3 tips to keep capital and weather the crisis

The pandemic was a big setback for the health of their companies, for an uncertain future and for the search for mentoring.

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3 tips to keep capital and weather the crisis
3 tips to keep capital and weather the crisis

These are difficult times, the crisis represented by the pandemic is leaving various devastations in the world StartupsFor many of them, the corona virus and market uncertainty embody their first economic crisis after living with an emerging economy that has remained stable for a decade.

according to The economist The decline in global production by 2020 is inevitable given the closure of economic activity and the collapse of the value chains. Also the IMF He presented his forecasts for 2020 and 2021 and found that a drastic decline of -6.1% is expected for the advanced economies for 2020 compared to only -1.0% for emerging economies. A gradual recovery is expected until 2021 if the reopening of economic activity is successful.

And the situation is no different in the country. According to the Banco de México, there is a broad spectrum of possible GDP behavior; whereas it rose from -5% to -33% in the second quarter of this year, with an average of -14.3%, indicating that it is the lowest decline in the past 25 years and that it is from the second quarter of 2021 GDP will start to recover.

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It’s a terrible moment, no matter how mature startups are, whether they launched their first product or are unicorn companies. The pandemic was a big setback to keeping their businesses healthy, facing an uncertain future and looking mentoring, InsightsThanks to their advice, investors, etc., they can better focus on this challenging moment and see why we share the following:

one. If you were just about to raise capital, go on Capital is the oxygen of the StartupsIt is obvious that venture capital (VC) will focus on companies that do better. Given that these investment vehicles are inherently high-risk, it is obvious that they will double under these circumstances, making them more cautious to invest in more profitable or more shaped companies, difficult (but not impossible) reviews of the investment thesis of the fund, prepares an excellent one deck, make a correct assessment and do it in good time, because you will definitely not receive a yes from the first fund with which you are supposed to show your product.

two. Under the circumstances, considers an investment in services to be timely or generally known as smart money. The main benefit of attracting this type of capital is the contribution that investors can make by having experience and knowledge of the market in which you participate (or will participate) and help to adapt your business model to a way in which the company will grow faster. Money is not always enough.

3. Be transparent to your investors and plan your financial needs with them, plan the essentials and try to maximize them runway. However, never forget that the best funding is the one you get from the customer. So work together to develop strategies that guarantee your payments, adjust your prices, negotiate terms, and so on.

We live in unique and complex situations. So try to take the best steps to move forward. If you think you can’t go alone, contact those with more experience.

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