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The US Securing Open Source Software Act of 2022 is a step in the right direction • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in Column, cybersecurity laws, EC Column, EC Cybersecurity, Government & Policy, open source security, SecurityNo Comments

Passionate about technology and open source software, Javier Perez is chief open source evangelist and senior director of product management at Perforce. Cybersecurity continues to be a hot topic. More and more organizations are getting hit by ransomware attacks, critical open software vulnerabilities are making news, and we’re seeing industries and governments coming together to discuss initiatives to improve software security. The U.S. government has been working with the tech industry and open source organizations such as the Linux Foundation and the Open Source Security Foundation to come up with a number of initiatives in the past couple of years. The White House Executive Order on Improving the Nation’s Cybersecurity without a doubt kick-started subsequent initiatives and defined requirements for government agencies to take action on software security and, in particular, open source security. An important White House meeting with tech industry leaders produced active working groups, and only a few weeks later, they issued the Open Source Software Security Mobilization Plan. This plan included 10 streams of work and budget designed to address high-priority security areas in open source software, from training and digital signatures, to code reviews for top open source projects and the issuance of a software bill of materials (SBOM). The Act directly addresses the top three areas of focus to improve open source security: vulnerability detection and disclosure, SBOMs and OSPOs. One recent government initiative regarding open source security is the Securing Open Source Software Act, a bipartisan legislation by U.S. Senators Gary Peters, a Democrat from Michigan, and Rob Portman, a Republican from Ohio. Senators Peters and Portman are chairman and ranking member of the Senate Homeland Security and Governmental Affairs Committee, respectively. They were at the Log4j Senate hearings, and subsequently introduced this legislation to improve open source security and best practices in the government by establishing the duties of the director of the Cybersecurity and Infrastructure Security Agency (CISA). This is a turning point in U.S. legislation, because, for the first time, it is specific to open source software security. The legislation acknowledges the importance of open source software and recognizes that “a secure, healthy, vibrant, and resilient open source software ecosystem is crucial for ensuring the national security and economic vitality of the United States.” Finally, it states that the Federal Government should play a supporting role in ensuring the long-term security of open source software.

How much tax will you owe when you sell your company? • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in Column, EC Column, EC How To, qualified small business stock, Startups, tax lawsNo Comments

Peyton Carr is a financial adviser to founders, entrepreneurs and their families, helping them with planning and investing. He is a managing director of Keystone Global Partners. More posts by this contributor With a Section 1045 rollover, founders can salvage QSBS before 5 years Advanced tax strategies for startup founders When a founder sells their company, its valuation gets a lot of attention. But too much emphasis on valuation often leads to too little consideration for what stockholders and stakeholders pay in taxes post-sale. After an exit, some founders may pay a 0% tax while others pay over 50% of their sale proceeds. Some founders can walk away with as much as two times the money as other founders at the same sale price — purely due to circumstances and tax planning. Personal tax planning can ultimately impact a founder’s take-home proceeds as much as exit-level valuation changes can. How does this happen? Taxes owed will ultimately depend on the type of equity owned, how long it’s been held, where the shareholder lives, potential tax rate changes in the future and tax-planning strategies. If you’re thinking about taxes now, chances are you’re ahead in the game. But determining how much you’ll owe isn’t simple. In this article, I’ll provide a simplified overview of how founders can think about taxes as well as an easy way to estimate what they will owe in tax upon selling their company. I’ll also touch on advanced tax planning and optimization strategies, state tax and future tax risks. Of course, remember that this is not tax advice. Prior to making any tax decisions, you should consult with your CPA or tax adviser. How shareholders are taxed When it comes to minimizing capital gains tax, QSBS (qualified small business stock) can be a game-changer for people that qualify. Let’s assume you’re a founder and own equity or options in a typical venture-backed C-corp. A number of factors will determine whether you will be taxed at short-term capital gains (ordinary income tax rates) or long-term capital gains, also referred to as qualified small business stock (QSBS) rates. It’s essential to understand the differences and where you can optimize. Below is a chart summarizing different types of taxation and when each applies. I further break this down to show the combined “all in” federal + state + city taxation, if applicable. Founders with exits on the horizon that will raise more than $10 million should explore some of the advanced tax strategies I covered in one of my previous articles, since there are opportunities to multiply or “stack” the $10 million QSBS exclusion and minimize taxation further. Image Credits: Keystone Global Partners As you can see above, some of the more common levers that influence how much tax a founder owes after an exit include QSBS, trust creation, which state you live in, how long you’ve held your shares and whether you exercise your options.

