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‘Just break even’ may be the worst possible advice for startups in turbulent times • Technology Flow

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Financial crisis Over the last couple of years startups have had to look for new survival strategies. Today, startups generally fall into two camps: the minority who can continue business as usual because of their strong market position and powerful financial base, and the majority who are forced to adapt to ever-changing conditions.

Among the latter, there are two types:

  1. are losing badly.
  2. Can fly but fall easily.

The venture market is not about achieving sustainable growth, and when a startup prioritizes profits over ambition, the whole point of its existence becomes moot.

In these turbulent times, only a miracle can help the first type succeed. The second type, however, has every chance not only to survive but also to thrive. It is crucial for them to make the right strategic decisions now.

At this critical juncture, the opinions of venture capital market leaders, mentors and experts carry more weight, and many of them openly and unequivocally advise entrepreneurs to extend the runway of their project and push it on the block. A significant number of companies have embraced this idea with enthusiasm, but the sad truth is that it’s probably the worst advice for most startups right now.

One of the most interesting companies in our portfolio almost fell victim to this advice. The mentor advised the entrepreneur to extend their runway as much as possible. We looked at how they achieved this and found that the proposed cost-saving measures would practically destroy growth. At that point, the project is of no interest to anyone. why

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