It's been a tough year for entrepreneurs trying to raise capital for their startup operations. But the worst may be yet to come.
A “day of reckoning” is coming for entrepreneurs, says Ryan Moore, founding partner of Accomplice.
Moore was one of the panelists at Bull City Venture Partners' Founders First event at the Carolina Theatre in Durham on Wednesday. Other speakers on the VC panel, moderated by Bull City co-founder Jason Caplain, were Mindy Isenstein, partner at Andreessen Horowitz, and Haley Bryant, principal of Hustle Fund.
“I think this is a time for radical candor and transparency,” Moore said, adding that bridge rounds can be “kicking the can.” And too much of it has happened, boosted by the long stretch of low interest rates. But the world has changed.
It’s a time for “reset,” he said. Funding rounds need to be followed by a major inflection – and that hasn’t always happened.
“It’s going to be a really interesting day of reckoning. … We will come out of this healthier,” Moore said.
“DraftKings doesn’t exist in this environment,” he added, telling entrepreneurs in the crowd that money might be harder to find compared to years past – and that they need to prepare for it realistically. “You’re here because you’re an entrepreneur. … Go back to work and figure it out.”
Moore said he bets on talent – that successful startups are led by someone who “just did it better than you.”
But even with talent, it’s a hard time to fundraise, Bryant said. And exits are taking time.
She said founders “are really tired.”
“It’s not a race, it’s an infinite game, it’s important to pace,” Bryant said.
Moore said he relies on founder introductions – not cold emails – for inquiries. He looks for big market opportunity. “Make sure it’s large enough to sustain a very large business because that is what we’re all looking for," he said.
“Companies are going to need to raise money … there are going to be some hard conversations,” Isenstein said. “It’s going to be, this is where the company is valued now.”
All three panelists said they prefer “raw” pitches to perfectly polished. And they value team over product market fit.