We are already seeing the impact of Covid-19 on investments in the startup sector.
Investors are seeing stress with their current portfolio, with their business models put into question as the world starts to see the various knock-on effects of the global lockdown, and are having to allocate investment funds to support their existing companies, with some investors seeing additional demand for top-up funding in the multi-million pounds.
This will inevitably reduce the available money for new investments. The angel and seed investors are putting on hold any new investments, and larger investors, from family offices to dedicated funds, are using any reserve funds to keep existing investments alive.
What does this mean for startups?
- Well you will need to focus on reducing spending, and maximum the runway of any existing funding.
- You should look at finding revenue earlier than you originally planned, using this as the way to deal with delays in attracting investment funds.
- Look at government grants, there is alot of grant funds available if you have a product than might apply in helping the situation with COVID-19.
- Start the process of engaging with investors sooner, as the process will be longer to get funding, and the competition higher.
- Prepare well, leverage our service, PRIME, to help you get you investor ready
- Dont give up, some investors are still investing, especially in deep tech sector.