. The long story short is: it was a terrible year for raising capital. The global market was down 30% year-over-year, to its lowest levels in six years. The U.S. market fell to its lowest levels in 10 years, down 21% in the last quarter alone. Gone are the days of “unicorn” creation , mega-sized financings, and excessive valuations. And, investors simply can’t exit the investments they have already made, with an anemic IPO market.
You need to hunker down to focusing on your core business and most profitable product lines, remembering that your marketing efficiency during a down market will also be negatively impacted. So take out your hatchet, and start chopping away at all non-core and discretionary expenses. And when you are done, if you do not have enough cash on hand to survive the next 18-24 months without requiring any additional financing, you have not cut enough.
If you have cut all you can cut out of your expense base, and there is still a capital need, you will need to seek alternative investors outside of the traditional venture capital industry. This could be friends and family, angel investors, crowdfunding, venture debt, credit cards, asset backed loans , revenue share loans, home equity loans, etc. Time to pull up your bootstraps and get creative in your potential funding paths. But focus on equity investments, if you can.