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UK Recession… should we be putting fundraising goals on hold?

Recession, always feels like a scary word. After months of being bombarded with high interest rates and 40-year highs in inflation; a headline of recession can feel like another kick in the teeth for hard-stretched business owners. Most leaders will react by battening down the shutters and hoping to weather the storm.

However, there’s a school of thought in economics that a period of recession is actually a fix to those problems. With less spending power in the market, price pressure eases and inflation falls; central banks lower interest rates to boost spending power. In reality a recession is the last difficult path on the road to economic recovery. So rather than hide under a rock we should get our sturdy boots on, brave that path and recognise, in the mists of chaos there is opportunity. In my experience, the most intrinsic trait entrepreneurs share is optimism. Never is this trait more valuable than at times like these. 

In my new years blog post I wrote about companies like Sport Direct which were launched in periods of depressed markets. It follows suit that if you are able to launch a successful business during a difficult economic period, you will boom when the economy is more clement. I also wrote about how 2023 was one of the hardest years in equity crowdfunding since the industry was born. Despite that, our average platform raise targets and average funds raised above cornerstone beat our 2022 averages. If you get the messaging right, confidence is infectious. 

It’s simple. The best businesses will thrive whatever the economic climate. Investors will still invest. The investment pool will likely shrink, but,  so too will the number of companies seeking investment. So whilst those founders who have failed to “find their brave” and have hidden under those rocks, seize the opportunity.

The way through is to put your best foot forward.  Maintain faith in your mission. Seek the opportunity in chaos. But most importantly make sure that you are exuding confidence to investors. 

As ever, if you would like support in communicating that confidence, at TribeFirst we are poised and ready to support the next crop of recession-busting startups to change the world. 

Fundrasing in UK recession

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