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On today’s Business Beat, Jeff shares worrying news that a pullback in capital investment is impacting startup spending plans and growth.
Tune in below for details:
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Good morning, Paul!
We know that the lifeblood for startups is access to early funding to make it all go. Whether from angel investors or venture funds, there’s just no doubt about it, it’s simply critical. Well, now new research just published makes clear that there’s a growing sense of concern among U.S. startup leaders, as economic turmoil creates pullback in the capital markets, and that means many startup leaders are now pulling back on their more aggressive spending plans.
The new information comes from Qualtrics and now indicates clearly that founders are concerned about their lack of cash to operate and grow, in fact so much so that it’s their No. 1 concern. Eighty-eight percent of the 250 founders surveyed by Qualtrics indicate so.
Now what are these startup leaders doing to proceed with more cautious spending? Some are curtailing new hiring while others plan to boost pay to retain existing employees. Even still others are looking toward part-time workforce options and even remote work options to keep costs.
Well, Paul, first, it’s the pandemic then supply chain issues and inflation. It’s tough out there for many startups, especially those in pre-revenue early stages of their evolution during which operations and growth are largely dependent on investment by outside investors.
Well, we’ll keep an eye on this to follow the trend, and we’ll keep hoping that this is a short-term pullback rather than a prolonged environment now in which capital will be much harder to come by and in which startup growth will be slowed.
I’m Jeff Sloan, founder and CEO of startupnation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.