How Will the Funding Rollercoaster Impact Startups in the ‘Next Normal’?
Uncertainty and turbulence have marked the majority of 2020, impacting global economies and leaving the world of business reeling. While almost every business and market has felt some form of economic impact, startups and scale ups are facing many challenging months in ensuring future funding as investors have new considerations and priorities.
The wider implications of the slowing down of investor funding means that startups will need to adjust their recruitment plans as cash flow takes center stage. This means analyzing skill gaps, evaluating what success might look like in the future and what will be needed to achieve it.
What is the current climate for business funding for startups?
There has been an understandable slowdown in deals as private equity and venture capital firms proceed with greater caution and an increased focus on diligence. Deals are still closing, however, as investors look to grow or diversify their portfolios, but the preference will be for those startups that can be considered ‘safer bets’.
Interestingly, the idea of the ‘safe bet’ in startup investments has changed dramatically over the course of 2020. E-commerce and tech startups that support remote working, shopping or fitness are seeing a predictable growth and spike in deals. Whereas those industries less compatible with life during COVID-19 are lagging behind.
How can funding affect your hiring plans?
When funding is scarce, it’s important for startups to prioritize and guard their cash flow and reserves. This means that any plans to increase headcount or invest in operational expenditure will need to be extremely well thought out.
This means building a strong finance team capable of detailed analysis of real-time data for accurate reporting and forecasting for investors. Building your ideal finance team now can help you gain funding in the long term.
Getting in touch with an executive recruiter who specializes in talent acquisition for startups will help you at this stage as they can help identify the ideal team structure to achieve your long-term goals. Whether through retained search or knowledge partner visits, an executive recruiter will have access and exposure to leading finance experts with specialist startup knowledge across a variety of sectors and funding scenarios.
How to raise capital for venture expansion in the new normal:
When it comes to presenting your business to potential investors in the new normal, you will need to consider how your strategy or product has adapted to the current climate.
Your business plan should reconcile the new lay of the market and consumer behavior with your original strategy and show how the adaptations will be successful. This is best evidenced with data and metrics. Ultimately, preparedness and a tenacious desire to adapt will ensure future funding.
If you are looking for bespoke advice on how to create a finance, accounting and strategic operations team that is tailor-made to suit your needs for the coming quarter, our team of dedicated executive recruiters are experienced and knowledgeable in the current market and can help. By putting people first, we can scope out your requirements and source the right talent to compliment your digital strategies, ensuring efficient onboarding and sound results.
