A recession is worrisome for any business— and rightfully so. Business leaders have to navigate how the economy may affect the health of the company, and employees worry about the chance of layoffs. An economic downturn can be especially stressful for young businesses that depend on investor funding to keep the company afloat. Will investors pull back? Are people still going to invest in your product or service if they’re working with less budget? Did you hire too quickly and ambitiously? These are all questions that startups may be asking themselves in a less-than-favorable economic environment.
Can startups survive a recession?
Perhaps the biggest question of all is whether or not a startup can actually survive a recession. It’s a question that all startups need to consider given the unstable economy of 2023. Of course, the answer is not one-size-fits-all. Determining if your company can survive an economic downturn depends on a variety of factors like the viability and strength of your business idea, existing customer base, how much overhead cost you have, and the amount of cash in the bank.
For a startup, securing funding from investors can be the difference between keeping the lights on and going belly up. Even with an airtight business plan, you may need to do a round of fundraising amidst the recession.
How startups can still secure funding in an economic downturn
As a recession builds, the market drops. It’s just the name of the game. And as a result, investors need to be more choosy and thoughtful in where they allocate their money. Some investors may pull back from businesses they previously backed, while others might put a freeze on any new investments.
That’s not to say securing funding in 2023 is impossible. In light of the environment, business leaders looking for the support of investors need to be more tenacious in their efforts. This means nailing their pitch, flashing their wins, packaging up their data in a meaningful way, and adjusting their budgets to put themselves in a more favorable light.
Here’s how startups can increase their chances of securing funding in a turbulent economy.
Restructure your budget to increase your runway
Investors want to know that you’ve considered your runway, and are in a favorable position for growth. This might require business leaders to restructure their budget in order to make their path to profitability more attainable. Before you get in front of investors, think about where you can trim your budget and reallocate to places with a greater return on investment. Not only does being smarter with your money help with the longevity of your business, it tells investors that you know what you’re doing and will be intentional with the funds they grant you.
Let your data tell the story
Your investors care about one thing: your numbers. While they may be interested in things like product roadmap, your company metrics are what tell them whether you’re worth investing in or not. This includes things like current financial status, projected growth, budget proposal, etc.
Using data visualizations to showcase your metrics in a more meaningful way makes it easier to understand. Graphs, charts, and infographics help your audience digest your data faster, while retaining it longer. You can use things like icons and annotations to call out the most important numbers, telling investors exactly what you want them to pay attention to. This will help investors remember the information you’re telling them when it comes time to make a decision.
Nail your pitch
How you package up your story matters. Nailing your pitch is crucial to getting the coveted greenlight from investors.
A pitch deck is an essential fundraising tool, whether you’re looking to raise $100,000 or $100,000,000. Every startup needs a great pitch deck that talks about their mission, business plan, and company overview. Whether you’re searching for seed funding, growing your company to meet demand, or starting to develop new products and need extra support, a startup pitch deck will help you reach your funding goals.
Using a pre-built pitch deck presentation template allows you to focus on your story rather than the granular details of deck design. Beautiful.ai’s startup pitch deck template can help you tell your story and secure seed funding, raise series A, B, and C funding, or act as a visual aid to guide your story. With the framework done, it gives you back the time you need to nail your message and prepare your pitch for your meeting with investors and partners.
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