By William Rosellini – The IMF has dubbed it The Great Lockdown — COVID-19, while a healthcare crisis, has also caused the worst economic downturn since the Great Depression almost a century ago. In the U.S. alone, there are have been over 2.8 million confirmed cases, and since March, at least 40 million people have been left jobless as a result of the pandemic sweeping the country.
It will undoubtedly change the startup and venture capital landscapes, and to what degree is still to be determined. There are sectors that can (and do) thrive, and others that are hardest hit by the stay-at-home order. Brick-and-mortar retail, travel, leisure, and events are industries that need people through the door, and even with the boom in e-commerce, we don’t yet have a clear picture of just how much consumers have been and continue to spend.
This same logic extends to venture capital. Investors may be more conservative now, while some are choosing to stay out altogether until an end is in sight, but there are still investment opportunities out there. What you will likely find, however, is that they’ll expect more for less. Your investors may seek redemption or participating rights, higher percentages, anti-dilution provision, or representation on the board.
The pandemic has been a catalyst for founders and CEOs to be more prepared; planning and due diligence are key to not only surviving but also growing during this time. You may find that your business model needs review — can it still be executed? Is it still profitable, in-demand, or scalable? Did you have a working contingency plan? First-time founders are going to have the biggest challenge ahead of them, and expertise is going to prove invaluable after the dust settles. Experience brings with it not only an understanding of the startup landscape over the years ahead but can also highlight the areas that you need to reevaluate today. That edge is what will put you ahead of your competition — get a head-start on that right now, at no cost.
When looking back at past crises, both valuation and investment do decline sharply over the short-term but tend to stabilise again when public markets do. In short, you can raise funds in this pandemic but not until you’re able to answer some big questions about your product or business and its viability. Schedule a call with us now to learn more about how we can help.
William Rosellini is the President of CytoImmune Therapeutics, Inc, a clinical stage biotechnology company. Previously, William Rosellini was the CEO of Perimeter Medical, Inc. (TSX:V “PINK”) where he oversaw 2 510K clearances, an RTO and $30M in capital raised. Prior to that William Rosellini was the CEO Nexeon Medsystems, Inc., (“OTC:QB, NXNN”)a medicaldevice manufacturing company that went public in 2017. Before that William Rosellini founded, raised $16M across A/B rounds and led Lexington Technology Group, LLC, a database company commercializing an electronic health record database solution to an exit (“DSS” NYSE). Before that William Rosellini founded Sarif Biomedical LLC, a stereotactic cancer microsurgery with IP spun-out of Medtronic and led company to an exit with Marathon Patent Group, Inc. (“MARA” NSDQ). William Rosellini subsequently served on the Marathon board of directors and chaired the Audit committee. William Rosellini completed 2 acquisitions to form Telemend Medical, Inc. a clinical engineering services company and led that company to an exit in 2016. William Rosellini was also CEO at Microtransponder, an implantable neurostimulation developer with solutions for stroke rehabilitation. William Rosellini is a former minor league pitcher with the Diamondbacks of the Arizona League, holds a JD, MBA, MS of Accounting, MS of Computational Biology, MS of Neuroscience and MS of Regulatory Science.