Inflation. Interest rates. A lack of capital for businesses. Layoffs across the tech industry. All of these factors continue to impact both venture-backed and bootstrapped companies.

In 2024, we’re seeing more businesses adopting a defensive posture out of necessity. And while the U.S. economy is finding a balancing act between growth and taming inflation, many companies have been more focused on bottom-line profitability versus future growth, which especially in the technology realm is a very different path from historical norms.

This environment has translated into laid-off workers feeling a sense of doom as tech companies scramble to lower cash burn rates. Essentially, many venture-backed companies are being forced to grow into their lofty valuations by behaving as bootstrapped companies.

My take? This shift represents a healthy return to fundamentals.

Celebrating the success of securing venture capital funding is a milestone worth recognizing and promoting, but it means that a company is now “on the clock.” They must hit certain growth milestones and prove there is sustainable demand for the product, or the clock will run out and investors will not double down.

Rather than being beholden to venture capital to keep a company alive, I think it’s better to take a bootstrapping mindset (or actually bootstrap) to showcase the true fiscal health of a company. If you can create a business model that is immediately profitable, focus on scaling it slowly and in a way that bolsters cash reserves.

Ironically, while Treble has developed strong relationships with the venture capital community, we have been bootstrapped and profitable since inception. Taking investor money is a very serious responsibility—and while growth is paramount—zero growth can happen if the business is no longer in operation.

Below are three tips to ensure long-term viability and build cash reserves that could apply to a venture-backed startup or a solo entrepreneur aiming to bootstrap.

Go On Offense In A Defensive Market

With the valuations of later-stage companies being questioned by their subsequent performance in the public markets, this has trickled down and put significant pressure on venture-backed startups and enterprises. These companies must now adopt a more defensive posture, focusing on immediate demand generation and cash preservation. And subsequently, this has had a serious economic impact on companies offering services to these organizations. From advertising to sales teams to public relations, companies have trimmed across the board.

However, in this type of market, companies that take the opportunity to go on offense in terms of brand building have the potential to carve out a much greater market share. Identify strategic advertising and sponsorship opportunities in key industry publications or events. Negotiate with the vendors to create longer-term partnerships. The best defense is a good offense, and revenue derived from this targeted spending will be critical to ensure continuous business operations in an economic downturn.

Maintain Optionality By Lowering The Burn Rate Earlier

It seems as though the loyalty between employers and employees is at an all-time low. Part of employees’ frustration is that layoffs often happen with minimal notice, or worse, on the heels of raising additional capital. Business leaders must recognize, however, that optionality is everything. It is much better to have a clear understanding of your cash runway and to make tough, yet necessary decisions to keep your best talent and ensure the continuity of the company. Because if you don’t get this right, the entire company could go under.

Employees will not necessarily empathize with the financial success of the company in the wake of a streamlining of the workforce, but this is a much better scenario than businesses that mishandle cash flow and leave employees with no paycheck and no job. Cash flow optionality is everything, and businesses should aim to mitigate all costs that don’t return revenue, from expensive meals to office leases.

Prioritize Recurring Revenue Over Short-Term Profitability

Pricing power works both ways. When demand for your service or product is high, you can likely command a premium. When all businesses are cutting spending, or boards of directors are mandating lower spending, profitability means less than recurring revenue. In the marketing realm, for example, companies now demand more ROI for less budget than in pre-pandemic times. Per Ewan McIntyre in the Harvard Business Review article I linked to above, “Enterprises have pivoted from a period of concentrated investment in the tools and capabilities that support digitally led growth to an era when these investments need to start paying back.”

The ability to be flexible with pricing is paramount when cash flow is the key factor of consideration. In my business’s current stage, winning two or three accounts can have a substantial impact on top-line revenue and cash flow. Even if those accounts are not the most profitable, they enable us to get to a point of economic sustainability and give us the ability to negotiate future contract negotiations on more favorable terms. It’s a long-term, flexible mindset versus a short-term, fixed mindset. Better yet, wins create more wins, and the network effect of doing great work for those customers you signed because you were flexible will create recurring revenue that sets the business up to win.

If and when interest rates fall later this year and venture capital funds start to flow more freely, I’d advise startups to take the perspective of a bootstrapped business. The fun part about creating recurring cash flow and a profitable business from the jump is that it turns the tables on the investors: They want to be a part of your successful and growing enterprise versus you depending on them for survival.

Bootstrapping is the ultimate long game, and those with the mindset of creating a sustainable and profitable business will be the winners.

(This column originally appeared at Forbes.)