MAINTAINING AN INVESTOR DIALOGUE RELIES ON PIVOTING TO RELEVANT TECHNOLOGIES

WEDNESDAY 20 MAY

Start-ups afraid that they will be unable to access vital funding during these uncertain times need not be overly-concerned – an open source list of European investors has so far registered more than 240 funds, with 98% still accepting pitches and almost the same number still actively investing.

This is an important moment for VCs to double down and back their portfolio companies, to add value to their investments and ensure they are stable in the long-term – don’t expect them to go quiet during this period.

If you are in the middle of an investment cycle, ensure you are keeping in touch with your prospective funder; the best investors will always have their eye on the ball in the midst of a crisis, and so prove to them that your business is viable in this difficult time. A travel business for example, will struggle to attract any investment right now, but if they can show that they can pivot into other areas or use their technology in multi-faceted ways, then this will catch an investor’s eye.

The message from investors to entrepreneurs has to be to think about where they fit within the next start-up boom. Just as the downturn of the 2008 financial crisis conceived a technological revolution that birthed the likes of Air BnB, Uber and WhatsApp, the next generation of successful companies are likely to be formed in the wake of COVID-19.

 

If you think about the other side of this crisis, you can see three emerging patterns: firstly, the move from a gig economy to a remote one. This may well be intended to be in the short-term, but we must be prepared that six months or more of social distancing will cause a longer-term re-adjustment in how we work.

Overnight, Zoom and Microsoft Teams have become perhaps the most important workplace tools for any company. But these applications were not built with the intention of feeding a near-universal remote workforce – at least not as suddenly as they have – and so where the opportunity lies for a disruptor in this space is in the creation of easy-to-use, multi-generational technologies in response to the situation.

We will also see a rapid advancement in the health-tech/ med-tech space. Quite simply, an epidemic was not something that the world infrastructure was prepared for; despite Bill Gates calling on business and governments to prepare for something like this in a TED Talk five years ago.

This has been a wake-up call and we are already seeing companies re-deploy their resources into vaccine research, testing kits, symptoms trackers and other technology-driven solutions, while GPs and consultants who have so long been resistant to becoming technologically agile are employing digital solutions to seeing patients.

No doubt innovative entrepreneurs will be the ones to ensure we are not in this position again, and those who can prove they have the solutions to prevent it will have investors knocking on their door.

 

Finally, we are seeing increased demand for online government services and advice. Reports of a customer placed 112,000^th in the online queue to apply for universal credit, over-burdened NHS 111 phone lines and the cancellation of mayoral and local elections, shows just how under-prepared our public sector is for a technological challenge on this scale. What will emerge from this are govtech solutions that ensure the frictionless use of government services in a situation where there is overwhelming demand.

These are just three sectors that are likely to emerge as the most investment-friendly in the coming months and years. We cannot accurately predict who will come out on top, but what we can say with certainty is that there is no need for the founder-funder relationship to break down – as long as each proves to the other the value they can add.