Why no one covered your early-stage round

I don’t have an editor for this personal blog, so feel free to send typos to equitypod@techcrunch.com. Thanks! — Alex

Yesterday I tweeted a joke post on TechCrunch about why the publication I write for might not cover your seed round. Based on the somewhat outsized response to the screenshot, I wanted to expand on the concept a bit more. But what I blogged up didn’t survive an encounter with my ur-editor, so I’m posting bits of it here, albeit updated as I am now writing for myself instead of under my employer’s aegis.

Early-stage companies are cool. I dig them. The ability to cover them is part of the reason I came back to TechCrunch after a few years of aping the prodigal son. The publication has long had a bias in favor of writing about the most nascent tech startups. Its continued focus on covering tiny upstart companies is something that sets TechCrunch apart from other publications, I think.

TechCrunch covers lots of early-stage rounds. In the original TechCrunch version of this post I noted that we — examples here, here, and here — often cover demo days, not to mention a good number of individual micro-rounds. But at issue is not that the point that TechCrunch and other pubs don’t cover any small private investments, but that we aren’t covering yours. Or your client’s.

There is an imbalance in the number of early-stage rounds and the number of folks covering them. The imbalance between the number of PR folks and journalists is well-known. Here’s some data saying that it’s 6:1 in favor of PR these days. But I would hazard that the ratio of seed rounds that are put together and would like to be written up versus the number of folks actively writing that sort of post is even more off-kilter.

This means that my inbox is chock-full of notes from interesting founders and investors sharing upcoming early-stage rounds. But I can only get to a few each week, so I mostly have to say no.

But some rounds do get covered, right? Yep, and that’s due in part to the fact that covering startup rounds gets easier the more mature they become. This is because every news item has a weight to it, and the heavier it is the greater the chance that it will be covered.

The size of a round can boost its weight. Having a well-known founder can do the same. Or having an investor aboard with a super-strong track record. You can see how the average seed round can struggle to make an impact from this perspective.

The average weight of startup news has risen over time, as the type of deals that count as startup rounds have themselves stretched over time. Or more simply the startup market has fundamentally changed; the output of the press that covers startups has also changed.

Startups are staying private longer, and raising more money before going public. That means that the number of startups raising big rounds has gone up. And as I do not think that there is more coverage of funding rounds today than in years past, and the big rounds will get covered because they are the most newsy — they carry the most weight — there is less time and attention left for smaller startups and rounds.

If every unicorn went public there would be fewer $100 million rounds, and folks like myself could focus a bit more on seed and other early-stage investments!

As a final caveat to all of this, thinking that super-early startups are worth covering doesn’t mean that all coverage will be positive. And skepticism scales as a startups does. TechCrunch has a bias towards covering startups of all shapes and sizes. That does not mean that we are going to always write nice things.

Indeed, our coverage tends to get a bit starker as company scales. This is because the company in question is growing up (and thus more is expected of it) and because its in-market impact is growing. If a startup has three customers customer and it loses one, that’s not news. That’s a startup looking for product-market fit. But if a startup has 1,000 customers and loses 500, that’s news.

And if a startup has two employees, it’s hard to get nitty-gritty on DEI data. But once it has 15 people, we ask about that. And when a private company reaches 1,000 employees, we’ll ask about progress across its diversity metrics.

In my personal view, the most intelligent startup coverage is the least skeptical when startups are super small, and most skeptical when they are going public. And the skepticism should scale as they do.

Why avoid being caustic towards the tiniest companies? It would be easy to dump on an idea like a podcast search engine, or a small games company that is struggling. But sometimes those wind up giving us companies like Twitter and Slack. And no one knew what was coming from their possibly dismissable concepts.

But by the time a company is raising a Series D and its revenue growth has stalled and its burning cash like it just raised a 2018 Vision Fund round, you bet we’ll point its failures out.

There are myriad exceptions to this general rule. Harassment, abuse, and the like are news regardless of company size. Investor misbehavior is news regardless of what stage they invest it. You get the idea.

Summarizing: There aren’t that many people covering startup rounds; many startup rounds are now huge, and thus consume much coverage oxygen; there are lots and lots of early-stage rounds; most don’t get covered and I don’t really see that changing. But that doesn’t mean that your round isn’t super cool. — Hugs, Alex