From Seed To Exit: Hints For Fundraising In Challenging Markets

Co-founder and CEO of Group14, a battery technology company elevating all batteries with silicon to accelerate electrification.

Today, markets are cloudy with a chance of recession. But amid the uncertainty, we continue to see venture capital firms optimistically raise new funds and strategically invest in technologies to come out stronger than before. At the same time, these economic waves will certainly batter companies, so leaders need to instill a strong foundation to weather the storms.

After founding, fostering and financing three companies, including spearheading my current company’s latest $400 million financing, I can attest to the grind it requires to pull this off through bear and bull markets. Now, more than ever, it’s important for founders to follow some key, evergreen lessons in order to navigate whatever the market throws at them.

Planting The Seed

From the get-go, identify investors who are wholly invested in your mission and aren’t just in it for quick returns. I learned this lesson the hard way with my second startup. We were trying to close our first major investment round and then the market crashed in 2009, a period even stormier than present day. Understandably, the dawn of the Great Recession caused all of our investors to pull their term sheets—all except one. That injection of capital at such an early stage ultimately saved the company, and because of that firm’s belief in our technology, we soldiered on and eventually were acquired years later.

That has been one of the most powerful lessons to stick with me: Find partners who genuinely believe in you and your company and who will back you through thick and thin. From sudden economic downturns—like what we’re experiencing right now—to ongoing supply chain shortages, startups face innumerable obstacles. Growth, in part, will hinge on partners who also invest their utmost confidence in you