Do FinTech Founders Take Lower Valuations To Stay Funded?
Do FinTech Founders Take Lower Valuations To Stay Funded?
What is a FinTech CEO to do?
He or she faces a cash crunch upcoming in the next few months?
So raising cash becomes imperative?
However, the options became limited when the VC’s stopped calling back.
So do you go to your rich uncle?
Or do you go begging to current investors?
Or do you accept a huge valuation cut, which isn’t abnormal. When you look at Netflix stock, its not like your business, or “coolest FinTech company ever” hasn’t lost value in the last 6 months. Every tech asset around the world has lost value simply because the markets won’t pay as much for them. Even the fastest growing FinTech firm out will have a tough time growing past a gigantic valuation multiple cut which occurred throughout the capital markets over the last few months.
So now its a question of survival.
Can you cut enough expense to weather the storm until valuations froth up again? Of course that could take several years to occur. And in the meantime, no matter how much you cut that burn rate, well, you are still headed off a cliff.
