Investors detail their red (and green) flags for startups seeking venture dollars

Amid economic uncertainty, founders should know what makes VCs skittish

The past few months have hit the startup community where it hurts — the balance sheet. With inflation rates at record highs, a recession on the horizon and threats of a long winter by venture capital giants like SoftBank, VC money is becoming harder to come by. So where does that leave startups relying on that cash to reach their next levels of operations?

TechCrunch sat down with investors who cover a range of growth stages and industry sectors, with a bent toward mobility and climate tech, to hear how they’re looking at the funding environment today and what their red flags — and green flags — are for startups looking to raise another round.

Most of the investors we spoke to said there is definitely a pullback and general conservatism in funding, with many VCs being a lot more deliberate in their due diligence.

“There is no doubt that investors — especially later-stage investors — are largely sitting on their hands, using this new luxury of taking their sweet time and picking carefully,” Nate Jaret, general partner at Maniv Mobility, told TechCrunch. “The fundamentals of venture investing have not changed, only the pace.”