Investors are looking for market opportunity, not just size • ZebethMedia

By zebethcontrolPosted on November 17, 2022Posted in Column, EC Column, pitch deck, Startups, Total Addressable Market, VentureNo Comments

Bill Reichert Contributor More posts by this contributor Interest Rates, Unicorns And What The Fed Means To Silicon Valley Every pitch deck needs to have a “Market” slide. Unfortunately, most entrepreneurs get the market slide wrong. That’s not necessarily their fault. The fault lies in the pitch coaching industry that insists that every deck include a slide with TAM, SAM and SOM. (total addressable market, serviceable addressable market, serviceable obtainable market or variations on these terms.) You can find templates for this slide all over the internet. Almost always, the template has three bubbles. Sometimes they appear side by side, like the porridge bowls of the three bears, and sometimes they are elegantly nested within one another, like a matryoshka doll. The mythical market size claim It’s amazing how this three-bubble market size slide has spread. It seems that everywhere I go on the planet, from Stockholm to Shenzhen, entrepreneurs are using a similar slide. Typically, entrepreneurs claim, “Our global TAM is $X billion, but we are going to start out in a certain part of the world, where our SAM is $Y billion. And we conservatively project that our SOM is $Z billion.” At times, they also show a very precise compound annual growth rate (“with a CAGR of 17.65%”) to demonstrate their analytical rigor. The typical market-size slide is obsolete. It’s clear why entrepreneurs try to pump up their market size. They’ve been told that venture capital investors are only interested in unicorns, and so they assume that the best way to become a unicorn is to go after the largest market possible. Presumably, the thinking is that it is easier to get 2% of a very large market than it is to get 20% of a smaller market. So, they earnestly search for market data that allow them to claim that their TAM is perhaps $56 billion, or $256 billion, or even better, $2.5 trillion. When this slide appears, most investors chuckle (or weep). Not only are the numbers always exaggerated, they are also irrelevant. Market size vs. market opportunity

My co-founder’s a green card applicant who just got laid off. Now what? • ZebethMedia

By zebethcontrolPosted on November 16, 2022Posted in Column, Dear Sophie, EC Column, Government & Policy, O-1A visa, Sophie Alcorn, Startups, tech layoffs, VentureNo Comments

Sophie Alcorn Contributor Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives. More posts by this contributor Dear Sophie: How can I stay in the US if I’ve been laid off? Dear Sophie: How can students work or launch a startup while maintaining their immigration status? Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies. “Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.” ZebethMedia+ members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off. Dear Sophie, My co-founder and I were both laid off from Big Tech last week, and it’s the kick we needed to go all-in on our startup. We’re both first-time founders, but my co-founder needs immigration sponsorship to maintain status with our startup. Do we look at an O-1A in the 60-day grace period? Thanks! — Newbie in Newark Dear Newbie, It’s been a crazy couple of weeks and we have more Big Tech (and startup) layoffs coming. We have lots of educational resources for what to do if you were laid off and you need non-immigrant visa sponsorship or a green card. As explained in last week’s article, there are ways for laid-off immigrants to seek additional time in the U.S. to make their next move. Apparently, almost 25% of laid-off tech workers start their own companies, but I am sure the number has historically been lower for international folks because the ball and chain of the U.S. immigration system can feel weighty. However, there are a lot of ways that you and your co-founder can take to successfully navigate the layoff, the grace period and sponsorship at the new startup. Here’s how: Deadlines and pathways The 60-day grace period is discretionary. We advise conservatively that the grace period begins from the date of termination, although some laid-off individuals will continue to get paychecks for many months. Many of the layoffs are public and WARN Act notices are issued, so the Department of Homeland Security is on notice. That said, if you need more time to set things up properly for your new startup to exist and sponsor your co-founder’s immigration, your co-founder can apply for a change of status to B visitor. As a B-1 business visitor, your co-founder can engage in certain activities legally, such as business formation and fundraising meetings, and request an additional six months of time beyond the 60-day grace period. This application process can run in parallel with immigration sponsorship by a new company. Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window) Sometimes, you can qualify to sponsor a co-founder for an H-1B transfer so they can work at your startup if you meet the requirements. Additionally, many individuals will use the runway provided by the six months of B-1 status to build their portfolio of accomplishments to qualify for an O-1A visa for extraordinary ability. The O-1 status is available to many professionals, including founders who can demonstrate they are at the top of their field. An O-1A is particularly advantageous for startup founders, because it can be sponsored by an agent for an itinerary of services, including advising other startups for equity, being a venture scout for a VC firm and getting paid as a contractor for speaking engagements in your field. Founders born in India or China are subject to the green card backlogs for individuals, and the O-1A can be a great stepping stone to qualify for and self-sponsor the faster EB-1A green card pathway. Incorporate For either an H-1B, TN, E-3 change of employer or a change of status to O-1A, you should be aware of the importance of setting up your company to successfully sponsor your co-founder and other hires for visas and green cards while also attracting funding from investors.

