Part III Vc & Inflation: Why Enterprise SaaS Could Emerge As The Winner In The Current Macro Environment
G reat to see you again for the third and final part of my article on the interplay between VC and inflation. Part 2 focused on Enterprise SaaS and its potential for superior returns in this market. Since we last spoke, it’s been a tumultuous time (to say the least) in startup land with all the news concerning Silicon Valley Bank (“SVB”), Credit Suisse, and the banking sector as a whole. In this final piece, and in light of recent developments and the broader market backdrop, I want to leave you with some valuable insights and lessons learned from founders and investors who are navigating the current market landscape.
Sneak peek of Part 3: Insights and lessons learned so far; how to be (better) equipped for the next downturn
Insights for startups and founders: The #1 priority for companies should be extending their runway for as long as possible. The options available to each startup depend on its stage, underlying profitability, and current capitalisation, but investors and operators tend to come up with innovative solutions at times like these. Another point to keep in mind is deal terms: during downturns, documentation tends to favour the investor rather than the counterparty raising capital, especially in situations where startups try to prevent their valuations from taking a steep haircut. Points like liquidation preferences are regaining attention for example (more on this below).
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