3 Reasons Now May Be The Perfect Time To Launch A Startup

By Itay Sagie

Call me an optimist, but when everyone is saying how bad times are to raise capital and how bad the economy is, I prefer to see the opportunity.

In the ever-evolving landscape of entrepreneurship, timing is crucial, and going against the crowd is essential. Good companies can come out of difficult times — remember that Uber and WhatsApp both came out of the 2008 recession.

The current state of the world presents a unique set of circumstances that make it an ideal moment for aspiring entrepreneurs to take the plunge. Here are three compelling reasons why now could be the perfect time to create a new venture.

You can take control of your career

In an economic downturn, job security becomes a luxury that few can afford. This reality, while unsettling, can be a driving force behind the decision to start your own venture. Becoming an entrepreneur puts you in the driver’s seat of your professional journey, allowing you to shape your own destiny.

You’re also not the only person looking for a new career path. Look around and you’ll see an abundance of highly qualified professionals who were not available a year ago, and would be a valuable asset to any company. They might find your venture highly intriguing and potential VCs may find your dream team attractive for funding.

Downturns create unique pain points

In this downturn, a range of pressing real-world problems has emerged, opening doors for innovative startups to make a difference.

Utilizing AI to identify job opportunities could aid professionals navigating a shifting job landscape. Creating user-friendly budgeting and financial planning tools can help individuals manage their finances more effectively during economic uncertainty.

Addressing mental health issues exacerbated by lack of work or by remote work with little social interaction could be a crucial focus for startups providing virtual mental health services to offer support. And supporting the gig economy, which offers both job security and flexibility, is also valuable.

These challenges present ample opportunities for startups to not only navigate the downturn but also contribute to building a more resilient future.

Build now for the economic recovery

Venture capitalists have amassed substantial dry powder just waiting to be invested. As the economic climate stabilizes, VCs will seek out promising startups to fuel growth and innovation.

Entrepreneurs who gear up commercially, utilizing unit economics, are poised to attract this capital when the timing is right.

I imagine, from past scenarios, that this capital will be invested in low-risk high-growth companies vs. high-risk pre-revenue startups. For startups in the seed stage seeking funding, prudent steps include identifying angel investors aligned with their interests.

However, it’s advisable to anticipate conservative funding for pre-revenue ventures, given evolving investment trends. I recommend securing a modest initial sum to validate a product-market fit and promptly transitioning to focus on sales and profitability.

Unless things change drastically, this approach is best suited to the current entrepreneurial landscape.

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Itay Sagie, a guest contributor to Crunchbase News, is a seasoned lecturer and strategic adviser to startups and investors, specializing in strategy, growth and M&A. You can connect with him on LinkedIn for further insights and discussions.

Illustration: Dom Guzman