Investors who ‘oppose’ COVID-19 crisis
The ongoing pandemic crisis is a shock for our economy. Startups were particularly severely hit by the market turbulences and ongoing governmental restrictions. In a lot of countries governmental rescue mechanisms do not consider startups in particular – we say, it is playing with fire leaving them all on their own or even to abandon them. France has done the best job so far when they introduced their EUR 4.3b plan to support startups, followed by Germany with a number of different programs for the vibrant startup ecosystems of Berlin, Munich and Hamburg. A lot of investors – in particular Business Angels – have trouble saving their main (family) business and focus currently on helping their portfolio companies.
Most venture funds have reacted the same way. Nevertheless, there are quite a few investors who are still investing. You may expect them to be as selective as they were before and – beware – some of them might look for bargain deals during the crisis. A recently published crowd-sourced list (still work in progress) or a list by Techstars show all investors, who are still investing.
BUT STAY CALM! Even if you desperately need funding, make sure you do not just contact hundreds of funds in an act of desperation – just because you found a list! Stay calm and think rational! Make sure you get proper introductions to the investors who make the most sense for your business. Read the investment criteria carefully before you reach out to investors. Pitching online is also quite different – we recommend to check out this free tutorial video to improve you skills.
DON’T BE BOLD. It is a deep crisis and you should hit the breaks if you face uncertainty. Cut your burn-rate, extend your run-way. Down-rounds might be the result and a long fundraising winter might be the mid- to long-term reality of this crisis. Come up with a survival strategy and have it ready, when talking to investors. VentureBeat nailed this in a recent article – we highly recommend to read this one.
We highly recommend to apply at 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 supports the club in selection of startups alongside partners of KPMG Austria. Members range from Family Offices, High-Net-Worth Private Individuals to Corporate Venture Capital Funds – a network of thousands of potential investors.
If you need any assistance – don’t hesitate to reach out to us. We support startups in fundraising day-in and day-out – 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 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.