Founders, raising your next round?
The recent data on time span between various funding rounds from Carta is quite alarming:
Image source: Peter Walker, Head of Insights, Carta.
On average, it now takes more than 2 years between fundraising rounds across all stages
Seed to Series A (up to 27 months)
Series A-C (up to 30 months)
Time between rounds getting a lot longer!
Image source: Peter Walker, Head of Insights, Carta.
Growth at all costs is the past. Sustainable, profitable growth is the mantra.
You are in the red (danger) zone, if:
Your model is "Growth at all costs."
You've unsustainable long-term burn rate, low gross margins, negative unit economics/cash flow.
You've a large team and/or huge capital expenditure.
You're dependent on promotions to acquire customers, and they churn if you no longer offer discounts to them.
What should you be doing instead?
Plan your runway for at least 24 months.
Reduce your burn, go lean, and be extremely efficient with your capital.
Focus on positive unit economics, and profitability (healthy gross margins).
Opt for organic customer acquisition, focus on retaining high lifetime value (LTV) customers, and if possible let go of customers if they don't add to your bottom line.
As a last option, explore raising bridge rounds from your existing investors, even if at lower valuations.
Struggling to Raise Funding? Click here for expert assistance!