Success in entrepreneurship can be elusive. European startups, in particular, have fallen behind startup hubs across the pond like Silicon Valley or in various Asian cities like Tokyo and Seoul. However, the scales are starting to shift as European startup founders are beginning to drive up investments and support. Starting in 2019, European startups have earned over Beyond gaining financial investment capital, it will take resiliency, adaptability, and awareness on the part of the founder/s, who must also implement cost-effective ways to grow their startup.
Startup Investment During the Pandemic
Updated: March 15, 2021
The ongoing COVID-19 crisis has been a shock for our economy. Startups have been hit particularly hard by market turbulences and ongoing governmental restrictions. In many countries, government rescue schemes and packages have completely ignored startups.
But enough with the bad news. Contrary to what you might expect, the pandemic has not defeated dealflow! According to Atomico’s highly respected State of European Tech report for 2020, published in December, venture capital has continued to pour into the region.
- Seed rounds are growing in size with an increased number of $100m+ deals, and the continent was on track for another record year of investment at over $41bn.
- In March 2021, Hopin (which has seen huge demand for its software during the COVID-19 pandemic) has officially become the fastest-growing European startup ever, in terms of the time it has taken to reach a $5bn valuation.
The investment picture also looks good in North America, despite a politically, socially and economically turbulent year in the United States.
In every crisis lies opportunity – just ask Zoom! – and investors know this very well.
So there’s still every reason to be positive as a startup founder. But just because there’s money out there doesn’t mean raising funds just got easy!
How to approach investors in a time of crisis
Although the broader investment landscape remains better than many had hoped, it’s nonetheless true that investors are being more cautious than usual.
Some investors – business angels in particular – are focused on keeping their existing commitments afloat. All they’re doing is looking after their portfolio companies. And many venture funds have reacted the same way.
But as we’ve seen, plenty are still open for business. One thing to be aware of is that some of them might look for ‘bargain deals’ during the crisis.
It’s important to stay calm in all your decision-making. Even if you desperately need funding, don’t just contact hundreds of funds. Remain rational. Make sure you target proper introductions to the investors who make the most sense for your business. Read investment criteria carefully before you reach out to investors.
Pitching online is also quite different from pitching in person – we recommend watching this free tutorial video to improve your skills.
EXTEND YOUR RUNWAY
Also, remember that this is not the time to be overly aggressive. This is a serious crisis and you should hit the brakes if you face uncertainty. Cut your burn rate, extend your runway. Down-rounds might be inevitable and the mid-/long-term reality of this crisis could be a long fundraising winter. Keep an eye on the valuation impact of your decision, with tools like DealMatrix.
Come up with a survival strategy and be ready to explain it to investors – as well as answer their challenge. VentureBeat covered the big questions you need to ask yourself in this article written at the very start of the crisis – the advice in it still holds.
We highly recommend applying to the European Super Angels Club – Europe’s leading investors’ network – if your company is within the investment scope of the club. Venionaire Capital’s analyst and transaction team support the club with startup selection – in partnership with KPMG Austria. Members range from family firms and high-net-worth private individuals to corporate venture capital funds. The network includes thousands of potential investors who are open to investing during the pandemic.
If you need any assistance – don’t hesitate to reach out to us. We support startups in fundraising on a daily basis. Who knows, maybe we have a fit and we can leverage your efforts to raise a successful round.
About the author: Berthold Baurek-Karlic is the Founder and CEO of Venionaire Capital, with many years of experience as a serial entrepreneur, corporate finance expert, and early-stage investor. He supports the startup ecosystem in various roles such as President of the European Super Angels Club, Board of Austrian Private Equity and Venture Capital Association, and General Secretary of Business Angel Institute.
In light of the vast economic changes in the European venture capital market as a result of the COVID-19, we started to monitor the venture sentiment more closely and highlight important findings in an aggregate index on the European level. In today’s article we take a closer look at CEE.
How is the startup community and investors doing in the midst of the Covid-19 crisis? It’s been a rather stormy ride for many over the last half-a-year and it’s far from calming down. Read on for Berthold Baurek-Karlic’s opinion, CEO of Venionare Capital, from an investor’s perspective.
Private equity (PE) funds, the larger cousins of venture capital funds, typically invest in more mature companies. In this article, we will look into the past, present and future of private equity strategies. The evolution of private equity is driven by accidentally discovered effects that our team of experts and analysts identified recently.
