Newsletter
- January 23, 2024: Financial security at your fingertips
January 23, 2024: Financial security at your fingertips
Here's how newcomers to Canada (and everyone) can thrive financially, plus we weigh in on achieving venture scale in 2024 💰
Meet Woveo, the solution to accessing credit and allowing newcomers to Canada to thrive financially
What is Woveo
At Woveo, our corporate vision is firmly centered on delivering financial security to individuals within the non-prime demographic in Canada. We are unwavering in our dedication to augmenting accessibility to economical and brief credit alternatives, with a particular emphasis on catering to the needs of low- and moderate-income consumers.
What is your approach?
Through the strategic utilization of social collateral, we are revolutionizing credit practices within the non-prime consumer segment.
Central to our methodology is a reliance on community-based accountability mechanisms aimed at elevating overall creditworthiness. We invite you to join us on this transformative journey towards a future where widespread financial security becomes a tangible reality for all.
Why did you create Woveo?
The escalating expenses associated with credit for Canadians possessing credit scores below 660 are depleting capital from low-income communities, thereby exacerbating the wealth inequality gap. This realization prompted the establishment of Woveo—a dedicated community wallet aimed at fortifying your financial security.
Want the exclusive?
We had Jonah Chininga, CEO and Co-Founder at Woveo join us on stage at our recent TechTO to chat about the mission, inspiration, and goals for Woveo.
Each month, we are sharing a few frequently asked questions we often receive from Founders across the country.
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Todays Founder FAQ
What is venture scale?
Why are we asking this question?
When raising funds from venture capitalists you will have to convince them that your startup can achieve "venture scale".
The question arises because when seeking investment from venture capitalists, it's essential to demonstrate the potential for achieving "venture scale".
Several responses from various social networks indicated that venture scale involves reaching significant revenue milestones within a specific timeframe. However, this definition only scratches the surface and doesn't capture the full essence of what venture capitalists seek.
In reality, venture scale refers to a company's ability to provide substantial returns upon acquisition or going public, considering factors such as:
Current and anticipated revenue at the time of exit
Historical and projected growth rates
Potential gross margin and EBITDA margin
The market's valuation multiples for companies with a similar profile
While a common benchmark is achieving $100 million in annual recurring revenue (ARR) within 7 to 10 years, this no longer universally applies. Venture scale depends on market dynamics, gross margins, and exit valuation multiples specific to your industry.
Examples highlight that reaching $100 million in annual revenue may not equate to venture scale:
Direct-to-consumer (DTC) companies often face challenges due to lower gross margins and limited repeat purchases, resulting in lower valuation multiples. Some DTC companies trade between 0.5 to 2.0 times sales, requiring them to reach $500 million in annual revenue to be considered venture scale.
Market size is another critical factor. A niche SaaS tool achieving $100 million in revenue but needing to capture a substantial portion of a small market may raise concerns about future growth and valuation multiples.
In essence, demonstrating venture scale requires a comprehensive understanding of your industry's dynamics and the ability to align your startup's growth potential with market realities.
Some Expert Insights:
"A venture scale business can capture a significant share of a large market and scale its operations to meet that demand." - Reid Hoffman, co-founder of LinkedIn
"Venture scale is about identifying opportunities that are not just profitable but have the potential to transform industries." - Mary Meeker, venture capitalist and former partner at Kleiner Perkins
"In the venture world, scale means achieving exponential growth, often through technology-driven disruption." - Chamath Palihapitiya, founder and CEO of Social Capital
"Venture scale is about pursuing opportunities that are not limited by the size of the market but by the ability to execute and capture value." - Aileen Lee, founder of Cowboy Ventures and originator of the term "unicorn" for billion-dollar startups
We want to hear from you! Reply to this email and let us know your future Founder FAQs and what you’d like us to seek out and answer next month
Check out MaRS Impact AI on Feb 22.
Delve into transformative Canadian-made AI solutions with Cohere, Radical Ventures, Georgian, and more! Tickets are on sale now.
Learn more and register here
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