Startups seeking seed and Series A funding face the thinnest financial landscape in over 10 years and must now display metrics that exemplify a strategy that drives revenue and profit.

The pandemic has helped fuel an already strong funding environment that has kept startup valuations on an upward trajectory for many years, according to the Wall Street Journal. reported Thursday (July 21). The fear of missing out on the best deal has caused venture capitalists to rush into background research on new startups.

“The seed and Series A funding environment is the most challenging I have ever seen in my career to manage a fund,” said Jeff Morris Jr., who manages a crypto-focused seed fund called Chapter One, at the WSJ. “It will be painful in the short term.”

See also: To survive the funding drought, startups need to think like camels, not unicorns

For venture capitalists looking for a quick IPO and easy profits, the new reality is sobering, PYMNTS reported Wednesday (July 20). The current climate has venture capitalists offering less money for larger stakes.

Early-stage startups are now expected to show revenue and profit metrics, which was not a priority for investors looking for the hottest new startups, the WSJ reported.

As funding dries up, startups are also conserving cash and keeping a close eye on their balance sheets.

“In this climate, my state of mind has totally changed. It’s about making sales, making sales, making sales,” Anurupa Ganguly, CEO of Prisms of Reality Inc., told the WSJ. The startup is looking to raise a Series A round in the fall. “When things get tight, it forces founders to be much more rigorous.”

Read more: Economic sluggishness puts the M&A market back into value mode

The record number of initial public offerings (IPOs) and special purpose acquisition companies (SPACs) deals in 2020 and 2021 are peaking poorly for some of the pandemic’s hottest stocks, PYMNTS reported Thursday (July 21). Today, lofty valuations and done deals have given way to a more conservative and cautious approach.

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NEW PYMNTS SURVEY FINDS 3 IN 4 CONSUMERS HAVING HIGH DEMAND FOR SUPER APPS

About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.

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