I had done this post six months back with some experiences from the bust, and a promise to come back with more if things worsened. That the financial world is in turmoil is old news now. Recapping some lessons for startups from a crunch:

  • Cash is king – raise money if you can; don’t vacillate on valuations. The first impact of the overall liquidity crisis on Indian venture capital market is beginning to show up – some funds have decided to go slow or not invest in near term. It will get worse before it gets better. Nice explanatory post here.
  • Cash is king – make the money you have go extra mile. Trust me – your company has flab – cut it out. Cut costs with a zero base analysis – there’s more than you think. Watch your receivables hard.
  • Get your blinkers – focus on your existing lines of business, focus on customers. Postpone the more uncertain and long term investments if required. Think about how this downturn affects your customers and your partners – how does it affect you?
  • Keep your team together – share and celebrate successes, be transparent about challenges. Invest in your best people.

Its again one of those times in which some great companies will be built. Make sure yours is one of them!

PS: Canaan continues to be excited about opportunities in the Indian venture space, and continues to invest.