International, April 4, 2023.
Juan Antonio Corbacho explains the Bridge rounds in Start Ups before the new increase in their expenses
Juan Antonio Corbacho (@mrcorbacho) manager of Jcapital and disseminator explains what the Puente rounds are and what they mean for start-ups. Unlike other crises, such as the subprime of 2008, where financial institutions as important as Lehman Brothers were seen to fall, this new recession and crisis come silently and many start-ups have not been able to prepare.”There are two very important factors that are unleashing this new situation for start ups, one is already being reflected and it is the CPI The increase in the cost of energy, among other reasons, has made business costs more expensive and month after month inflation has risen without control. Derived from this increase and trying to control the increase in prices, central banks have increased interest rates to cool the economy and this has collateral damage that directly impacts the economy of companies.” If you have taken advantage of the years of low interest rates to sign a variable interest loan and have to review its conditions in the coming months, you will have a sharp rise in the cost of interest. A rise from 0% to 5% of the fed rates in less than a year is really almost unaffordable for any start-up with third-party financing. For all this, new rounds of financing will be seen in the coming months for start ups, but they will not be Seed rounds or Rounds A, they will be ‘Bridge rounds’, rounds that allow start ups to survive and endure this new situation of increased costs for the company, not only from the point of view of inflation , increases in wages or energy costs but also from the point of view of increased financial costs derived from the rise in interest rates “I have named this new situation ‘The silent crisis of the Start Ups'”.
Contact Contact name: Juan Antonio Corbacho López Contact description: mrcorbacho on instagram Contact phone: 692973722