A bunch of startups might be in better shape than you think

Earlier today, TechCrunch+ published an open letter to startups from Index Ventures partner Mike Volpi with advice for startups that have different levels of runway. In short, the more cash that a startup has, the more latitude it will have to be aggressive in the present downturn and the looming recession.

We caught up with Volpi last week to talk through his perspective on the market, the disconnect between venture performance and startup operating results, and what portion of startups might be in reasonable shape to attract capital and grow despite a risk-off investing environment.

Check out Volpi’s full note here, and read on for our founder-focused takeaways from our chat with the investor.

Cash rules everything

One claim stood out the most in the investor letter: “Many companies are still hitting or exceeding operating plans.” Given that we’ve seen mixed results in the public market, that statement was a bit surprising.

We asked Volpi how many startups were hitting their plans, and while the investor was hesitant to put too fine an approximation on a venture market that he has limited visibility into, he did estimate that around 75% of startups are hitting — or exceeding — their plans.

Startup operating plans vary in their level of aggression, so the “around 75%” figure may not be as bullish as it reads, but that’s immaterial. What matters is that most startups are still able to sell their goods and services, and we are not seeing the kind of deceleration in startup growth that the public markets might lead us to expect.

More simply, startups are still able to sell in the current market even as asset prices fall.

If that’s the case, what should we make of the steady drumbeat of doom and gloom from investors on Twitter and elsewhere?