Turning Your Startup in a Bear Market: Become Undeniably Attractive to Funding

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As founder, it’s easy to say: “Of course, we’ll deploy it!” But in fact, removing the rod is not so easy. How to set yourself up for success in this new world? Which levers should be pulled first? How do you ensure that you can provide capital when needed, or that your company can certainly be funded?

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Right now, becoming every founder’s guiding light should be undeniably funded. This means that you have built an effective company that will no doubt attract the attention of venture capital and funding when the time is right.

Identify and carefully study performance KPIs

As you begin your journey to becoming an undeniable source of funding, you must prioritize KPIs that represent performance. Vanity metrics have taken a backseat in this new world, and you’ll have few ways forward unless you prove you’re efficient.

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There are five KPIs that matter:

In this new chapter, executives need to think like CFOs.

  1. Growth rate: The rate at which your annual recurring income (ARR) is increasing. Can you still grow 2x or 3x year-over-year right now? How should your product change?
  2. Customer Acquisition Cost (CAC): The amount of money that must be spent on sales and marketing to acquire one customer.
  3. Payback period CAC: The time it takes to recover the cost of customer acquisition. Shoot for a period of time that is less than 20 months.
  4. Gross profit: The cost of serving customers with both your technology and your people. The industry standard is about 75%.
  5. Record a few: The amount you spend to increase ARR. 1x is great, but less is even better. This metric, popularized by David Sachs, has become a guiding light for my current company because it doesn’t lie. You cannot hide expenses or hide expenses in other departments. It reveals the hard truth about your spending, growth, and fundraising.

Study your business and reprioritize

Once you have a good understanding of your performance metrics, it’s time to take action. Regardless of your segment, industry, or customer type, I believe you need to do the following.

Carefully study your budget and cut it to the required

As a founder, you must take a deep dive into each department’s budget – don’t leave that to others. There’s no room for fluff.

Accounting for personnel costs

Credit: techcrunch.com /

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