Answer
To handle a down round, accept a lower valuation with clean terms rather than a higher valuation with aggressive terms that could harm future fundraising [1, 8]. Avoid clinging to a previous high valuation, as this signals a misunderstanding of the current market [8].
Concrete tactics include:
* **Budgeting:** Create a "wartime" budget to identify cost-cutting measures and extend your runway to 24+ months [1]. Make deep, decisive cuts to burn rather than incremental ones [8].
* **Pitch Narrative:** Update your pitch deck to emphasize resilience and capital efficiency, not just growth-at-all-costs [1].
* **Investor Targeting:** Build a list of 30-50 investors who have recently raised a new fund or made relevant investments [1].
* **Financial Modeling:** Add a "Plan B" scenario to your financial model, showing how you can survive and reach milestones with slower growth and a tighter budget [1].
* **Transparency:** Be radically transparent with existing investors about challenges and your plan, as they can be a source of bridge funding or introductions [8].
