Kolja Heskamp, Managing Partner at torq.partners

The venture capital funding market shows signs of picking up and will recover further throughout 2024. However, if your business doesn’t involve AI, quantum, cyber security, or IoT, you might not feel the love as you did before. If this applies to your company, here are my recommendations for you. 

Firstly, it is time to buckle down and take a leaf out of the bootstrappers’ book. Focus on your economics and margin structure. Work your cash conversion cycle and make your runway count.  Unleash your internal financing power as much as possible to reduce your external financing requirements. Focus and operational excellence are key to keeping it going, and growth for growth’s sake should be questioned more than ever. 

Secondly, while you focus on your business, cast a wider net in your fundraising efforts. Understand what the bankability of your business is. Assess the collateral worth of your order book, recurring revenues, and assets. Learn how to build structures to utilise your customers’ or suppliers’ creditworthiness. Outside of venture capital, connect with strategic investors, family offices, PEs, and traditional investors early. It will not be the unicorn exit you imagined, but it could keep your business alive, creating value for your shareholders and stakeholders alike. 

Being financially savvy will not save you from an underperforming product or lack of traction, but it may just be the skill to tip the balance in your favour.

Léa Verdillon, Partner at Aglaé Ventures

2024 will be the year of truth for founders who planned for 24 months of runway when the market started to change in 2022. If the startups succeeded in improving their cash efficiency while continuing their growth, it would be a great moment to raise the next round of financing and grow in the equity story. Valuations may have changed, but VC funds are ready to invest again. For others, this could be more complicated to find fresh money on the market, especially those who have a lot of debt and need to start reimbursing banks. Ensuring the survival of the company is the number one goal of a founder, followed of course by the product vision and the recruitment of an A team.

With the economic downturn, the customers had to focus on the software, which is bringing ROI, solutions that have a significant topline effect or productivity advantage. That could explain some retention issues for SaaS products in 2023. Founders then took the opportunity to focus on real value in their product roadmap: this is the most important thing at the end of the day. Product, product, product. Keeping the pace of innovation, listening to users, and building only features that bring business value. Good products can drive your growth but also keep your customers dependent. 2023 was also a good moment to adapt the ICP while improving the customer success department. The companies are now stronger and ready to take the chance of going back to high growth.