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From Unicorns to Centaurs: Risk Management in New Startup Era

Read the full white paper here:

After 2022, there's no doubt that startup funding has changed. Corporate Venture Capital reached a 5 year low in Q1 2023, as reported by CBInsights

To help us wrap our heads around all the changes we are seeing, we recommend the white paper "Welcome to the Age of Centaurs" from Money 20/20 to our entire community. It provides insight into the shift and how it is affecting the tech industry. 

For professionals in risk management, trust & safety, compliance & regulatory, and legal strategies the subject matter is valuable in the following ways:

Risk Management Insights

The article underlines the changing dynamics in startup finance, highlighting the shift from valuation to revenue sustainability. As marketplace participants, these insights can help you better gauge the financial health and long-term viability of startups on your platform, leading to more accurate risk management decisions.

Trust and Safety

The emphasis on revenue growth over mere company valuation can impact your platform's trust and safety guidelines. Companies that prioritize steady revenue and profitability may be perceived as safer and more trustworthy to your platform users.

Awareness of Industry Trends

The article offers valuable observations on changes in startup culture and investment strategies, keeping you informed about broader industry trends. This knowledge calls for proactive risk management and may inspire the development of new safety features tailored to these evolving needs.

Compliance and Regulatory Considerations

Understanding a company's financial strategy can aid in predicting potential regulatory issues. For instance, startups focusing on rapid revenue growth might heavily invest in sales and marketing, potentially leading to compliance issues around insurance. Conversely, startups relying heavily on external funding may face greater risks of investor lawsuits, posing potential regulatory concerns.

Legal Strategy Development

For legal teams within digital platforms and marketplaces, this article emphasizes the importance of aligning legal strategies with the company's overall business model. If a startup on your platform is shifting its focus from valuation to revenue, your legal approach and guidelines might need to adapt accordingly.

In essence, the insights provided in this article is helpful for understanding, predicting, and managing the risks associated with startups in today's evolving financial landscape. This will facilitate the building of safer, more reliable, and compliant digital platforms and marketplaces.

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