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An Action Plan for Entrepreneurs for Fundraising in the Choppy Waters of FinTech – Technology Flow

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This past year The market has seen a wholesale shift in how it feels about fintech. A year ago, almost every investor had a fintech thesis, companies were racing to go public and investors at almost every stage of the market were fighting to jam money into the hands of entrepreneurs.

That is no longer true. The fall in valuations in the public market has been drastic. A significant number of the biggest fintech companies that went public in the last two years are now worth less than the money they raised. And that decline in confidence has now spread to all stages of the market.

Understandably, many early stage entrepreneurs are unprepared to understand that the valuation of their idea – which may take almost a decade to come to fruition – is worth 75% less now than it was six months ago.

But the long-term outlook for the sector remains unchanged for most investors and entrepreneurs. The good news is that we’re still seeing deals happen. Entrepreneurs who succeed in this environment are quick to adapt to the new reality.

Money attracts money, so find ways to get the ball rolling.

Here are four strategies that the best early-stage fintech entrepreneurs are now using to raise funds:

Recognize that bid/ask spreads are going to be wide

It is not you; That is the market. The best founders recognize that the goal is to close a round, not increase price or reduce dilution.

Reducing dilution is fine, but not at the cost of losing a deal.

Plan for a long fundraising drive

While quick deals still happen with proven founders and exceptional teams, the average fundraising round, including due diligence and paperwork, can now take four to five months. The notion-dock-over-a-weekend days are firmly in the past.

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