Growth with Profitability is the next trend for tech startups.
Normally, startups are always burning cash to reach Growth KPI at all costs.
The reason is they are pushed by their venture capital investors because this is VCs’ Exit Strategy.
However, everything changed since Covid19 came, followed it is the high-interest rates, inflation, low customer rates despited high marketing paid. Those macro-environment force startups to focus on profitability. Because the more your startup reaches profitability soon, the less money they need to raise from the VCs at any valuation to grow.
Why is it important to care?
1. With the interest rate forecast and high inflation in VND this year, it reasonably means that the average startup could see its valuation cut at least in half. It means your startup is under pressure to grow faster with a lower valuation when selling your equity to VCs.
2. If your company is burning cash and not able to raise the next round after 15-18 months, you will have to layoffs, conflict with the board members, and force acquisition with a low valuation.
To summary, your startup should optimize to reach profitability as soon as possible, and you will have more choices (keep doing, raise funds with good valuation, sell the company)
#startup #Profitability #Startups #Fundraising #TipSeries
From Corey Kossack, paraphrase by Hai Nguyen
Fundraising Coach 
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