The impact is far bigger on higher burn-rate start-ups.
As a VC, you are always thinking:
- how confident am I that more funding will come in 12-18 months (if needed)
- at a higher price
Right now, the venture markets are partially back for good companies with traction. But, investors are still anxious about the next round. We can’t count on Fidelity and Friends anymore to create a seemingly endless loop of uprounds.
If your burn rate is low, and the next round is a non-issue for now, it’s much easier to get funded today.
