How to Fundraise During COVID-19
The COVID-19 pandemic has presented entrepreneurs with a set of unique challenges. As the investment landscape shifts to online fundraising, business owners are met with the task of finding funds during an international time of crisis. At M13, we believe in the entrepreneurial spirit to adapt and pivot in unprecedented times.
Founder and executive chairman of the XPRIZE Foundation, Peter H. Diamandis, chats with three venture capitalists about raising funds during the coronavirus pandemic. M13 Co-Founder Courtney Reum, Teymour Boutros-Ghali of BOLD Capital, and Dakin Sloss of Prime Movers Lab discuss investments and entrepreneurship in an unprecedented time of global crisis.
These seasoned VCs walk entrepreneurs through the process of building and growing companies during COVID-19. Courtney, Teymour and Dakin provide their distinctive perspectives in trying times. Below we’ve recapped their discussion, followed by the full webinar video to enjoy the discussion.
What advice is there for those that are pitching over Zoom?
- Use Gallery View rather than Speaker View. When you use Gallery View, you can read body language rather than focusing in on one person. You can see how others are reacting to build your response.
- Try not to use Self View. If you’re in an in-person meeting, you don’t see yourself. It can be distracting and create self judging thoughts, rather than being totally focused on how this is being received by the other person.
- Virtual backgrounds can be distracting, but are understandable. Many homes weren’t equipped to be full-time office spaces. When pitching via Zoom during COVID-19, it’s understandable to consider using a virtual background.
“Tech is at a level which makes it–– I won't say the same as being in the room–– but pretty damn close.” – Teymour Boutros-Ghali
Is now a good time to start a company?
- It’s always a good time to start a company. You should start a company because you're passionate. You want to use that company to make a dent in the universe.
- If you break through, it forces discipline. Maybe not on the ideation, but on the execution, to be extra disciplined.
- This time is just one of many walls you’re going to encounter. Now is the time to figure out how to slam through or go around it.
“That's a good time to be asking yourself: is venture right for me or should I be looking at different methods...” – Courtney Reum
What are venture capitalists looking for in a company?
- In your enthusiasm, also an ability to be realistic about your milestones. You won’t always be able to raise money easily. You must be clear on your milestones.
- It's important to be able to speak to investors about current trends and how you can capitalize on them. Articulate how you are working with what is happening in the world. You must be able to speak to how the company can benefit from what is going on.
- Think long-term with your company. Focusing on the short term is ineffective when no one knows what the medium or long-term looks like.
“Periods of difficulty tend to bring the best out of entrepreneurs, or at least the ones who truly have a belief.” – Teymour Boutros-Ghali
How important is revenue right now?
- It depends on the sector. Revenue is really the proof that the “dogs will eat the dog food.” But in some cases, such as pharma or biotech, disruptive technologies can receive funds without revenue.
- In the broader market, more will be focused on the revenue stage from an investment perspective. Previously, investors were more comfortable letting things progress in the pre-revenue stage.
“You're going to see a lot more people focused on revenue from an investment perspective, that previously were kind of comfortable letting it ride for a while.” – Dakin Sloss
What new ways of interacting will come from this epidemic?
- Potentially expect the dissolution of traditional offices. Many companies are getting rid of some or all of their real estate holdings. It allows for companies to operate diversified.
- Slack and Zoom are just the beginning. There is a new generation of Wifi coming out; 5G, VR systems and so on.
- Venture capitalists may now have to get comfortable investing in someone they’ve never met. Entrepreneurs must make sure their passion and enthusiasm comes across virtually.
“I'm really excited for someone to start something right now… if you're someone that gets people's attention in this climate, it means you really have something compelling.” – Teymour Boutros-Ghali
The key takeaway here that every entrepreneur should understand: have passion for what you do. No matter the situation, your passion will prevail. When you’re driven by dedication to your idea, it’s easy to push forth and keep moving. Watch the full conversation with Carter, Teymour, Dakin, and Peter below.
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