The new math for tech startups – Axios

Craft Ventures last Friday met virtually with 165 portfolio companies executives to help them navigate the upside down environment for tech companies.
The big message: If your company needs to raise new funding within the next two years, conserving cash should trump growth.
This is a sea change. Growth at almost any cost has been the private tech market's north star for nearly a decade.
"If a company needs to raise, they need >2x growth to attract capital," argues Craft Ventures general partner Jeff Fluhr. "But it's even better if you don't have to raise for the next 24 months. So if growing 3x means you will have only 12 months of runway, but you can extend runway to 24+ months by only growing 2x YOY, I would strongly encourage the latter."
Caveat: None of this really applies to companies flush with cash that have relatively slow burn rates; and those companies could end up being huge beneficiaries of the new math.
The bottom line: VC consensus is building that "wait and see" is no longer a reasonable posture.


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