In recent years, the startup ecosystem has undergone a significant transformation. During the sector boom, between 2015 and 2021, investors prioritized those who grew rapidly, without concern for long-term financial stability. However, with the global increase in interest rates starting in 2022 and the consequent reduction in the volume of venture capital investments, the strategy has become unsustainable. Today, the market demands solid financial models, a balance between growth and profitability and a clear path to profitability..
Growth continues as a relevant factor, but it needs to be aligned with a sustainable strategy. Instead of companies that grow 300% per year burning cash, investors prefer those who grow 100% healthy, without compromising the financial structure.
The end of growth at any cost
The era of “growth at all cost” (growth at any cost) has given way to a new mentality. break even (balance point) are the most attractive, as they reduce dependence on constant funding rounds.
The change reflects the maturity of the sector. Startups that were previously able to capture millions just based on ambitious projections now need to present solid governance, operational efficiency and concrete metrics that prove their sustainability. Transparency in financial processes and strict control of costs have become decisive factors in attracting investments..
most valued metrics
operational efficiency: Investors seek organizations that know how to optimize costs and improve margins, with solid financial bases and well-structured processes.
recurring revenue: Business models based on signatures or long-term contracts are more attractive as they guarantee predictability and security.
revenue increase: consistent growth indicates that the company has found a solid market and has the potential for expansion without compromising financial health.
Cash Burn (Cash Burn): Organizations that maintain strict control of spending are seen as more prepared to face economic challenges and avoid excessive reliance on new contributions.
more selective and mature market
The euphoria phase of investments in startups has given rise to a more careful scenario, as a result of the significant change in the mentality of those who invest, who are now looking for companies with solid governance, well-structured processes and financial efficiency. For entrepreneurs, this means that fundraising requires much more than a good story: it is necessary to demonstrate that the business has the structure to maintain itself and grow in a balanced way. The market is more mature, and those who manage to adapt to this new reality will have more chances to thrive and attract long-term investments..