Our M&A team led a lighthouse M&A transaction for Blockpit, the Austrian expert for legally compliant reporting for digital asset trading to acquire its German competitor CryptoTax. With this acquisition of its biggest and larger European competitor, the company intends to drive international expansion into the US and other markets globally in 2021.
We are proud to have closed the following deals during the last weeks: Health-Tech pioneer myBioma has secured a six-figure investment from renowned investors, which was also doubled by the COVID-19 relief fund of the Austrian Promotional Bank (Die Austria Wirtschaftsservice Gesellschaft mbH – AWS) and also the award-winning RegTech platform for Business KYC (KYB), kompany has secured a follow-up funding of €6 million, which was their largest single investment round to date.
Health-tech pioneer myBioma has raised a six-figure follow-up investment from renowned investors, which is to be doubled by the COVID-19 relief fund of the AWS. The next step is for the founders to draw international attention to themselves.
Venionaire Capital enters new strategic partnership with startup300 AG in the new Dealmatrix, offering startup valuation calculator after a pivot. Beta users will foreseeably be able to use the new service from August onwards.
Venionaire Capital founder and managing partner Berthold Baurek-Karlic and co-autor Florian Kandler, announced a new book project “100 Startups – Made in Austria” today in Austria’s leading startup portal derbrutkasten. Future hidden champions, from deep-tech to digital competitors, will be featured through interviews. The book itself will be promoted globally, sent to selected VCs all over Europe and available in stores internationally. The startup community itself will choose from a list of around 200 start-ups which 100 Startups will be invited to appear in the book.
Why 100 Startups – Made in Austria?
The idea for “100 Startups – Made in Austria”, was developed together with the publishing house Home Town Media – Metropole. It is, to a certain extent, an English language continuation of Bertholds earlier book project “Erfolgsgründer – Made in Austria“. The structure of the book will be different and should become even more interesting for the reader. The aim is to generate more international attention to the rising startup ecosystem in Austria. “Our new book is based on the approximately 6-year-old book project “Erfolgsgründer – Made in Austria” (Fabian Greiler, Helmut Pöllinger and Berthold Baurek-Karlic). However, it will be an evolution. This time the community itself will decide who will be invited for an interview in the book. Together with Florian Kandler, we have developed a few so-called growth hacks, which should give the start-ups a lot of reach and media attention in addition to the book itself,” explains Berthold Baurek-Karlic, co-author and initiator of the book.
Austrias start-up ecosystem has developed strongly in the last years. Despite difficult conditions, more and more innovative entrepreneurs and investors have found each other who wanted to change something. First international successes were important as confirmation of this path. In the meantime, we regularly read about international stars who invest in domestic start-ups. The Austrian Startup Monitor 2019 provided figures on how large the economic factor of start-ups has become. Since 2008, 2,200 start-ups have been founded, of which 9 out of 10 employees have grown and have continuously created new jobs. In total, around 17,500 people work in Austrian start-ups. Start-ups were financed to 52% with growth capital. It is remarkable that 90% of the start-ups had already generated revenues abroad by the end of 2019 and thus carry the DNA of possible future hidden champions.
Vote for your favourite startups
On the book’s landing page you can vote for your favourite startups as of today. Voting is possible once a day. The founders will also receive a few e-mails from the authors, where they can get more information about the further course of the project.
Serial entrepreneur, Florian Kandler is co-author of the book. His statement “Successful companies often do not even know how much their history has an indirect influence on our economy. Every time they share their knowledge and story with young entrepreneurs and the community, something happens in the minds of the audience. It is stories that bring people to entrepreneurship and knowledge that helps the next generation of entrepreneurs on their entrepreneurial path” underlines the importance of this project to him. While living in Silicon Valley in 2011, Florian learned how valuable it is when experienced entrepreneurs share knowledge with another. Since then, he has been promoting the #PayItForward mindset and is setting a good example himself, ever since. His podcast “Gründer und Zünder”, the Austrian Startup Monitor, and his book “Business Angels vs. Business Devils” made him famous across the country.
Margaret Childs, has been very active in the startup scene for years. She was the perfect publisher for this book. As founder of the magazine and the associated online platform “Metropole”, she looks behind the scenes of Austrias capital city including the startup ecosystem as a member of the board of the think tank Austrian Startups. Her readers include an international community, expats. Corporate publishing has become an essential part of her business alongside the magazine, which is why she initiated the book project by Florian Kandler and Berthold Baurek-Karlic.