How to Survive the Startup Roller Coaster in Times of Economic Uncertainty
According to different estimations, around 90% of startups collapse at some point because they fail to maintain or start to generate profit. Despite a flourishing global startup ecosystem, which today is worth over $4 trillion, the life of a such a company is rarely easy. For example, only 8.7% of startups in the Baltic States, a currently promising region in the startup sphere, proceed from pre-seed/seed to series A rounds. In the global arena, venture capital funding conditions are worsening, too. Inflation, rising interest rates and the war in Europe have already stopped 2021’s money splash.
On the other hand, VC funding has never been a promise of success. Out of 200 companies funded by top VCs, 15 (on average) generate nearly all the economic return. Most VC-funded startups face issues scaling their operations and reaching greater maturity, often followed by significant layoffs and difficulties finding a market fit.
Considering this, maybe the tightening pockets of startups’ angels can be a blessing in disguise in times of economic instability? Such names as Zoho, GitHub, GymShark and Oxylabs, among others, indicate that less “easy money” and a disciplined bootstrapping approach can offer a smoother road to the unicorn hall of honor and a solid alternative to VC funding.
