Not long ago, a rapidly growing startup needed financing. Traditional banks hesitated, bound by stricter regulations. Enter private credit: a bespoke loan structured to match their growth trajectory was secured within weeks. Private credit innovations like this aren't just stopgaps—they’re fueling tomorrow's business.

A convergence of forces, including bank consolidation, post-crisis regulations, and yield-hungry investors seeking innovation, brought forth the rapid ascent of private credit. It’s no surprise that this sector is expected to surpass $2 trillion by 2027. Investors are drawn to private credit for its unique advantages: the potential for higher yields than traditional fixed-income products, enhanced portfolio diversification, and the flexibility of short- to mid-term deals. Platforms like Percent are helping private credit scale, offering accredited investors access to previously unattainable opportunities in a streamlined, data-driven environment.

As we revert back to the mean from an unprecedented fundraising environment and recover from the whiplash of going from frothy markets with inflated multiples to frozen IPOs and increased rates, there’s a lot to consider in the world of fundraising.

The first step is realizing that the post-pandemic fundraising environment that inflated returns and involved little to no due diligence isn’t coming back. This 'new normal' is a regression back to what fundraising has been for years—a return to the basics of raising venture capital. So, what does it take to re-adapt?

In the past few years, we’ve seen a venture market like no other. A short-term blip of capital constraints and a new normal of working remotely for startups during a global pandemic gave way to a market of fundraising excess, the likes of which we have never seen before. Disrupting the norm, this was a time when money was cheap and multiples were high—it seemed like there was no limit to the rising valuations. In fact, according to Statista, the value of venture capital funds raised in the U.S. rose from $89.4 billion in 2020 to over $155 million in 2021.

Starting a company as a non-technical founder means doing it all. Out of necessity, you’re covering everything from fundraising to management of the profit and loss, all things product from design to user experience, plus marketing and more—because at the early stages, it’s just you.

The founder journey is a marathon not a sprint and while everyone talks about the physical toll starting a company takes on you, it's the emotional toll that is just as intense. Before Percent, I had built a consulting company called Lumenary and was fortunate enough to have Michael Cline, chairman of Accretive, as one of my clients and mentors. Working with him was an eye-opening experience that continues to shape how I view the founder journey today and why it is that we do what we do.

Being a startup founder comes with a lot of challenges. Most founders know that starting won't be easy, but few of them are prepared that it will take much longer to get off the ground than anticipated. What's more, the product idea they begin with often won't be close to the product that eventually finds product market fit.

It's been a volatile time in markets. The combination of inflation, supply chain woes and geopolitical events have made it difficult to predict where capital markets or even the broader economy are headed. Despite these challenges, private markets and private credit in particular have held up well. In fact, according to Pitchbook, the industry’s AUM could grow to $16.1 trillion by 2027.