3 ms·
To get around this will companies just extend their runway with a line of credit or some other form of debt?
by makestuff 2y ago
To get around this will companies just extend their runway with a line of credit or some other form of debt?
- ckdarby 2y agoThat is possible, or hit break even. You'd be surprised how quickly a company can go from -50% margins to positive margins when their job is on the line.
- tenacious_tuna 2y agoAbout a year ago my org made shaving costs our highest priority. Our infra team spent half a year slashing our cloud spend, and we've been pushing hard to become cash flow neutral. I have to imagine this priority shift is in part due to the money markets being what they are.
- YetAnotherNick 2y agoAlso, for the heavy loss making sectors, the marketing budget became close to 0.
- mobattah 2y agoThere are several strategies companies can employ. One common approach is to raise an extension or bridge round. Many startups are adopting this method, with estimates indicating that approximately 40% of current funding rounds fall into this category. In these cases, companies raise funds at the same valuation as their previous round, often labeled as Series A+ or Series C+ or Series B Extension. Another, less common strategy involves using a SAFE (Simple Agreement for Future Equity), which will convert to equity during the next priced round.