Holden Spaht
Contributor
Holden Spaht is a managing partner at private equity firm Thoma Bravo.
A new year is upon us, and with it comes uncertain, and uncomfortable, market conditions. Accompanying those conditions are equally uncomfortable decisions. For startup founders, determining which path is right for their business may require fundamentally rethinking the way they measure success.
The business climate in 2023 will be unfamiliar to many who founded a company in the past decade. Until now, a seemingly endless stream of relatively cheap capital has been at the disposal of any startup deemed by the VC world to have high growth potential. Everyone wanted a piece of “the next Facebook.” With interest rates near zero, the risks were relatively low and the prospective rewards were astronomical.
Burning money to chase growth became the norm; you’d just raise more money when you ran out. Debt? Who needs it! Existing investors were happy to play along, even if their share in the company was somewhat diluted — growing valuations kept everyone sated.
Over the years, this p …