How to turn user data into your next pitch deck • ZebethMedia

By zebethcontrolPosted on November 16, 2022Posted in Column, EC Column, EC How To, fundraising tactics, pitch deck, Startups, VentureNo Comments

David K Smith Contributor David Smith is VP of data and analytics at TheVentureCity, a global early-stage venture fund investing in product-centric startups across the U.S., Europe, and Latin America. Of every 100 deals a VC firm considers, about a quarter get a meeting, and only one ends up securing investment. Given the downturn in the markets leading to a startup funding squeeze, getting through the door is a critical first step. But then what? How do you prove you’re that one in 100? Well, you have one drastically overlooked superpower: your data. Many early stage startups don’t have a data team or even a data expert. They’ve been told that it looks good to have cash flowing in and user numbers ticking up. But investors are looking past superficial metrics for indicators that your product is poised to grow years into the future. There’s no one metric for that, which is why you need to know exactly which ones to focus on, and what they tell others about your product’s growth prospects. If possible, collect the most granular, user-level data you can: events and transactions. Having this data allows you to X-Ray how people are interacting with your product. Visualizing and communicating this data can definitively power up a pitch deck. If you’re a founder of a new SaaS, fintech, marketplace, or consumer subscription product, here’s what you should be showing investors at the early stages of your journey. Investors need to see that you’re not being blindsided by easy wins that can go up in smoke within weeks, but are using hard data to build a sustainable company. At all stages: Focus on active usage, not vanity metrics If you haven’t been thinking about product-market fit, you don’t have a pitch. Now, that doesn’t mean you have to prove you have product-market fit, but you absolutely need to show investors that you’ve been working towards it. If investors can’t tell where you are in your lifecycle, they have no way of telling how close you are to getting real traction — and getting them their returns. Product-market fit isn’t a defined point. It’s more about reading the right signals: You have to know which metrics to look at and how to measure their strength. The stronger the signals related to user engagement and retention — all measured in different ways and all trending positively — the more evidence you have that you’ve reached, or are reaching, product-market fit. Building up all that evidence through data helps bolster a pitch and increases your odds of landing an investment.

5 sustainable best practices for bootstrapped startups • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in bootstrapping, Column, EC Column, EC How To, startup hiring, StartupsNo Comments

