Matt Cohen
Contributor
Matt Cohen, founder and managing partner of Ripple Ventures, was the founding investor of Turnstyle Solutions, which was acquired by Yelp in 2017.
More posts by this contributor
VCs and university endowments should partner to make venture more diverse
Founders must learn how to build and maintain circles of trust with investors
With the economic downturn and associated uncertainty, startup founders at every stage have been rushing to shore up their balance sheets and extend runways.
I’ve been recommending that founders plan to have at least two years of runway in the bank (ideally three). However, if you were in the process of raising a round or just embarking on your next fundraising circuit, that can be a tall order.
Founders of such companies are faced with a tough decision: waiting it out and hoping the six to 18 months of runway they’ve got can last them through a potentially protracted downturn or securing extra runway via a down or flat funding round.
Remember, if you don’t ask investors for support now, someone else in their portfolio will.
I lived and invested through the 2008 crisis, and I’ve been trying to share the lessons I learned through that struggle with my portfolio companies, some of which I want to share with you.
One of the biggest lessons I’ve learned is: Err on the side of caution and secure the financing you need to be considered “alive” as a company, even if that means taking a flat or down round.
I’m telling ev …
