Raising capital will be much more difficult now.
You should lower your “burn rate” to raise at least 3-6 months or
more of funding via cost reductions, even if it means staff reductions
and reduced marketing and G&A expenses. This is the equivalent to
“raising an internal round” through cost reductions to buy you more
time until you need to raise money again; hopefully when fund raising
is more feasible. Letting go of staff is hard and often gut wrenching.
A re-evaluation of timelines and re-focus on milestones with the eye of
doing more with less will allow you to live many more days, and the
name of the game in this environment in some
respects is survival–survival until conditions change.
If you are in a funding cycle, you should raise your funding as soon
as possible and raise as much as possible but face the fact that if you
can’t raise money now you must cut costs.
In an email to his portfolio companies. Full text over on TechCrunch.