Marjorie Radlo-Zandi Contributor Marjorie Radlo-Zandi is an entrepreneur, board member, mentor to startups and angel investor who shows early-stage businesses how to build and successfully scale their businesses. More posts by this contributor You’ve sold your company. Now what? The art of the pivot: Work closely with investors to improve your odds No matter how successful your startup is, you’ll always need to pay bills and ensure healthy future cash flows. Times of plenty can lull you into thinking funds will always flow into your bank account, because that’s been your reality so far, but the cruel reality is that capital sources can dry up overnight with no warning. To weather uncertainty and maintain emotional equilibrium, it’s good to temper your exuberance and confidence with a dose of realism. One way to do this is through bootstrapping. Bootstrapping is a double-edged sword: Because you have little or no dependence on investors or stakeholders, you won’t give up much of your company in exchange for money, but the downside is that you have less money to invest in growth. There’s also a hybrid model that gets less attention and bears mentioning. An investment colleague of mine in the life science genomics space received $150,000 in angel funding. She later sold her business for hundreds of millions of dollars. She could pull off this extraordinarily successful exit because after the initial angel round, sales of her unique DNA sequencing and genomic services funded the business. With the success of her technology, she was able to rapidly scale the business within the U.S. If you decide bootstrapping is the best choice for your situation, you should first figure out if you’ll self-fund or seek small amounts from angels. Don’t be tempted to hop on a plane at a moment’s notice to meet potential customers in glamorous locations or for meetings in far-flung locations. These five key business strategies and principles will set you up for success: Pick team members wisely Establish your business model and go-to -market strategy to generate cash quickly Adopt a frugal mindset: always watch expenses and negotiate costs Be prepared to take on many roles, including those you feel are menial. Only outsource what’s absolutely essential, such as legal and accounting Pick your team wisely Your first employees are among the most important stakeholders in your business. It’s critical to select people who are invested in the mission and success of your business. They should want to work for a bootstrapped business, as not all will. Look for people who want to be part of the business rather than someone for whom it’s just another job. The right hires will indicate they want to be part of a sustainable business model. You should offer equity vesting over time as a key financial incentive. Because your team will earn this incentive over their tenure with the company, each individual will likely be even more invested in your business’ success. Select employees who can wear many hats, and seek out talent from diverse backgrounds to bring in varied perspectives. I built and ran a startup in food safety diagnostics that I sold to a multi-billion dollar S&P 500 company. We had people across ages, sexes, ethnic backgrounds, education, and geographies. This diversity was critical to our success, because we were doing business in 100 countries. It required us to have a deep understanding of the marketplace and cultural dynamics of each country.

4 moves your firm must make now • ZebethMedia

By zebethcontrolPosted on November 14, 2022Posted in Column, EC Column, EC Fintech, Fintech, fintech infrastructure, fintech software, fintech startup, StartupsNo Comments

Grant Easterbrook Contributor Grant Easterbrook is a fintech consultant based in Amsterdam. His work has been cited in the media over 150 times. He also co-founded Dream Forward, which was acquired in 2020. This year marks the 10th anniversary of the fintech phenomenon. Companies such as E*TRADE, Rocket Mortgage, and TurboTax began to disrupt the established financial services sector well before 2012, but that year marked the turning point when fintech morphed into a sustained movement that would drastically change how most people manage their money. If you’re a fintech startup, you will face four main types of competitors over the next decade: Traditional financial firms offering more of a “super app” experience with strong member benefits and perks; Advanced decentralized finance protocols that can offer financial products that involve real-world assets; Increasingly common embedded financial products sold by non-financial firms; A government-issued CBDC in many (but not all) countries. Your firm will need a very strong value proposition to compete with all four types of competitors. This leaves most firms with two options over the next decade. One avenue is to specialize in a handful of products or services that you believe will have value on their own that consumers will sign up for despite robust competitor ecosystems. Alternatively, you need to develop a comprehensive strategy to compete and build a compelling suite of products, services and perks. How can fintech startups prepare to compete in the next decade? Here are four steps you can take to remain competitive. Any corporate strategy document will remain a fantasy on paper if your tech infrastructure is outdated and incapable of meeting your future needs. Your tech stack must support fintech’s cutting edge The foundational step of any long-term strategy for the 2020s is to revamp your firm’s tech stack to support future needs. You will need modern tech infrastructure that can support greater cross-product automation, a sophisticated AI assistant, more integrations with external parties such as the crypto ecosystem, and non-financial perks/benefits. The process for improving your tech stack varies based on the type of firm. If you work for a large bank still running COBL, the first step is likely a massive investment in a multi-year process to migrate to a modern and streamlined tech infrastructure. If you are a relatively young fintech company, you generally have more “white space” to design your stack. The challenge for smaller companies isn’t dealing with decades of tech debt; rather, it’s optimizing limited engineering resources to build the best possible tech stack. Modernizing tech infrastructure is a difficult and expensive proposition. Generally speaking, the best way to get company leadership on board with such investments is to highlight what competitors are doing to help them understand the competitive threat.

