2023 was a wild ride for startups. But 2024 could be just as difficult, as investors prepare to make tough decisions about their portfolios.
Triangle Inno checked in with local investors about what they want to see in pitches in 2024. Their advise: Focus on getting real numbers. And don't raise capital unless you have to.
Because in 2024, just as in 2023, it's not going to be easy.
Lister Delgado, managing partner of Idea Fund Partners (which added nine companies to its portfolio in 2023), advises entrepreneurs to "position your company to not need money to survive."
"Then, present to investors a plan that allows you to be opportunistic with the funds you raise, rather than depend on them," Delgado said. "Your model should keep you at, or take you to, a breakeven point."
Gallery: What startup investors are saying about 2023
What startup investors are saying about 2023
Jenn Summe of Primordial, which made eight investments this year and is aiming to make between 12 and 20 next year, said successful pitches in 2024 will "stand out from the crowd."
"2024 looks like another tough year for entrepreneurs, and many will be asking for funds," she said. "Focus on gaining real traction from customers and make a clear case of why your startup is a better investment than others."
Scot Wingo, founder of the Tweener Fund (which made 59 investments in 2023), said he wants to see authenticity in pitches in 2024.
"Be an authentic storyteller," he said. "Tell your story, don't follow some template."
Robbie Allen, Wingo's partner at the Tweener Fund, warned that the "days of easy money are gone." Pitches in 2024 need to show real business fundamentals to attract backers.
"Also, keep in mind that the default option should be to not fundraise," he said. "The goal is to create a sustainable business without the need of outside capital."
Joe Colopy, the serial entrepreneur and founder of both Primordial and Jurassic Capital (which made one growth equity investment in 2023), also advises startups to "focus more on building a great product and getting paying customers than seeing funding rounds as a sign of success."
He said that if you have to pitch, make sure to pick investors aligned with the stage of your company, its domain and geographic area.
"Blanket, uninformed pitching annoys people," he said.
Tim McLoughlin, managing partner of Cofounders Capital (which made seven new investments in 2023), said he expects to see a lot of competition for capital in 2024.
"There is a lot of pent up deal flow and it will still be challenging for companies to 'get above the noise' and get investors to focus on their company," he said.
Wingo predicts even more in-person meetings in 2024 as there's still a post-Covid demand to meet other founders and CEOs and not enough startup events.
"We have huge numbers of folks new to the Triangle since 2020 that are looking to get involved in the ecosystem," he said.
Down rounds are another thing investors are expecting in 2024. Summe said founders who raised in 2021 and 2022 with higher valuations may have a hard time fundraising at those same metrics "if they haven't gained the traction to support it."
"They're trying to avoid a down round, but it might be an unwelcome but inevitable adjustment to keep going," Summe said.
