VCs: Startups should prepare 'flawless' pitches as leverage shifts - Business Insider

The up-ended funding market has now transferred all the leverage to investors still willing to back early-stage companies, according to VCs.

The power shift could be costly for startups desperate to fundraise and extend their runways through the economic downturn, VCs warned. Four suggested that startups hold off on raising any funding unless it was absolutely necessary. Startup founders should "be ready for some predatory terms," one VC told Business Insider.

One VC said that startup founders about to pitch should "be prepared to be hammered," by prospective investors, and that they should come with a "flawless" pitch. "The money is out there but it is harder to get and the equity take will be higher," they added. Investors such as Sapphire Ventures President Jai Das, who was not a member of the survey panel, are alsoDas told Business Insider that startups are rushing to accept deal terms that swing too far in favor of VCs. These terms include guaranteed, generous returns on their investments, which could be harmful to startups in the event of a sale or an IPO.

Having a flawless pitch has always been important to ensure the best terms on any financing and attract the most helpful investors.

This is exactly why we are here now. Why were they throwing money at garbage projects before? How incredibly stupid are these VCs? 🤦🏼‍♂️

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