This is the best time to get funding as a startup

Editor’s note: Jim Lanzon is CEO of Yahoo Finance’s parent company, Yahoo.

Yahoo CEO Jim Lanzone has overseen his share of online success stories in his nearly three-decade career. From steering the ship at Ask.com, to launching CBS Interactive, Lanzone has built his reputation around transformation stories.

However, he attributes his success to the early failures of Startup eTour, an online search and navigation company he co-founded in 1998 at the height of the internet boom.

“We went up and down,” Lanzon said in Top All Markets in Yahoo Finance (Video above), referring to the eTour crash during the dotcom bankruptcy. “We raised $50 million when that was a lot of money and it almost went public. When the market crashed, we crashed. It was heartbreaking.”

With fears of rising interest rates and a slowing economy roiling the tech sector once again, Lanzon draws parallels from his experience to send a message to today’s startups: reassess quickly, control costs, and raise capital quickly.

“This is the best time to get funding as a company,” Lanzon said, echoing comments from popular investor Bill Gurley, general partner at Benchmark. “If you look at each of those crash periods, that’s when some of the best companies were born.”

The volume of investment capital transactions It has decreased significantly this yearAs start-ups face increasing scrutiny over business fundamentals in the face of the global economic slowdown. The number of deals fell for the third consecutive quarter in the second quarter, down nearly 20% from the previous quarter, with the number of deals dropping to the lowest level since the last quarter of 2020, according to Pitchbook data.

But venture capitalists have also continued to raise money through funding rounds. In the United States alone, the accumulation of venture capital Approximately 300 billion dollars in dry powder formthat are waiting to be published. While this doesn’t necessarily guarantee enough capital to weather any downturn, Lanzon points to startups emerging from the recession: Uber (Uber) and Airbnb (ABNB), The WhatsApp (dead) and Pinterest (pins) is among the few companies founded at the height of the Great Recession.

“If you’re an existing company, you’ve gone through a boom and raised money during the valuations boom that’s been pretty rosy and you’ve done hiring and franchises for your company,” Lanzone said, “you really have to re-evaluate quickly.” Control these costs, and re-evaluate what you know, how you look at the market and your assessment.”

Lanzone, who joined Yahoo from Tinder a little over a year ago, added: “I think it’s the companies that adapt faster… that will succeed in that.”

Lanzone has seen the ups and downs of the technology cycle early in his career. A few years after he co-founded eTour, he saw the company’s value decline during the technology crash, which led to the acquisition of what was then AskJeeves.com, a search engine. There, Lanzone oversaw the transformation of a publicly traded company — and went from senior vice president of product management to CEO. He led the company’s rebranding to Ask.com. Lanzon followed this up by founding another company, Clicker. Two weeks after receiving funding in 2009, he said the market collapsed again.

As the current CEO of Yahoo, Lanzone is in the midst of another transformation story, although he’d prefer not to define it that way. With nearly 900 million monthly users across all Yahoo assets, and billions of dollars in revenue, Lanzone sees a real opportunity to strengthen the individual Yahoo brands, and eventually separate them.

This time, he says, he has the added benefit of engineering that prevents shareholder pressure.

“If you were to take an objective look at [all Yahoo] Asset, you could say is a great investment opportunity,” Lanzon said. (Now owned by Apollo Global Management.) This allows you to do the things you need to do, behind the scenes, to improve.”

Check out the full interview in the video above.

Akiko Fujita is a broadcaster and reporter at Yahoo Finance. Follow her on Twitter Tweet embed

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