Kayaking Through The Turbulent Times of COVID

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When you’re kayaking, and you reach rough waters, you need to lean into the waves  and dig in with your oars. Well, we are in those rough waters. These  are uncertain times. With the current pandemic swirling around us, concerns about COVID-19 are not only affecting everyone’s physical health and well being—but they are also affecting our fiscal well being. For this reason, people are tightening their belts when it comes to their finances, not wanting to spend when so much seems to remain up in the air.

 

This hesitation to spend extends into the venture capital world. But the good news is that raising capital does not have to be an impossible mission, even in this surreal season of life. I have always found great strength and encouragement from those who have gone before me and been pioneers in doing things that most have yet to achieve. That is why I wanted to bring a success story to the stage, so that we may glean some much-needed encouragement, motivation, and even a model example to emulate in our post-COVID, capital-raising endeavors.

 

Back in May, as the world was still coming to grips with the sudden onslaught of the coronavirus, and most investors were running scared, one of our portfolio companies, Astronomer was able to close $13.6M in Series A Funding. This accomplishment is a testament to how a company can grow and expand even as the world around it seems to be tightening up and downsizing.

 

Astronomer’s CEO Joe Otto touched a bit on this success. He points to how the company is being proactive and boldly confident in its approach, versus the norm of pulling back andwaiting : “With this investment, Astronomer is accelerating our vision of enterprise-grade Airflow. We are pouring investment and resources back into the project to bolster the already impressive capabilities of Airflow, and are partnering with some of the leading organizations in the world to create an enterprise grade standard for Airflow.”
 

The CEO’s sentiment of bold proactivity is supported by Forbes experts as well, who, in a recent article, highlighted the need for “coronavirus champions,” explaining that this was “not a time for cowardice or fear-based thinking.”  So what is it the time for, exactly? And what should our minds be focused on?

 

The following are just a few tips on how we can all move forward with raising capital, donning our proverbial capes to also become coronavirus champions, even during this crazy time:

 

*Go On The Offense

When the market started to go bad, some people thought we should go into defense and wait it out . But it’s actually more important to lean into the hard times, and go on the offense. That may not be possible for everyone, but offense is the better strategy.

 

*Come Up With A Game Plan

After sitting down and assessing all of your options, it is essential to begin your journey to raising capital with a reliable game plan in place. This will include creating financial models to help you understand your cash position and determine just how much capital you need to raise (these do not have to be complicated, but they do need to be precise—we’re talking right down to the penny).  This is vital, as any investor you approach will want—and even demand—to see evidence that you have thoroughly vetted your needs and thought through this entire endeavor with a fine-tooth comb before they offer a dime up to back you.

 

*Keep Cash King:

What I mean by this is making cash the priority. By prioritizing cash (reducing cash spend), you place yourself in a position to not only be a healthier company but also to attract more investors’ confidence as they see how you can navigate the current crises. Ways you can show this is by renegotiating contracts and leases and evaluating to discover any fixed costs that you can turn into variable costs. This demonstrates an ability to refocus quickly and adapt to changing market demands by providing customers with what they are seeking. Currently, there’s a trend of consumers being more cost-conscious and gravitating to businesses and products that they feel they can trust and who promote a sense of well-being.

 

*Remember This Time:

Learn from it, we can’t prevent things like this from happening again, but we can be more prepared for them

 

I hope that this article not only encouraged you but also gave you the next-steps that you can start taking today to keep moving forward in your journey. Your business can not only survive this pandemic, but it can expand and thrive.