Is the money drying out?

Let’s look at 3 important trends happening today:

First of all, last quarter, global venture funding scored the second-largest drop in funding in a decade, falling by 23%. Fintech startups accounted for less than a fifth of all the funding while digital health startups are also experiencing a 32% drop in investment from the last quarter.

The second thought-provoking trend is a decrease in the number of unicorn startups in 2022. Recent data shows that the number of unicorn births has fallen by 43% from the 2021 year's peak.

And thirdly, Y Combinator shrunk the number of startups within its accelerator for the Summer 2022 batch to 414 startups (which is a 40% reduction).

All the above speaks to the significant throttling of money for startups amid increased interest rate environment. Since less capital is available, you need to be ready to bootstrap your company. Here are some ways of bootstrapping your business:

  • Outsource expertise rather than hiring staff
  • Be smart about your expenses
  • Identify alternative sources of revenue
  • Find a co-founder
  • Focus on MVP and not the final product
  • Create a “Purple Cow”. Have courage to be creative and stand out among others in the market.
  • Save funds you would spent on a physical office. Keep your operations online.
  • Go for funding to SBA, local banks, or specialized credit resources. We are not talking about Russian mafia here, just to be clear.

With or without unprecedented levels of money flowing into startups, you have plenty of opportunities to launch and become the new Coca Cola, Dell or Oracle. It is all about developing strong customer acquisition and retention strategies. And you can do it!

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