The year 2020 has been the most unprecedented year for absolutely everyone suitable from people, organizations (large and compact), startups, markets, and investors. The deadly Covid-19 virus, which originated in late 2019, began displaying its wrath in 2020 bringing in the worst ever socio-financial crisis of the century. People lost lives and jobs, quite a few organizations had to shut shops, and markets had been in the doldrums. The investor neighborhood that assists organizations with finance and method was in a state of ambiguity and was pretty cautious of their subsequent step forward. Some of the major early-stage investors who had place their bets on segments such as travel and hospitality witnessed their investments erode and took methods to tackle the scenario.
Here are some learnings that early-stage investors garnered in the year 2020, which is also the year of the most serious worldwide pandemic:
Brainstorming for the duration of a time of crisis is vital. Most of the genuine early-stage investors right away known as up their portfolio businesses when the news about the crisis broke out. As per these investors, it is essential to have a conversation with the portfolio startups and recognize their scenario and assistance them with the subsequent methods so that small business continuity is not impacted.
Need for becoming sector agnostic is what most early-stage investors realised. All these who had a wide variety of sectors in their portfolio had been capable to execute far better rather of these who had startups from a precise sector. For instance, these who had their investments only in hospitality or travel had to bear the brunt.
Knowing the small business in and out is essential. As an investor, it is essential to recognize the nature of a small business in and out. Your job is not only to pump in revenue but also to assure that the revenue is multiplied and that is only doable if the investee business is performing nicely. If you, as an investor, recognize the small business nicely then you would also be capable to assistance it maneuver for the duration of a time of crisis.
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Digitization is critical as it is the way forward and each and every small business, compact, medium, or huge, has to adapt and adopt to technologies in a bid to not only survive crisis like the Covid-19 pandemic, exactly where physical distancing became the new normal but also to boost productivity. With pandemic like Covid-19, organizations got disrupted like by no means ahead of. New technologies such as AI, ML, information visualisation, RPA are necessary to automate mechanical/semi-mechanical jobs.
Closing offers remotely is also doable now. There was a time when investors, specially the early-stage ones, had to conduct quite a few rounds of face to face meetings with the startup founders ahead of investing in a business. However, 2020 has created absolutely everyone realise that remote operating is as helpful. Many early-stage investors have been capable to make record offers this year and also raised record capital by way of Zoom and Google Meets. 2020 has produced a new workforce management program with a distinctive operating encounter
Think worldwide, work worldwide is the new normal as for numerous investors who had concerns raising capital from LPs sitting abroad, 2020 was a blessing in disguise. With the pandemic, the globe has also shrunk as remote operating has come to be the new way of performing small business.
Healthtech, e-commerce, and fintech emerged as the major and most profitable segments for investors in 2020 for motives nicely-recognized. These segments fall below important services and have continued to remain unimpacted by the a variety of lockdowns imposed by the governments worldwide.
Dr Apoorva Ranjan Sharma is the Co-founder and Managing Director of 9Unicorns. Views expressed are the author’s personal.