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How to Navigate a Shifting Funding Market: Tips from a Risk Perspective



You’ve seen the staggering inflation rates. You’ve almost certainly been hit by them – at the gas pump, at the supermarket checkout, even in your utility bills.


You’re not imagining it; we’re seeing the steepest spike since 1981.


But what does this all mean to technology entrepreneurs and business owners like you? How do you make sense of it all – and, more important, distinguish the current economic landscape from prior downturns?


Fortunately, you can tap into the vast knowledge and experience of our chief risk officer, Marc Verissimo. (Marc also spent many years at Silicon Valley Bank; he really knows his stuff.)


First, Marc says we should look at past economic swoons, which were primarily isolated within industries (technology/internet) or asset-classed (real estate).

Consider:

  • The Dot.com Crash of 2000–2002 was fueled by the bull market of the late 1990s with an abundance of venture capital and excessive speculation into internet companies, leading to mass layoffs and bankruptcies.

  • The Great Recession of 2008–2010 was triggered by an asset bubble concentrated in the real estate market, resulting in crumbling the whole economy.

Post-Covid 2022–20?? is far broader, Marc notes. The inflationary effect spans an array of industries, including consumer staples, energy, food, travel and other costs.


What's the overriding impact on your business, your balance sheet and raising funds? Well, as Marc sagely observes, “VCs have deep pockets, but short arms.”


Caution is a driving factor. Many VCs await clarity. In short, they’re jittery. Some will draw a hard line between a select few investment targets and everyone else.


Solutions exist, though. Being smart with your capital and developing staying power will have a long-term payoff. Remember, some iconic companies (Google, Microsoft, Amazon, Airbnb, Paypal) were born in recessions. Growth is important, but fundamentals and planning for 30+ months of runway are essential.


Raising VC funding is increasingly challenging.The silver lining is that you can shore up your balance sheet or extend your runway with revenue-based financing from Lighter Capital.


With as little as $15,000 in monthly recurring revenue (MRR), you can raise up to $4 million in capital through Lighter. No equity, warrants, covenants, personal guarantees or pitch decks are required. It’s really that simple.


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We hope you found Marc’s macroeconomic insights informative and helpful.


If you have any questions at all about revenue-based financing, please email our team at info@lightercapital.com.


Stay strong. Stay optimistic. Stay smart.

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