After years of uncertainty amid the pandemic, 2022 seemed to offer new opportunities for startups to engage venture capitalists and other investors. But last year proved to be one of the hardest fundraising climates in over a decade. Trends — like low interest rates and loose venture capital — that made it easier to fundraise throughout the past decade have ended, putting pressure on startup founders to find new avenues for growth.
It is impossible to predict which trends will emerge in the coming year. But even in an uncertain economic climate, startup founders may consider doubling-down on core business fundamentals to prepare them for opportunities that emerge in 2023. Consider these three strategies to help build your startup’s growth potential during economic uncertainty.
Lean on Your Mentors
Trusted mentors – particularly ones with experience raising funds during difficult climates – can provide guidance and support good decision-making for your startup. A recent survey by Kabbage by American Express of more than 200 small business owners (SMBs) found that 92% of SMBs agree mentors have a direct impact on the growth and survival of their business.
A mentor with credibility in your industry may be able to bolster your company’s cache by association. Further, your mentor’s confidence in your business can help increase trust in your company among potential investors and partners. Mentors can also help you foster relationships with other established industry leaders and open the door to new growth opportunities, such as potential partnerships and funding.
Networking within your local business network may help make new connections with nearby professionals who can provide perspective about how to build your business’s presence within the community. Omair Tariq, CEO & co-founder of Cart.com explained that having access to a strong, supportive, local business community was one of the factors that influenced his company’s relocation to Austin.
“Part of the reason we moved our headquarters to Austin is that some of the top 10 venture capital firms and growth equity groups have moved there…the networking, culture, and community is just incredible” - Omair Tariq, CEO of Cart.com
Champion Your Talent and Your Achievements
Investing time and attention into your staff and their wellbeing is important but can be particularly valuable during economic uncertainty. In 2022, Microsoft’s Work Index Study found that 76% of employees say they would stay longer at a company that provides learning and development opportunities. Recognizing and elevating employees’ potential internally and externally are not only genuine ways to show you care, but also demonstrate that your company is a great place to work to future talent and investors.
Additionally, don’t be afraid to show off your company’s achievements. Communicate your business’s success through different platforms like LinkedIn, the company website, industry message boards, and more.
Part of the reason we moved our headquarters to Austin is that some of the top 10 venture capital firms and growth equity groups have moved there…the networking, culture, and community is just incredible
- Omair Tariq, CEO of Cart.com
Collect testimonials from online reviews, social media, and surveys to display the great work your company is doing. Take negative feedback constructively to determine the improvements your business should prioritize. Most importantly, act with integrity, celebrate wins, and be a champion for excellent service to your customers and team. Your reviews, your team, and culture can help paint a vivid picture for investors of the company they are potentially funding.
Engage Your Community
Building an engaged local audience and securing industry-specific media coverage may deliver immense value. Smaller, local media outlets can be resources for increasing interest for your product. Targeting the right people with the right platforms may improve your company's visibility and drive engagement.
Word of mouth can be another impactful way to grow your company’s reputation and build hype around your business. Small gestures from established local and industry business leaders may go a long way. Whether you are showing support for board members, key decision makers, or industry experts, actions as simple as making introductions or providing LinkedIn endorsements can positively influence the reputation of your business.
Finally, if your local community is already home to credible, more established businesses in your industry, take advantage of this proximity to engage with successful entrepreneurs that can potentially support your growth and share insights about their own journey. Kimberly Carney, CEO and founder of Fashwire, believes business hubs, like the tech business community in Seattle are “…where it’s at. Being a tech, fashion-based Seattle startup really keeps us aligned with the bigger houses. [For example], we're partners with [Seattle-based] Amazon Activate, which has been phenomenal.”
Even when the economic forecast is uncertain, consider proactive steps to help position your business for growth when opportunities arise. These can include finding good mentors, building a strong workplace culture to attract and retain top talent, calling attention to your company’s successes, and getting involved with your community.