B2B Sales

How to win in down markets? 7 lessons learned

Jeremias Meier

Partner at

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June 29, 2022
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6 Min. reading
Last week we held our masterclass on “How to win in down markets”. In an exciting discussion, seasoned entrepreneurs and investors Andreas Göldi (Partner @ btov), Martin Altorfer and Philippe Bubb (Founding Partners at shared their experiences in dealing with difficult market environments. Here are the 7 most important lessons learned:

1. The environment has dramatically changed

Fact is that since the last financial crises in 08/09, monetary conditions around the world have been very loose, something that was amplified by Covid, and hence capital to fund startups over the past few years has come relatively cheap. With a tightening of monetary conditions and rising interest rates, company valuations go down because the present value of future cash flows are discounted at a higher interest rate and the result is VC’s demanding lower entry levels for their investments in order to meet return expectations of their investors. The process where markets adapt to the new reality is always a volatile one as we are witnessing at the moment.

With a tightening of monetary conditions comes the question, what the effects are on the real economy, meaning the impact on the willingness of companies to spend on new tech.

2. Fundraising becomes more difficult

Expect the fundraising process to take longer. Investors are slowing down capital deployment and will also dedicate more time to the decision-making process. At the same time, good teams and startups with solid traction will of course continue to have access to capital. But investors want to see more data points on product market fit and robust growth. This increases the requirements for a Series A, for example.

In general, very capital-intensive businesses will have a harder time raising funds.

There’s also a requirement for you to do some due diligence of the investors: How are their funds structured? Did they put (enough) cash aside to fund their existing portfolio? Do they have a “clearn” structure, where it is given that the fund itself is not running into financial issues themselves?

3. Capital efficiency is key

Capital efficiently is becoming more important again. Growth at any price was yesterday.

Look at your marketing & sales channels and optimize for faster payback, higher marketing ROI and a healthy LTV/CAC- ratio. This means that channels and activities through which customers were not acquired efficiently in the past may need to be shut down. The same applies to investments in product or R&D: Ask yourself which features can deliver business value in the foreseeable future and prioritize accordingly. Keep in mind that growth is still the most important currency for your startup. But make sure that you have the KPIs under control.

4. Adapt quickly and consistently

History has shown that companies that adapt faster emerge as winners. If your runway falls below 12 months you should be proactive and consider where you can cut costs or extend your runway with a bridge round. Especially if your revenue projection is very uncertain. Adapting to the changed economic environment too late is likely causing more damage than acting too early.

5. (B2B) Sales becomes more challenging

When budgets get tighter more approvals are involved for a purchase. Especially if you sell to larger companies you should expect longer sales cycles. Try to understand who can approve which investments and adjust your pricing if necessary. Think even more about "land and expand" and try to minimize the financial risk for your customers. That means your customers also want a faster ROI. Appropriate features should be prioritized in product development.

6. Over communicate rather than under communicate

In times of high uncertainty, transparent and honest stakeholder communication is even more important than usual. Show your team that you have a plan and be visible and approachable as a leader. Keep in mind to talk early and openly with your existing investors and to report transparently. It may be useful or necessary to do an internal bridge round and for this it is essential to have the trust of your investors.

7. There are many opportunities

We must not forget that the current market development also brings many opportunities. The situation on the labor market could ease a bit and access to talent could improve. Competitors who do not react quickly enough could run out of cash and you can overtake them.

Therefore, keep your eyes open, consistently adapt to the new environment and be a realistic optimist! Winners are made in difficult times!

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