Launching a startup: post-Covid era edition

By Denise De Gaetano

A look at history shows us that crises are opportune times for new ideas, innovations and systems.

Some of the most famous companies today were launched right after the 2008 economic crisis: WhatsApp, Uber, Groupon, Slack, AirBnb, Groupon and more.

This economic crisis due to the coronavirus pandemic may seem challenging and terrifying, but the current environment can be an ambitious time for young entrepreneurs to launch their dream startup.

Presenting an idea and raising capital for your startup might be more difficult than before, but understanding the market and consumer needs (as well as your adaptability during a crisis) can help you stay in the game.

Here are some practical tips, for both existing startups and new startups who are planning to raise money in the next six or 12 months:

Be brutally honest – what makes sense now? Ask yourself: Have recent global events changed the relevance of my product and proposition? Does my idea still meet the same needs as before? Does the offer need to be updated according to the new reality? Are there any changes or adjustments to be made to the product, offer, technology, pricing, distribution channels or geographic areas I address?

Understand the investor mentality you meet. In general, there are more conservative investors and in times of crisis they tend to hold their cash and suspend their investments, while others are more adventurous and look for great opportunities with lower valuations. Try to evaluate which of the two is the potential investor you are meeting. If the match is with venture capital, you should find out when the fund was launched to determine where they are in their cash distributions. For younger funds that are only one or two years old, they will actively seek to invest and the crisis could be a great time to invest as most companies’ valuations will drop. However, many of these
funds will also want to mitigate risk by investing in more mature companies that have a clear path to profitability. As you will do on normal days, you should also make sure that the VC you are meeting is interested in the space you are active in and has already made an investment in this vertical.

Think like a camel, not a unicorn. Camels are built to survive in some of the harshest climates on earth. They are hardy and can survive for many weeks without food or water, continuing to run fast when needed. On the other hand, the mythical unicorns in the business world are focused on rapid growth through deep funding and an accessible talent pool.

Be open and transparent with your investors. Make sure investors are fully aware of your company’s situation, changes in the market you operate in, the challenges you are facing, updated revenue projections, and a list of realistic short-term and future financing needs.

Prepare for post-crisis growth. Make sure you have a complete operational plan ready for the next day when things get back to normal. Make sure your business plan reflects how you will adapt as the skies clear and your business grows.

Denise De Gaetano has worked with a number of different companies, ranging from start-ups to Fortune 500 companies, providing deep insight in various aspects of Business, Marketing analytics and strategies, together with A.I. and Blockchain technology implementation for various aspects of the business. Her work and input has helped companies generated and build 1.5 B + in funding, venture capital and revenue. She is a data and business analyst with a strong background in helping various companies to obtain corporate growth objective by providing strategic direction, diverse perspectives, and positive leadership. She has a proven track record in leading complex improvement initiatives and applying solid technical, research and analytical abilities.

This content was supplied by the European Startup Hub