SaaS startups that ignored VC recommendation to chop gross sales and advertising higher off this yr

Enterprise-backed startups have needed to make myriad spending cuts this yr in an try and both reside as much as a excessive valuation, decrease their burn charge or each. However new knowledge from fintech Capchase reveals that many startups — particularly venture-backed ones — appear to be getting the fallacious recommendation regarding the place to downsize.

Capchase, which lends non-dilutive capital to SaaS startups, checked out how greater than 500 SaaS startups fared in a variety of areas together with income, runway and progress between August and December 2021 and between April and August 2022. One massive takeaway was that corporations that didn’t reduce spending on gross sales and advertising had been in a greater monetary and progress place now than people who did when the market began to dip in 2022.

Miguel Fernandez, the co-founder and CEO of Capchase, mentioned he was initially stunned by this discovering as a result of that doesn’t line up with the recommendation many VCs are giving their portfolio corporations — at the least on Twitter.

Nonetheless, the outcomes do align with the truth that Capchase additionally discovered that the majority bootstrapped software program corporations had been performing higher than VC-backed ones this yr — however extra on that later.

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