With IPOs almost nonexistent and venture funding slowing down, the environment has suddenly become awful for startups. In fact, the only hot buzzword in Silicon Valley is “profit.” So what can be done to make sure the capital does not run out? Well, here are some strategies for entrepreneurs to consider:

Create A Frugal Culture

Even though Stuart Wall has recently raised $20 million in venture capital for his firm, Signpost (which operates an online marketing platform), he still runs his business as if it were bootstrapped.

Beware Of Marketing

Marketing is usually a large budget item. More importantly, much of the spending can be a waste!

This is why Paul Kraus, who is the CEO and founder of Eastwind Networks (a cloud-based cybersecurity operator), uses relentless ROI (return on investment) analysis on marketing. “I believe that marketing — in a startup — has just one purpose: generating high-quality demand,” he said. “You need to iterate to determine what combination of channel and message generates the most high-quality leads. Failing fast is key. Being honest about the success of a campaign is more important than being right.”

Transparency

Let’s face it, when it comes to cutting costs, the biggest savings come from laying off employees. Making this choice is extremely difficult but often necessary for many entrepreneurs.  But there will inevitably be ill-will and hard feelings.

This is why being transparent can be critical.

Learn how to digitize your business and stretch your capital: AMG Digital

Source Credit: Forbes