The gap between the president-elect’s claims and market expectations may offer temporary reprieve, but small businesses should prepare for turbulence.

A stark reality check looms for America’s 33 million small businesses: While campaign promises suggest dramatic economic shifts, market indicators tell a different story. This disconnect—between political rhetoric and market expectations—creates both uncertainty and opportunity for SMBs, which represent 43.5% of U.S. GDP and employ nearly half of private-sector workers. 

In 2018, I'm tens of thousands of dollars in credit card debt, frantically trying to get Percent off the ground. Fast-forward to 2022, and we're staring at a bank account with barely anything left and a $350,000 payroll looming in just days. Yet by 2023, we closed an oversubscribed series B round, found our product-market fit and saw our marketplace take flight. This roller-coaster ride is not an unfamiliar story.

Private credit has rapidly expanded beyond its Wall Street niche, drawing in everyone from seasoned titans to wide-eyed Main Street investors. However, the sector’s meteoric rise hasn’t gone unnoticed by the establishment. Jamie Dimon, JP Morgan Chase’s CEO and Wall Street’s perennial voice of caution, recently sounded the alarm on private credit’s potential default risks, making headlines in the process.

Anchored by high yields, shorter-term investments, and being newly open to all accredited investors, the rise of private credit is still climbing. Doubling in size as an asset class over the past 5 years, private credit assets are expected to hit $2.3 trillion by 2027. Booms like this almost always pose questions: Is this sustainable growth?

We often compare founding a company to raising a child. There's pride, a refusal to admit we don’t know everything from the start and a whole lot of growth—not just for the company but for us as founders.

The founder journey is fraught with challenges, primarily because a founder’s role evolves out of necessity as the company matures. From bootstrapping an idea to a successful exit, founders constantly adapt their focus and apply their skills—both technical and emotional—to meet the company’s needs at each phase.

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.

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.