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How to alter your startup fundraising pitch in light of COVID-19

Apr 08, 2020

Amid the uncertainty associated with the COVID-19 pandemic, venture capitalists are understandably reluctant to open their purses — but that doesn’t mean that all venture capital funding is drying up.

In this climate, venture capitalists are likely to invest in businesses with robust plans that factor in the impact of the pandemic. Understanding what such robustness looks like can help you reboot your startup fundraising pitch. Here are four ways you can improve the outcomes of that effort.

1. Prove business resilience to customers and associates

Investors want to see that your startup or technology venture can navigate this crisis, survive and thrive. While there’s no magic bullet for doing so, understanding the needs of your three key stakeholders — employees, customers and investors — is key.

You need to reassure nervous associates about your funding situation and short-term plans. Be completely transparent about what the future holds and invite your team to brainstorm ideas. Associates execute your vision, so you need to invest the time and resources to understand and validate their points of view.

Similarly, customers need to know that your business will be resilient now and in the future. Understanding your customers’ perspective can even lead to new opportunities. Case in point: If you’re developing software for restaurants, how can you help your customers factor in the increase in takeout orders during the pandemic?

2. Conduct a business health check

Investors constitute your third set of stakeholders, and they need to see specific strategies that you’re adopting at this time.

These strategies include a revamped Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis to address both new threats and new opportunities. Startups can ask specific questions: How can I use my strengths to leverage these opportunities? What should I do to make sure my weaknesses don’t spoil the opportunities? What corrective action should I take?

While SWOT analyses are a regular exercise — pandemic or not — startups need to redo the analysis while factoring in a range of disaster scenarios, from low threat to worst case. You have to shift gears from normal scenario planning and conduct business health checks. Clearly outline how your business will react, adapt, survive and thrive under this range of conditions. Venture capitalists need to see a six-month and longer strategic plan for how you’re going to survive the crisis and emerge stronger.

3. Conduct a PESTEL analysis

Another strategy that venture capitalists love to see is a Political, Economic, Social, Technological, Environmental and Legal (PESTEL) analysis that models how the current factors in these spheres will influence the long-term viability of your startup.

Such an analysis complements the SWOT. It charts where you want business to be six months from now and the path you’ll follow to get there. Essentially, venture capitalists want to see that you’re intentional about addressing challenges in the wake of the pandemic.

4. Anchor your pivot on your core strength

No matter which industry you’re in, a crisis forces you to reevaluate your business proposition with new eyes. This is just what your fundraising deck needs, too. Focus on your strengths and build from that. An insurance startup, for example, can leverage its strong data analytics capabilities to get a better handle on the pandemic spread and forecast more efficiently.

It doesn’t matter which industry you’re in — you’ll have room to pivot. Finally, take advantage of the Coronavirus Aid, Relief and Economic Security Act (CARES) Act to see how your startup can weather the storm.

When you need help with your strategic plan

The pandemic might have redrawn the map in terms of venture capital funding, but there’s money to go around for startups that can show resilience and agility during challenging times. Redrawing fundraising pitches accordingly can help you realize business objectives despite the uncertainty.

Need more help with COVID-19 issues?

We’re here to help you navigate the uncertainty of the COVID-19 pandemic and its impact on your people, finances and business. We have developed a library of resources in our COVID-19 resource center to help you stabilize today and prepare for tomorrow.

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Author(s)

Girish M. Ramachandra
Senior Manager
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