Startups Building Better Businesses with Tight Budgets

Founders are building businesses smarter while operating in a cash-constrained environment, causing them to be more mindful of where they spend. According to data tracked by Pitchbook, capital invested in New York-area startups dropped 50% in the first quarter compared to last year. This decrease has led founders to prioritise money-saving strategies to preserve funding and extend the amount of time before securing another round of investment. Operating in similar cash-strapped environments during the 2008 recession, Alexa von Tobel, Founder of venture firm Inspired Capital, emphasises that companies are required to raise each round of funding with an eye towards profitability, which creates a DNA of constraints and scarcity. Stephany Kirkpatrick, CEO at remote-only fintech company Orum, even lost a customer to a competitor because she chose against building credit card integrations, seeing it as economically unprofitable. While many companies are not bootstrapping their firms, they are utilising their venture capital money more judiciously, investing in areas that lead to tangible results.