Top VC's and Angel Investor's Thoughts on Fighting COVID-19

Team StartupcityThe covid crisis has brought several winds of change in the startup ecosystem. This has also led to changing dynamics in investor sentiments, government policies and the overall regulatory atmosphere and has created big impact on businesses. With all these factors, the business scenario in the country is undergoing a tremendous paradigm shift, which is in turn affecting the economy.

Considering this, the current government, through a combination of pragmatic policy-making and execution focus, are accelerating the journey of startups and investors who are supporting startups.

Here are a few opinions of top investors on the current status of the country and business scenario:

1. Vikram Gupta of IvyCap Ventures says 3 measures to reduce impact of COVID19

We all are locked with different questions in mind, thinking about various scenarios that can evolve on a day to day basis.

This is the real testing time for startups, our success depends on how we respond to the current situation. Three things we should focus on

 Adapt the cost structure to ensure the cash burden comes down to lowest possible levels.
 Identify potential opportunities areas and adapt to products , services and facilities to support the fight against COVID 19.
 Keep the teams calm and focused to feel the need of working from home.

2. Arjun Seth of Indian Angel Network emphasizes

Founders & leadership need to take 100 per cent salary cut. The pay scales and other benefits have been higher than all employees you employ. This is the time to sacrifice and help other “junior” employees who are on hand to mouth. Don’t cut their pay!

3. Some facts tweeted by Shashank Randev of 100X.VC

 Around half the founders and nearly sixty percent of the investors show signs of worry in the present crisis.

 The major worry of founders seems to be declining revenue, cash blowout and handling the current crisis. Likewise, the top three areas of cost cutting are -- marketing, office and salaries.

 More than two-thirds of the founders feel that they should pivot their products -- either moderately or completely and a similar percentage feel that they should either slow down their hiring plans or freeze them.

 Around two-thirds of the founders surveyed were in the midst of their fundraising plans and half of them are not planning to make any alteration to their plans. However, more than half feel that the VCs have slowed down their response or are not responding.

 Around two-thirds of the investors stated that they will be shifting their investment strategy. One-fourth of the investors are planning to change their investment strategy significantly, while more than one-third are not planning any change.

 More than 70 percent of the investors responded that they are seeking lower valuations from founders and 86 percent of the investors will now look at industries which are positively impacted by the crisis.

 A large percentage (91 percent) of investors will delay their investments in early stage startups, adopting a “wait and watch” attitude, while only a miniscule number (7 percent) have stated that they will not invest at all.

 On their advice to founders for their fundraising plans, 43 percent of the investors felt that founders should delay them. While, interestingly enough, 17 percent felt that founders should get more aggressive and 31 percent felt there should not be any change.
4. Venkatesh Peddi Shared the idea of Chiratae Ventures that states

“We are all in solidarity in the fight against COVID19. The Indian startup community has come together to form - A 100crore fund, bring to life ideas with the potential to fight this pandemic.”

5. Vani Kola of Kalaari Capital says

 We understand the negative impact of our human footprint & lifestyle on other species & planet. Everyone feels compelled and called to action for a better coexistence. Perhaps, despite the cost of COVID19, it might help us grasp a movement towards sustainable lifestyles.

 People around the world have had different subjective experiences with the virus and there is a lot that is still not known. Hence, we should refrain from claiming to know the absolute truth and making snap decisions based on limited information.

 I always looked at life as glass half full and believe that every crisis is an opportunity. I'm in awe of entrepreneurs. They bring their passion, commitment, energy, & work really hard. I respect them for what they are doing at the frontline.

COVID19 is causing challenges for businesses across the globe. It is important now more than ever for effective cross-border collaborations.

6. Sajith Pai of Blume Ventures stated in a blog post

I work in an early stage venture fund. As the Covid-19 crisis took hold, we reached out to our portfolio to check on how the virus was impacting them. We saw an interesting pattern emerge. We understood Covid-19’s impact on businesses? It clearly favours most digital businesses, though not all, and it also favours some physical or atom businesses, including e-commerce or even hand sanitisers.

Given this, a simplistic digital vs physical or bits vs atoms framework isn’t a good lens to view Covid-19’s impact. Is there an alternative framework? Yes.

All businesses hit by Covid-19 have one factor in common: they bring people together in near proximity — such as travel hubs or airports, gyms, offline educational classes etc. Even if you are a purely digital firm, say online travel ticketing or a rideshare service, your customer will consume the service you are selling in proximity to another customer. And if there is hesitation to consume the product or service, then your sales take a hit too. Uber and Ola have seen rides drop over a third since the crisis.

7. Navrina Singh of AI Fund voices

It’s time like these that differentiate leadership driven by “values “ & that driven “only numbers”. In many cases COVID19 is being used as an excuse 4 layoffs in super well funded co, 4 not being able to invest in female founders & 4 not being able to keep marketing talent.

“We’re all necessary, and we can all contribute, to building. “ This pandemic has revealed that we have chased some wrong goals, rather than focusing on what’s needed for the betterment of humanity . Let’s change that !

8. Sanjoth Malhi of Matrix India shared some details from their webinar on How Companies Can Survive and Thrive

Focus on employees, over-communicate and walk the talk on employee safety. Give masks and sanitary kits to the blue-collared workforce, engage the corporate workforce with online training modules, organize regular town-halls to get employee buy-in for company-level initiative. It is the time of unprecedented consumer behaviour change. Speak to customers, anticipate changes and try and capitalize.

People are very receptive to new changes and the adoption of new habits in this time. Re-look and re-validate your PMF with the customers as well as look for products that might have better PMF right now.

The courageous minds and helping are making immense efforts to reach out to budding companies that are witnessing downfall at this stage. There are several webinars being conducted by these experts to make the startups pickup right strategies and build a stronger base for the future success