Covid-19 Comparative Discussion

Covid-19 Comparative Discussion

Covid-19 Comparative Discussion, But like their big consumer cousins, these startups might sometimes have trouble valuing themselves and getting money.

“Start-ups don’t have to push the limits when they have money. A lot of them could make money, but they don’t. Now, that will change,” said a well-known VC in Singapore who didn’t want to be named so as not to upset investors and startups.

The New Funding Landscape

People say that investors are only motivated by fear and greed, or “FOMO” or “fear of missing out.” As has been said, venture capitalists are watching and waiting.

But for founders trying to get money, a “wait and see” decision is the same as a “no-go.” Several startups have said that their talks with venture capitalists have been put on hold or moved back.

Some startups even said that investors were pulling back term sheets and pulling out of deals that had been agreed to in principle.

This is especially true for angel investors, who put their own money into new businesses and are probably much less willing to take risks now.

When we talked to venture capitalists, they told us that, except for hospitality and travel, which are “radioactive” and will likely take a long time to recover, they are still looking for new investments, especially in the seed stage because these bets are “for tomorrow rather than for today.”

As of the beginning of this year, there is a huge $7 billion in venture capital money available as dry power from funds that are only for India.

Add up the money from investors in other countries and from funds like Tiger Global that work in different countries. You can easily have a pool of money worth more than $10 billion that wants to invest in Indian startups.

But in the past year, what venture capitalists look for in Indian startups has changed. There is a lot more focus on only investing in companies that serve large markets, have positive unit economics, and have a clear path to making money.

This is probably less about the virus and more about the mess SoftBank made with the WeWork IPO. If anything, that was more of a “Black Swan” event that changed the VC story from “growth at all costs” to “profitable growth.”

Portfolio Startups

The investor said that one of the businesses in which they had invested had cut their marketing costs by 40% without much change.

Still, all of the VCs in India agree that it will be hard for companies to get Series B or more money at this point. Most of the companies at this stage have raised money in the past at high valuations, with the expectation that they will soon grow quickly.

Most of these growth goals can’t be met because the virus outbreak has made the economy weak. This makes it hard for consumer and business companies to raise more money at a higher valuation than the last round.

The stock market has also gone down, and startups that just went public are being valued at multiples that are close to their all-time lows.

This is especially true for SaaS startups, which are now solidly in bear territory. This makes it even harder for startups in their later stages to raise money at valuations that were expected.

Conclusion

At the beginning of the outbreak, everyone did the same things to stop the deadly virus from spreading. Some of these were putting sick people in quarantine, finding out who they were in contact with, and staying away from them.

But each country had different healthcare systems, infrastructure, risks, and threats, as well as different political and economic problems.

Realizing these differences shows how important it is to look at how different countries dealt with the COVID-19 pandemic in a nuanced way since each of these factors affected the government guidelines that were given to the communities and healthcare systems in each country.

FAQs – Covid-19 Comparative Discussion