Startups are in way better shape than traditional small businesses. By our very nature, we need months of runway just to keep running. We're designed to weather this kind of storm because "zero revenue" is the default state. Hearing about Bird cutting 30% of their workforce is awful. But it's nothing compared to the thin-margin Mom & Pop, or medium sized private enterprise that had 1 week of cash on hand and ceased o…
You weren’t around in 2000 or 2008 were you? Your startup is only in “better shape” as long as VCs are willing to keep funding you. VCs are only willing to keep funding you if they have confidence that you will have a profitable exit.
This. I was in a fintech/payments startup that actually survived the initial 2000 tech crash... had found product-maket fit and were closing major customer deals with Banks . But we still substantially cash flow negative (payment networks are great scale economy business but take time to ramp) and in process to raise another ~18 month runway... when sept 11 hit. After which all funders dried up. Years later, that same product we built did become hugely successful, under new ownership. This after the startup was sold in a firesale and all founder/employee equity was wiped out and everyone laid off. Not that unusual a story in startup land, but one were going to see more of this year. Weak business as well as viable ones, all thrown out with the bathwater when a severe economic shock hits.