CEO Today - January 2023

While reflecting on my own journey as a founder and the conversations I have had with fellow entrepreneurs and investors on how to launch and scale a new business in these challenging times, my motto is still - Mission possible. Despite the challenges we see today, I am convinced anyone, no matter where they come from can build a successful business. None of the entrepreneurs I know has kept their original business plans during a challenging context – if they didn’t adapt, they would have faced extinction. Phil Hutcheon is living proof of how to adapt and pivot a business in difficult times. Founder of DICE, a ticketing startup created in the UK, founded in 2014 (5 years before COVID-19), he had the initial idea to make discovering and buying tickets easy and accessible for concerts and cultural events. But in March 2020 when global lockdowns began, live concerts and events disappeared almost overnight. Phil quickly realised that fans were still in need of music and enjoyment, even if stuck in their living rooms. Six weeks later, DICE unveiled a new business model of live events: DICE TV...all online and with live audience participation. By year’s end, DICE TV was bringing in millions in revenue, opening a new channel for the business that will likely remain even after the pandemic subsides. One of the challenges of entrepreneurship is that you cannot expect to only operate in times of prosperity. Today rising interest rates have caused a significant decline in the stock market as central banks work to fight inflation across Europe and the US. The Nasdaq, an index that largely tracks technology companies, has declined over 30% this year, and estimates suggest investors have lost over nine trillion dollars in stock market value over the same time. Venture capital investments which drive funding for earlystage entrepreneurs are also down significantly. Data from CBinsights revealed the largest quarterly percentage decrease in funding in ten years, dropping 34%. Here is the good news for founders. Despite these drops in the market, investors still deployed $74.5B in venture capital to 7900+ new startups in the last three months. This remains some of the highest levels of funding on record. In comparison, fromQ1 2018 to Q2 2020 the largest quarter of financing was $82B and on average was under $60B. Starting during Covid as governments lowered interest rates and capital flowed freely we saw exponential increases in the pace of investment and valuation. Rounds were exceptionally larger, fast and at a higher price. Today, the market is resetting back from these historically high prices and paces of investment. But when you zoom out, there is still record investment in entrepreneurship and startups. If you are thinking of starting your own business today, look beyond the headlines. The process of raising money is complex, time-consuming and harder in difficult times. But the truth is that many investors know that these kinds of contexts can bring new opportunities. My own firm and most of our peers have remained active throughout 2022 and plan to continue doing so. However, it is critical in today’s market that you can explain why your company’s mission matters. vision & strategy “Despite these drops in the market, investors still deployed $74.5B in venture capital to 7900+ new startups in the last three months. This remains some of the highest levels of funding on record.” 52

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