A Former Founder, Startup Community Connector and Educator
Fidelity Investments is one of Boston’s largest financial institutions, so it’s only natural that the company is playing an increasingly important role in the area’s startup scene. With the company’s focus on the startup and private market community, entrepreneurs have a new resource as they navigate what remains a challenging fundraising environment.
Startup Boston caught up with Fidelity Vice President Kristen Craft, who is deeply ingrained in the region’s startup ecosystem and focused on building out Fidelity’s private market offerings called Fidelity Private Shares. In this wide-ranging interview, Kristen discusses her advice for founders, her perspective on the funding climate, and the industries she finds particularly exciting.
SB: Will you share a bit about your background and how you came into the startup world?
KC: Sure. After college, I launched a startup company focused on tech enabled moving and storage. During that time, experienced not only the journey of getting started and growing, but also the challenges of building a network, hiring and scaling.
SB: Can you talk to me about your role at Fidelity, and how Fidelity is engaging the startup community?
KC: Fidelity has had a Stock Plan Services business for quite some time now, and Fidelity’s expansion into supporting early-stage companies was really born out of the need we saw to help founders with an array of financial services Our flagship product is a cap table and equity management platform, complemented by a secure data room to help founders manage their ownership in the company.
On top of that, we are working hard to prioritize relationships. It's a very tough fundraising climate, and many founders are seeking guidance. I spend a lot of time working with founders to develop their fundraising strategy and review investor pitch decks, using the insights I’ve gained from my time in this space.
I'm a big believer in the power of community. Boston is a particularly tight-knit, open and generous community, so if we lean in to create opportunity for serendipity to happen, founders could end up increasing their odds of success.
Founders more than ever need trusted partners, advisors, and folks who've seen it and done it before – with strong networks in the investor world, the legal world, and the financial world. Fidelity can be a great partner in the startup community because not only do we have so much expertise in finance, but we have so many relationships and so many different parts of the innovation economy that we can bring to bear in support of a founder’s success.
SB: You mentioned the tough funding environment. Since we are well into 2024, are you seeing things loosen up, or is it more of the same?
KC: Early signals in 2024 are leading to optimism. Truly excellent companies with strong metrics have continued to get funding. By strong metrics I mean companies that are generating revenue, and companies that can demonstrate that their sales motion is repeatable and scalable. They can foster customer retention to build out that customer lifetime value. Those sort of business fundamentals have always been important, but they're even more important now.
And back to your question: Companies that have been getting funded are the ones that have been laser focused on those business fundamentals and generating the revenue and metrics that will give investors a feeling of conviction. It’s early in 2024, but it does seem as though signs are pointing to a better fundraising environment than 2023.
SB: But not back to the earlier part of this decade, right?
KC: Who knows – we might never get back to that. But ultimately there is still a lot of dry powder among investors, and that capital does need to be deployed. A lot of folks believe – me included – that when those floodgates open, it will come very quickly.
SB: So, I imagine in terms of your advice to founders, you’re telling them to keep a close eye on fundamentals and those metrics you mentioned.
KC: Here are the three biggest pieces of advice that I give multiple times a day:
Focus on the growth metrics that matter to investors around revenue and customer retention.
Be efficient with capital and your time. You need to reduce burn so that you are extending your cash runway in case you’re not able to raise as quickly as you might hope.
Lay the groundwork now for investor relationships, especially those you need to have in the future. Set up an investor newsletter that you send out on a regular basis. Show up and meet people. Say what you are going to do and follow through. The reputation that you build for yourself now, especially among investors, has the potential to pay off in the future once investors start to deploy more capital.
SB: And you have a good vantage point into different industries; are there any that you’re particularly bullish on?
KC: I was born and raised in the greater Boston area, so I can't help but be particularly bullish on the things that are strong here in New England: life sciences, healthcare, pharma and medical devices, among others. So many of the fundraising events that we've seen over the past 18-24 months have been in life sciences, which I think will stay strong. Our country’s health care system needs innovation, and it's exciting to see how people are pushing the envelope there.
And again, thanks to the universities we have here, robotics is strong. We have some great investors who are committed to supporting startup founders and building community and connectivity.
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About the author: Randall Woods is a former editor at Bloomberg News and currently
is a Senior Vice President at SBS Comms, a communications agency for technology companies and startups.