VC fund Beenext tells startup founders how to adapt to the funding winter
- ByStartupStory | May 28, 2022
Beenext, a Singapore based fintech company has released cautionary notes to their portfolio companies to work together with their existing shareholders,check additional capital,revise budgets, reset and adapt to the existing market downturn. It has backed up companies like Bharatpe,Jupiter,Open and others.
Beenext has designed a 18 months basis plan wherein companies have been characterized within less than 18 or more than 18 months runway. For the former, Beenext has asked the companies to single out their focus on monetization for core products, secure longer revenue contacts and cease new hiring. It has instructed them to freeze experimentation on new ideas and business lines.
On the other hand the company has asked the group of more than 18 months runway to prepare for worst case scenarios,reduce burn notably and consider an acquihire if they lack product market fit.
As the current funding will probably last for 24 months seeing the global macros, “Try to top up additional capital to extend your runway” advised the company to the entrepreneurs. It said that flat round is not bad at all considering the current environment.Beenext has also advised to lower salaries, compensate in ESOPs, remove cloud burn by procuring free AWS, leverage partnerships with other companies to sell despite doing everything alone.
Beenext’s portfolio Mfine laid off 300 employees due to financial struggles in the company. Other capital firms like Sequoia, Y combinator had earlier warned their portfolio companies of the market instability and of the funding winter. Unacademy cofounder Gaurav Munjal also said the “winter is here” and the funding would remain scarce for the next 12-18 months.
“Expedite the process to find the product-market fit (PMF) by identifying the right customers and stop spending on non-focus marketing and business development. If you are with less than 6 months of runway and no product-market fit, you may need to consider acquihire or hard reset with only a very core team and pivot” said Beenext.
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