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expertisesCash being expensive both on debt and equity markets, waiting for improved conditions for any new funding appears essential. However, burn rate reduction and resilience can still be combined with an active approach, to program the best possible uptake during H1 2025.
That’s why I would advise any entrepreneur to first make sure your company lives through the next 18 months. You should have 24 months of runway to avoid requesting additional funds. Reassessing costs regularly will help to reduce burn while earning you valuable months.
Then, and only once this first rule is checked, the best way to direct financial resources toward long-term growth catalysts might be to ask yourself how you want your fundraising deck to look in a year.
In other words, what are the three essential metrics and the killer slides that you must achieve to secure the next funding round in early 2025 (target CAC, upsell, cohorts, # of large clients signed…)? Plan for H1 2024 accordingly with these must-win initiatives, share them among all the team and follow them month after month.
If needed, improving your reporting to track all KPIs, and showcase your achievements in a clear, transparent manner can also be super helpful.
After a shocking year 2022 for tech founders, 2023 was a year of transition from growth at all costs to profitable growth. Most companies are now operating on this “new normal” – often at lower growth rates but with way better unit economics (gross margin, CAC payback, LTV/CAC, rule of 40, burn multiple).
The ones who transitioned the fastest are already profitable or on a clear path to get there. They look at 2024 with serenity. For many others, it might take a few more quarters and a new funding round (possibly a down round) to get to this “peaceful” state of mind.
Anyhow, 2024 will be a year of opportunities. Stock markets have rebounded, VCs are starving for deals to deploy their dry powder and the less agile competitors are suffering.
My advice for Series B+ founders is to get ready and structure their companies to be in position to seize these opportunities. There are many ways to do it, including:
Creating two companies within the company: one focusing on profitability of the current business, the other being a collection of speedboats with dedicated budgets and KPIs to seek growth in new markets & segments; this second one could be led by the founder missing the adrenaline coming with fast iteration and exponential growth;
Reshuffling the company from an organization by geography to an organization by central functions to share best practices and unlock efficiency gains to be reinjected in the growth engine;
Setting up a proper M&A taskforce (with internal resources and external advisors) to drive market consolidation by acquiring competitors, or – often better – carving out entities of incumbents.
I also highly recommend staying close to VC funds. There will be some large funding rounds closed in 2024 and even if you don’t need to raise to get to profitability, it could help you to get way bigger, way faster!