Ursheet took to the stage at TechCrunch Disrupt 2022 to share lessons learned during multiple financial downturns as an investor and a founder, as a follow up to his Masterclass session with the Battlefield cohort. Here are some key takeaways.
Even though in a recessionary environment cash is king and runway is queen, you can’t become over conservative during a recession, because you can’t cut your way to profitability. Build a zero-based budget and then find the areas for quality growth and double down on them. Concentrating your resources and attention to fewer things will increase your odds of coming out stronger on the other side.
At Mayfield we invest in long-term relationships and support entrepreneurs through all the ups and downs of a startup. A common mistake founders tend to make when they are feeling the weight of an economic downturn is partnering with misaligned investors. Don’t take money from investors who are looking for a quick exit – it’s important to find someone you trust who will champion your vision for the company. At the same time, during economic downtowns it’s important as a founder to become situationally aware as fast as you can. Demonstrate to current and potential investors that you understand the environment by planning based on historical multiples.
Although challenging, recessions can provide a great opportunity to build successful and long lasting companies. Hiring during a downturn is significantly easier, and the people you hire will be there because they genuinely want to be at a startup, instead of hopping on the bandwagon. There is also less competition during a recession, both from other startups and big companies. We look forward to investing in entrepreneurs changing the way we live, work and play.
