Learn more about Jonathan Lowenhar at ETWadvisors.com.
We guide a lot of fundraises. And we see them across a wide spread of geographies, domains, and stages. 125 startups. 300+ raises in total. $1.5B+ in total capital.
We’ve worked with startups ranging from Seed stage med-tech in one corner of the world to growth-stage fintech in another. Our founders range from first-timers in Tel Aviv to veteran operators in the Bay Area. I’m seeing new patterns worldwide. And if the patterns hold, the way founders approach fundraising will need to shift.
Founders from the last decade are all children of summer. The capital was easy. Raising money required just weeks, diligence was light, and negotiations were gentle. But winter has arrived. Valuations, round sizes, and terms have all shifted dramatically in investors’ favor.
In the last few months, a number of our late-stage Enjoy The Work companies have raised rounds between $20M-$50M. Each one was a slog. Each one took longer than anticipated. Each raises flirted with failure. Each one involved negotiations that were anything but straightforward. And each one had PE competing with venture firms to win the deal.
— Raising capital will take comparatively far longer
— Diligence will be far more intense with far more financial forensics
— Negotiations will be more adversarial (re-trading will be more common)
But what feels most important to me is for founders to accept that the fundraising tactics of the last decade may not work in the years ahead.