Patrice Hutin, 
General Manager
Sofiouest

Based on the continuing uncertainty in the macroeconomic environment, it is imperative for startups to present spotless metrics: CAC ratio, Growth Vs cashburn, long runway (18 months a minimum). Quality of recruitments is key, with a robust onboarding process for new hires to make them immediately productive. Long ramp-ups are out of fashion. Give new hires a purpose, they always can get a job elsewhere. Be thankful to people who help you be successful. The people you meet on the way up are the same you may meet on the way down, should there be such a thing. Make sure people that are not as smart as you are can understand your product, so keep it simple!

Sébastien Boucraut
Chief Scaling Officer
Breega

First and foremost, in the pre-seed/seed stage, valuations remain healthy, and even though the market is more challenging, there is liquidity for good projects and strong teams. So don’t hesitate to launch your technological innovations and explore the market for testing.

With the market being more competitive than before, it is advisable to focus on the essentials and work on operational efficiency, lead quality, conversion rates (especially in the acquisition to activation stage), and team cohesion. It is relatively easy to get along when everything is going well, but if the foundational relationships have not been addressed and worked on beforehand, cloudy weather can negatively impact the company. The human/relational aspect, which remains the lifeblood of the organization, is often underestimated.

The right balance between growth and cash management is the backbone of any entity. Therefore, it is essential to be vigilant about the timing of revenue versus contract signing (CASH REMAINS THE KING) and the Net Burn / Net New Revenue ratio, which ideally should be <1 for scale-ups and controlled for startups (the optimal ratio varies depending on the stage of maturity but should be below 2 and approach 1 quickly). Keep in mind that you should have a runway of at least 24 months!

This period is also conducive to reviewing your business model and go-to-market strategy, and assessing strengths and weaknesses in relation to the market and competition. Accepting a pivot is not a failure but a demonstration of agility and resilience that often reenergizes and revitalizes the organization. Stay focused, avoid dispersing your efforts, and work on density rather than geographic expansion or service expansion at any cost. Remember, “Where focus goes, energy flows.”

Finally, in terms of financing, don’t hesitate to explore dual tracks (financing or acquisition) to maximize your options.

The market demands more operational excellence, but liquidity is available for talented individuals and technological projects that have an impact on our daily lives.

Bartosz Jakubowski
Partner
Alven

When the tide is low without flows of cash flocking to the risk-on tech sector during the zero interest rates era, you see who’s swimming naked, meaning that businesses with negative unit economics, nice-to-have value proposition leading to high churn and lower willingness to pay struggle. This moment of truth is harsh, but can prove to be a very powerful forcing function for entrepreneurs to refocus on which part of their product is really a must-have for which segment of their customers and why and how they can extract value from it. 

My advice would be to reprioritize understanding these business levers over less-than-efficient growth:

• Understand your segments, narrow down your ideal customer profile so that they’re really, well, ideal: who are they? How much does the pain cost them? What are their alternatives? Why are they sub-par for these issues? What do you really do differently? Who cares about it? etc.

• Refocus your best resources (especially talent) on these aspects to ensure that this core part of your business is secured and your customers are happy and willing to pay more. From there, you can gradually expand.

Higher cost of capital has led a lot of tech product buyers to either stop expanding, renegotiate, or churn from some of their contracts. Entrepreneurs who focus on deeply understanding their customers and segments and how they map to their product roadmap will enjoy a valuable north star to guide them through troubled waters, and give confidence to the remaining VCs willing to invest in the next tech category leaders, built on solid foundations.