The Best Way To Raise Business Capital In A Wounded Economy

It’s tough raising investment right now. There are fewer investors and the amounts being invested are smaller. How should startups respond if they still need to raise business capital?

There’s a saying, “when the going gets tough, the tough get going”. The sentiment of perseverance is positive – you need a good dose of that as a startup founder! But, is there an element of “do more of the same” in this saying too? That’s less helpful. A change in your market needs a different response – not just more of the same.

Maddyness recently asked Focused For Business’ founder Hatty Fawcett how she thought startups should respond as investors pull back in the light of a difficult economic climate. Hatty was quick to stress there’s no one-size-fits-all answer. Instead she provided a number of considerations to reflect on, and recommended adjustments you can include in your funding plans if you’re raising investment in a difficult economic climate.

Raising investment in difficult economic times? How should startup founders respond?

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FAQs: Raising Investment in a Tough Economic Climate

Why is it harder to raise investment right now?

Economic uncertainty means many investors are more cautious. There are fewer active investors, and the amounts available are often smaller.

Should founders keep fundraising if conditions are difficult?

Yes, but it’s important to adjust your approach. Doing “more of the same” isn’t enough. Founders should refine their pitch, revisit financial forecasts, and consider alternative funding options alongside equity.

What can startups do to improve their chances of raising capital?

Focus on demonstrating traction, cutting unnecessary costs, and proving resilience. Investors are more likely to back businesses that show they can adapt and thrive despite challenges.

Are there alternatives to equity funding in a downturn?

Yes. Founders can explore options such as revenue-based finance, grants, start-up loans, or strategic partnerships. These can provide vital runway while investor activity is lower.

How should I adapt my funding plan?

Review the size of your raise, extend your runway where possible, and be prepared for longer fundraising timelines. Investors will want to see that you’ve planned for tougher conditions and can stretch the capital you secure.

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Hatty Fawcett

CEO & Founder at Focused For Business

Hatty is the founder of Focused For Business, and has a wealth of experience in growing startups and securing early-stage equity investment for startups. Hatty had a 15-year career in marketing before completing an MBA at Imperial College and working in a succession of startups. She raised over £250,000 for her own startup and also managing some of the investments former Dragon’s Den star Kelly Hoppen made when she appeared on the TV show. Hatty’s dual perspective, both as a founder who has secured investment and as a coach and advisor to startups raising investment, gives her a unique perspective which she uses to demystify the investment process and empower entrepreneurs. Her dedication to levelling the playing field in equity investment caused her to create the Funding Accelerator programme and has earned her the title of Adviser of the Year twice in 2022 and 2024 from Enterprise Nation. She was also a finalist in the Great British Entrepreneur Awards in 2023.

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