Investors urge tech start-ups to hoard cash


(Vladislav Kozub) #1

A number of VC firms featured in the FT article suggest startups to keep more cash than ever, 18 to 24 months of operational costs. All due to concerns of the slowing economy and potential bear market, which has not been experienced by the companies founded in the last ten years.

While investors are not yet using such dramatic language, some have warned tech companies that a downturn in the economy could cause bigger businesses to cut IT spending and make it more difficult for funds to raise capital.

Whilst this may be mostly relevant to the US, does anyone think the UK startups should be as concerned as the US ones?


(Giridhar Tammana) #2

They should be, with addon Brexit uncertainty.


#3

Yes, this (capital has been cheap and plentiful for ages, it might not be in future). Also startups might consider raising more money now than they need, even if it feels like it’s a sub-optimal stage or terms.


(Andrew Clark) #4

I don’t agree. There are huge pools of capital for Fintech in London right now. Monzo, Freetrade etc won’t have issues, but other companies possibly.