💸 'It's tough out there'
From VCs to loan providers and crowdfunding platforms, those who fund startups are feeling the long-tail effects of a struggling economic environment. But at least we're seeing more transparency about it.
Alternative funding venture Tractor Ventures launched in late 2020, as equity markets were taking off thanks to free money in the Covid era — and the fledgling loan provider followed suit.
But the situation is very different for Tractor right now, CEO Jodie Imam admits.
Like many who provide capital to startups — from VCs to crowdfunding platforms and loan providers — Imam is finding it tough, because the increased cost of living means startups are not growing at the rates they might have a few years ago. This has led to increased risk aversion from traditional funding sources, signalling more trouble ahead.
"What we're finding is there's still a flow of founders coming to us for money, but our ability to approve them is a lot lower, because they're in a position now where they can't actually support a loan as well as they could a year ago," says Imam.
