Five Things Start-Ups Should Do When The Funding Scenario Turns Gloomy

By Priyanka Sahay
Mint, New Delhi

WWR Article Summary (tl;dr)  It is 2016 and the rush for start-up funding seems to be ebbing again, and many start-ups are finding it difficult to raise their next round of funding. This article includes five things women in business should keep in mind to conserve cash and sustain business till the market opens up.

NEW DELHI

Back in 2001, founder of online travel company MakeMyTrip Deep Kalra was struggling to stay afloat his year-old travel start-up, as tremors of the dotcom crash and the fallout of 9/11 had created a bleak investment scenario and not a single investor was ready to bet even a small amount in the start-up.

Kalra decided he would cut costs to survive.

Two of the senior colleagues took 50% cuts. In return, Kalra made them co-founders. They shifted from a spacious office in Okhla to a mezzanine of the same office. The team size was reduced from 42 to 24 over a weekend.

The measures worked.

The business started recovering and by 2003-04, MakeMyTrip got funded by two angel investors who gave them $200,000. It not only survived the meltdown, but went on to list in the US.

It is 2016 and the rush for start-up funding seems to be ebbing again, and many start-ups are finding it difficult to raise their next round of funding.

Here are five things every entrepreneur should keep in mind to conserve cash and sustain business till the market opens up.

1. Cut down on expansion, albeit, strategically: Start-ups should look at the potential of a city, the current traction as well as the competitor activity. If the competitor has already captured a major chunk of the market in a city, it is wise to exit that city. “You can always come back later. The important thing for a start-up is to survive to fight another day. So play up your strength and not your weakness,” said T.C. Meenakshisundaram, founder and managing director of venture capital firm IDG Ventures India.

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