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Weathering the Market Selloff These few suggestions will help weather the leanest of times.

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We go to press at a time when the capital markets are again volatile and depending on when you are reading this article, your ability to grow your business may be affected by market factors beyond your direct control. So what's a brilliant entrepreneur like you supposed to do?

We have a few general suggestions for founders given our many decades of experience working with startup businesses in many different industries and geographies.

Raise capital as if this round is your last.

A choppy market highlights the importance of assuming that your most recent round of fundraising will be your last. Everyone delights in ambitious growth plans and, when well-executed, there is nothing more fun to watch. But budgets and operating plans must prepare for the need to be cash flow positive from operations in case the capital markets are shut (and shut for an extended period of time). Someone from the senior management team or board may be selected to play the tough role of devil's advocate.

Related: How the Global Stock Market Selloff Will Affect Crowdfunding

Always be ready.

Good housekeeping is advisable throughout the life of a company, and especially in challenging economic times. CEOs hunker down and focus on sales, new products, recruiting and other key business matters. But we submit it is equally important, and not time-consuming when done as part of routine maintenance, to keep your legal house in proper order.

Mistakes crop up mostly through inattention. Your checklist will need to be customized but think about the following. Ensure that your business is using the correct corporate form (C corp., LLC, partnership); key documentation is executed and in the proper entity name (not a founder's name); and both your company's intellectual property and the arrangements governing your use of everyone else's intellectual property are current and appropriate. Update and check your cap table to ensure that it is correct. Resolve any lingering disputes. Complete blank forms.

Related: Raising Capital Through Regulation A+? You Still Need to Market Your Socks Off

Pick great partners.

We see, consistently over time, businesses that survive bear markets because leadership has been surrounded by great internal senior teams, employees, boards, patient investors and outside professionals. And, conversely, we see great opportunities sabotaged when human capital is poorly functioning. We stress the need for supportive and supporting partners who will help connect to customers and other third parties (whether your business is B2B, B2C, or a hybrid). Think carefully through your selection process when times are good and, in this context, past behavior by your potential partners (good and bad) frequently reveals what their future behavior will be during stressful times.

Always look to combine.

We know you intend to remain independent forever, grow a great durable business and leave your mark on history. But, regardless of market conditions, we think it is prudent to be aware of and open to M&A activity. In any market, bear or bull, you should scan the horizon for new partners and collaborators. In the same way that companies keep their eyes open for strong talent even when they are not hiring, it is sensible to be apprised of activity in your sector and open to prospects which might present themselves. Private companies should generally resist, in bear markets, putting out the "For Sale" sign but, instead, should think about how to partner or joint venture.

Occasionally your ability to showcase your strength leads to a sale of the company but it is from a position of cooperation and, in that regard, you can humbly point out areas of your own company's weakness and your new business partner's complementary strengths.

Management matters.

You had a great vision for a business. You did everything right (and did your best to have a financial cushion). But something has gone wrong and you are running out of cash, without time or the ability to raise fresh funds. Now what? Well, even in a bear market, angel investors and venture capital and private equity firms, make decisions based in part on the team running the company (and investors expect multiple pivots in your business).

We routinely continue and expect to see smaller companies bought to acquire talent. In tough times, you must do your best to show grit, hold firm and evidence your strengths as a team by continuing to make smart and measured choices -- chief among which is not selling at the wrong price. By remaining calm and focusing on what matters most to the long-term success of the enterprise, you put yourself in the best possible position to survive. And, if not this time, then for your next venture.

Related: Is It Ever OK for Founders to Sell Off Their Company Shares?

Get match ready.

Even if times are now tough, the sun will come out again. We always see strong businesses taking advantage of the lull between bull markets. Operationally, tougher times give rise to chances to trim fat -- reevaluate your real estate and relocate to better value space. It's a good time to look back at hiring during the preceding period of rapid growth and select the talent that's best suited to move forward -- there is an opportunity to garnish real loyalty from employees who are kept on and to shed excess without negative public relations implications. The lull may permit you to tidy contractual arrangements, IP and corporate governance matters for agreed-upon flat fees. The work done in this period can make your venture both more efficient and more attractive for the future.

Lead the market.

So enough with the negativity. Even (perhaps especially) during difficult economic times, many businesses choose to buy rather than build. Having picked the right partners (see above), you may be able to act upon your "market map" and grow your business. Great companies get funded, even if valuations are disappointing in the short term and you should continue to be aggressive. As in all difficult situations, opportunity abounds.

Murray Indick is co-chair of Morrison & Foerster’s Emerging Companies and Venture Capital practice, where he works intensively with early-stage businesses as they seek growth capital, and develop their business plans, holistically addressing the key needs of the business for the founders and investors. Lara Alice Pender is an associate in the Emerging Companies and Venture Capital practice in Morrison & Foerster’s San Francisco office, where she focuses her practice on emerging company equity financings and later stage mergers and acquisitions.

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