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Many startup founders in 2022 had to scramble to find new ways of funding their projects when the VCs suddenly stopped throwing money at them en masse. This has meant that startups have had to get creative in order to continue operations. As a result, many startups are looking for partners who can help them develop software in order to stick around until the next round of funding kicks off. Nearshoring in Latin America may be the best option to expand your burn rate.
Why did VCs shut down the tap?
The year 2022 has been a tumultuous time for the global economy. The U.S., EU and China were all printing money at an irresponsible pace, which led to inflation that reached levels we havent seen for more than 40 years . As a result of this inflation, valuations of tech companies and startups dropped significantly—and VCs stopped investing as much money into them as they used to do so in previous years.
In fact, many VCs decided that now would be the best time to focus on profitability instead of blitzcaling (which is what most Silicon Valley startups had been doing for years). This meant that fewer companies were able to raise funds from venture capitalists or private equity firms because they weren’t profitable enough yet—and so they had no choice but making drastic changes in order keep themselves afloat while waiting until conditions improved again within another 2 or 3 years
What does this mean for startup founders?
While this is a challenging time for startups, it’s also an opportunity for them to evolve and become leaner. One way startups can do this is by optimizing costs. LPs are pushing VCs to “lean up” their portfolios.
If you’re looking to save money while still remaining competitive in today’s marketplace, nearshore software development may be the answer. Nearshore development offers many benefits including savings on labor costs — You can hire talent at lower rates than those available in Silicon Valley; therefore saving you money while still retaining talented developers who will help your startup grow into the next unicorn company!
Nearshore software development
Nearshore software development is a way to optimize costs, time, quality, speed and flexibility. This means that nearshore software development allows you to get your product out faster because you don’t have the time zone issues associated with collaborating with teams in Eastern Europe or India. Nearshore software development helps with quality with tighter collaboration, communication and a faster software development lifecycle.
Finding nearshore software development partners
While cost optimization is a great benefit, you should not only focus on this aspect. Finding the right software development partner is critical to your success. Here are some things to consider when looking for one:
- Choose a partner that’s a good cultural fit. You’ll want to work with someone who understands your business and its goals, so look for someone who shares those values. The software development process should be collaborative in nature and include team members from both companies involved in the project.
- Choose a partner that has experience working with startups like yours. If you’re hoping for rapid growth, you need developers who can keep up with your fast pace without losing focus on quality or security standards. This kind of experience is especially important when it comes time for scaling up operations for increased capacity needs as well as working through any bugs or issues that might come up along the way (and there will be plenty).
- Find out what references they have from past clients who were satisfied with their work product—it’s always nice knowing that other people have had positive experiences working together!
Conclusion
While the pandemic, the war on Ukraine, supply chain issues and inflation continue to wreak havoc on the economy, many companies are looking for ways to stay afloat. One way is by taking advantage of nearshore software development services. Let´s talk if you want to learn how to find the best partner.
