Insight Partners, a top growth-stage investor in Silicon Valley, wanted to better prepare its current network of founders for a long and painful economic contraction. So the VC firm created a survival guide by examining the track record of its own portfolio companies’ performance as they struggled through the Global Financial Crisis a dozen years ago.
The report relied on data from growth-stage and pre-IPO companies from 2007 until 2008, and found that businesses with recurring revenue models were most resilient in the long run.
The report also found that mid-stage companies facing stalled growth performed better through inorganic growth, such as acquiring a smaller struggling startup with complementary products.
Insight managing partner Hilary Gosher told Business Insider that younger startups are most at risk of going under during a long downturn, but there are still opportunities for startups with existing revenue and product-market fit to strategically adjust to the new environment while continuing to serving their current customer base.
See the report Gosher and her team have been sharing with their large network of founders to help prepare them for a multi-year recession.
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Source:: Businessinsider – Finance