A new playbook for startup fundraising • ZebethMedia

By zebethcontrolPosted on November 11, 2022Posted in Column, EC Column, fundraising tactics, revenue-based financing, startup financing, Startups, VentureNo Comments

Miguel Fernandez Contributor Miguel Fernandez is CEO and co-founder of Capchase, which provides non-dilutive financing to SaaS and comparable recurring-revenue companies. More posts by this contributor Use alternative financing to fuel VC-level growth without diluting ownership A few years ago, founders only had two options when starting a company — bootstrap yourself or turn to VC money, and they would use that money primarily to pursue growth. Later on, venture debt started to gain prominence. While non-dilutive, its problems are similar to that of VC equity: It takes time to secure, involves warrants, isn’t very flexible and not every startup can get it. But in recent years, more options have become available to founders. Most startups can now avail non-dilutive capital, and purpose-specific financing has entered the fray. While venture capital remains the most popular avenue for startups, founders should take advantage of all the financing options available to them. Using an optimal combination of capital sources means using cost-effective, short-term funding for imminent goals, and more expensive long-term money for activities with uncertain returns on the horizon. What is revenue-based financing? Let’s define it as capital provided based on future revenue. While venture capital remains the most popular avenue for startups, founders should take advantage of all the financing options available to them. So what is unique about revenue-based financing? Firstly, it is quick to raise. Compared with the months-long process usually involved with other forms of equity or debt financing, revenue-based financing can be set up in days or even hours. It is also flexible, meaning you don’t have to withdraw all the capital up front and choose to take it in chunks and deploy it over time. Revenue-based financing also scales as your credit availability increases. Usually, there’s only one simple fee with fixed monthly repayments. How should startups evolve their financing playbook? To optimize fundraising using different sources of capital, startups should think about aligning short- and long-term activities with short- and long-term sources of funds. Revenue-based financing is shorter term in nature, and a typical term ranges between 12 and 24 months. Venture capital and venture debt are longer-term capital sources, with a typical term of two to four years. A startup’s short-term activities may include marketing, sales, implementation and associated costs. If a startup knows its economics, CAC and LTV, it can predict how much revenue it will generate if it invests a certain amount in growth. Because the return on these activities may be higher than the cost of revenue-based financing, startups should use revenue-based financing to fund initiatives that will bear fruit soon.

Use IRS Code Section 1202 to sell your multi-million dollar startup tax-free • ZebethMedia

By zebethcontrolPosted on November 10, 2022Posted in Column, EC Column, EC How To, income tax, Startups, tax breaks, Tax law, VentureNo Comments

Vincent Aiello Contributor Spencer Fane attorney and business owner Vincent Aiello helps businesses solve legal problems to secure revenue flow and reduce business risks. Whoever said you can’t have your cake and eat it too should have called their accountants and lawyers first. These professionals often receive inquiries from founders, equity investment firms and venture capitalists looking for ways to save on or avoid capital gains taxes on future business sales. Both lawyers and accountants encourage clients to examine the tax savings offered by setting up a Qualified Small Business (QSB) C-Corporation at the initial business formation stage. Using a QSB can eliminate capital gains tax due on the future business sale if the company is established and stock issued pursuant to Internal Revenue Code Section 1202. Many startups often simply default to a robotic use of S-Corporations, partnerships, and LLCs, but savvy tech founders should consider the excellent long-term tax savings afforded by IRS Code Section 1202. This article provides a general overview concerning the major requirements and tax savings provided by forming a startup entity structured to maximize the capital gains tax exclusion in IRC 1202. IRC 1202 excludes capital gains tax realized on the sale of qualified small business stock (QSBS) of non-corporate taxpayers if the stock has been held for more than five years. QSBS is stock in a C-Corporation originally issued after August 10, 1993, and acquired by the taxpayer in exchange for money, property or as compensation for services. The corporation may not have gross assets in excess of $50 million in fair market value at the time the stock is issued. The IRC 1202 gain exclusion allows stockholders, founders, private equity and venture capitalists to claim a minimum $10 million federal income tax exclusion on capital gains for the sale of QSBS. Prior to 2010, only part of the capital gain on QSBS was excluded from taxable gain under section 1202 and the portion excluded from gain was an item of tax preference subject to alternative minimum tax. This rule was changed for stock acquired after September 27, 2010, and before January 1, 2015, such that the gain on such stock was fully excluded and no portion of the gain was an item of tax preference. This change was made permanent by the Protecting Americans from Tax Hikes Act of 2015, signed into law on December 18, 2015. Given the changes to IRC 1202, it constitutes a significant tax savings benefit for entrepreneurs and small business investors. However, the effect of the exclusion ultimately depends on when the stock was acquired, the trade or business being operated, and various other factors. Qualifying for Section 1202’s capital gains tax exclusion takes careful planning The critical plan to be determined at the outset is the future stock sale, which must be structured as a sale of QSBS for federal income tax purposes to achieve capital gains tax exclusion. This can be a challenge, as buyers typically prefer asset acquisitions permitting a step-up in basis and future goodwill amortization. In many business sales today, buyers expect stockholders to roll over a portion of their equity, or receive stock or membership interests in a new entity as part of the transaction. Imprecise planning will cause the QSB stockholders to forfeit the QSBS gain exclusion and owe tax on the sale. This can happen if there is an impermissible equity rollover to an LP, or receipt of LLC equity.

