Startups - Play the Long Game: Insights from Market Trends

In today’s market, several key trends are emerging that startups should take note of:

• 𝟱𝟳% 𝗼𝗳 𝗩𝗖-𝗯𝗮𝗰𝗸𝗲𝗱 𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀 have less than 18 months of runway and will need to raise in 2024.

• If you don't have 18 months of cash runway, it’s time to get frugal—start lowering variable and unnecessary expenses, and optimize the rest of your operating expenses.

• 𝗖𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘁𝗵𝗮𝘁 𝗵𝗮𝘃𝗲 𝗿𝗮𝗶𝘀𝗲𝗱 𝗼𝘃𝗲𝗿 $𝟭𝟬𝗠 (significant raises!) have shut down 3X more than in previous years. Don’t be like them.

• 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗶𝘀 𝘁𝗮𝗸𝗶𝗻𝗴 𝗹𝗼𝗻𝗴𝗲𝗿 than in the past—add several months to your timeline.

• Use benchmarks to structure your operating expenses and other key metrics.

• For larger startups, focus on metrics like ARR per employee, but all should keep a close eye on the expense/revenue ratio.

We can help with budgeting, forecasting, and crunching these critical numbers - reach out to us if you need support.

𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆: Standard financial practices and a detailed understanding of your unit economics are more crucial than ever. Skimping on resources for this will not save you money—or your business.

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Credit to Carta, Peter Walker, Waseem Daher, & Hudson Bova for their insightful recording and studies