E&Y, Pitchbook, and others forecast a 40% decline in VC investing

[angelsong]

VC and Angel funding will decline by 40% in 2023, resulting in a net decline of $80B available to startups. This will create a more competitive and selective environment for new capital, and M&A activity will have a high bar. Startups should focus on business fundamentals, financial health, and value creation to remain competitive and attract capital. Additionally, entrepreneurs should pay attention to their mental health and the mental health of their team. Full Article here

 

[subcdedenoc1980]

@angelsong If you have nice-to-have software, 2023 is going to be a tough year.

 

[angelsong]

@subcdedenoc1980 Agree. And regardless of your core value proposition, include the CFO as a target persona. If the CFO does not see the value, the purchase will likely not be approved.

 

[subcdedenoc1980]

@angelsong “No no you don’t get it. Now our team can press 1 button instead of 2 for email follow ups”
-VP Sales

“Your guys are order takers. Gimme a break pal.”
-CFO

 

[vical]

@angelsong I see it like this, if a new SaaS aap doesn't generate at least $1000 MRR in first 6 months, doing all the marketing and sales, then it has to be abandoned.

 

[vical]

Or something similar metric depending on the market.

 

[angelsong]

@vical The important thing is to define a key figure that will tell us if we are on the right track, and do not lie to ourselves by saying that things will improve by magic. For our last 5 SaaS ventures, my co-founder and I agreed to have at least $100K in pre-sales and $500K in ARR during the first 9 months, or we would shut the company down. We shut down one at the 12-month mark (and lost $500K). In the 4 other ventures, we had successful exits between 0.8X and 12X ROI on the money we invested. We Bootstrapped each company