In times of crisis, fintech startups should take the long view instead of hibernating • ZebethMedia

By zebethcontrolPosted on November 10, 2022Posted in Column, EC Column, EC Fintech, Fintech, hiring, Startups, Verified Expert - lawyerNo Comments

Vadym Synegin Contributor Vadym Synegin is a Ukrainian impact entrepreneur, philanthropist and investor in fintech and crypto projects with more than 15 years’ experience as an entrepreneur in Europe and the UAE. More posts by this contributor 5 reasons why Ukraine’s fintech sector is growing despite war The fintech industry is currently facing several macroeconomic problems, including global economic inflation, skyrocketing costs of living, companies reducing their workforce, and a possible recession on the horizon, not to mention the war in Ukraine. All of these factors have caused fintech M&A exits to decline 30% in Q2 2022, the lowest point since Q3 2020. This is not the first time the economic climate has worsened so quickly. But when we look at the industry’s overall performance compared to previous years, the current downturn is not that different. What can founders do to help their companies prosper during this period? Hire high-performing talent The worsening financial climate is causing leading fintech companies to suspend hiring or reduce their workforce to avoid cost overruns. The industry saw 1,619 job cuts in May, compared to 440 in the first four months of the year. Personnel losses have also affected the Ukrainian startup ecosystem. More than one in ten startup employees in the country has had to leave their firms since the beginning of Russia’s invasion, and since then, the number of enterprises with up to five team members has risen, while companies with bigger teams are dwindling. Nearly every founder would agree that layoffs are a hard but necessary decision to make in times of crisis, as payroll spend can be redirected towards growth or maintaining a runway. But if you take the long view and look past the current downturn, it’s likely your startup will have higher chances of survival if you hold on to specialized talent. And sometimes, hiring a new employee can bring in a new perspective that may help you detect problems within your firm. Ukraine has a huge pool of talent, and thousands of specialists are currently searching for an exciting project to join. So instead of battening down the hatches as you face this crisis, consider it an opportunity to strengthen your company with dispersed, high-performing talent. Develop and prove the quality of your product Crises are also times of opportunities — you just need to look carefully to spot a golden egg. Crises give founders a chance to focus on building robust products since times like these usually highlight problems that are in need of a viable, long-term solution, and startups can go heads-down on building rather than focusing on incessant growth. The brutal truth is that tough markets also clean up the hundreds of startups without a solid product cluttering the market. This gives top companies a chance to develop an even more extensive set of products and services. Develop a solid strategy To run a business sustainably, founders must direct business development and manage risk well. That’s why during times of crisis, startups that have focused on developing solid business strategies and products usually emerge to win the market from those that didn’t. I know it’s hard to focus on developing a strategy when there are so many external factors affecting your company. But the fact is that companies that focus on strengthening their business plan and solidifying their strategy have a higher chance of bouncing back and coming out stronger than before compared to those who hibernate. Individuals and businesses thrive in the face of crises by managing their resources, analyzing the situation they’re in, and recognizing potential opportunities regardless of the amount of noise and chaos around them. Tough times allow teams that set big goals to recharge and look at things from a different angle. For instance, you might as yourself: What is the unique proposition of the product? What can we do to make the most out of the current market? What can we do to catapult our product even farther when the market recovers? Despite all the setbacks, founders can excel in business by following three rules during a crisis: strengthen your staff, develop a better product, and work to solidify a business strategy. While these aren’t laws or panaceas for all problems, I’ve found them to be very effective during rough times.