Venture investing, like all areas of business and life, goes through cycles. Summers of overheated exuberance are followed by winters of discontent.
Today, early stage investing is in one of its “down” cycles. This means that investment money, especially at the Series A level, is getting hard to come by. A Round investors are placing ever higher requirements on companies they back and pushing for tougher terms than we have seen in years.
This dour period at the developmental stage might last just a few months, or it could freeze in place well into next year.
The wise entrepreneur should plan for the colder outcome and then rejoice if the sun breaks through earlier than anticipated.
The watchword for winter is ENDURE. If you don’t put enough potatoes in the root cellar, you might not survive until spring, and so have a chance to succeed in summer. Here are four endurance tactics we see our leaders from our portfolio companies adopting right now:
It’s Darwinian out there. Accept that challenge. Adapt. Adjust. Survive.