2020 has been a whirlwind of a year (to say the least). However, there’s one upside to challenging times — you can learn from them. A lot has been written about how businesses have had to adapt to the ‘new normal’ and how they’ve managed to stay afloat. But just focusing on startups doesn’t give a full picture of what’s happening in the entrepreneurial world. That’s why I contacted a few VCs to get a quick glimpse into how their year has been, and what they’ve learned during these trying times.
There’s always plenty of opportunities
Despite an economic slump in certain industries, Anis Uzzaman, general partner at Pegasus Tech Ventures, feels there are a lot of opportunities to be had. His feeling is that Silicon Valley investors have generally been quite conservative during the pandemic, holding off from signing on the dotted line until things calmed down. But for Uzzaman and his firm, things haven’t slowed down at all this year. “We’ve been able to invest in industry-changing startups, such as the short video content platform Quibi,” Uzzaman says. “They launched back in April-May, and since then the media has been all over them and they’ve been doing great.” While Quibi is far from being Uzzaman’s only investment this year, its success during the height of the pandemic illustrates that the world didn’t come to a full stop as COVID-19 hit. Just as agile startups managed to navigate unpresented circumstances, plenty of VCs were ready to jump in the rough seas with them.
Disruption can equalize the playing field
Irina Haivas, partner at Atomico, also agrees that 2020 has been an incredibly busy time for VCs, and she thinks it’s only going to get busier towards the end of the year. “All of us have remained very active and I think it’s proven how adaptable human beings are,” Haivas says. “We’ve moved so quickly on to a new reality. In fact, we probably got to see more companies because we save on travel time.” Of course, it’s difficult not being able to meet up with and work with people in person, but Haivas believes the disruption caused by COVID-19 has accelerated a change that she’s seen coming for a long time. “We’ve been bullish on Europe since the beginning because innovation comes from everywhere, not just the big hubs. Now it’s becoming more and more obvious that it’s getting increasingly distributed.” Physical proximity and presence used to define many larger ecosystems, making it harder for startups outside the bigger hubs to access people and capital within them. But when everyone had to pivot to video conferencing, it opened up doors for founders in smaller hubs as it made physical presence less relevant. Coming from a smaller hub herself, Haivas definitely sees this as a positive development and hopes it will bring better solutions to more people.
Better ways to communicate with portfolio companies
Luca Bocchio, partner at Accel, has also felt the effects of going remote — but says he’s also found it to have an unexpected positive impact. Bocchio is used to working closely with entrepreneurs and spending significant time with them. Since the pandemic hit, that’s not been an option so Bocchio has been forced to find new ways to grow VC-founder relationships. “I had to completely change how I interacted with my entrepreneurs, and quickly realized that it was becoming easier to interact more frequently with them. I’ve been very hands-on, helping out with hiring new key people and focusing on key areas of businesses on a deeper level,” Bocchio explains. “This requires much more frequent interaction, but with shorter time slots than what we were used to before. And I’ve personally enjoyed that, because I’ve been able to spend more quality time with my entrepreneurs.” Bocchio adds this has also improved how his firm shares ‘best practices’ between its portfolio companies — resulting in more structured materials, remote meetups, etc. Frequent check-ins have helped find the best solutions to the same hurdles most companies are facing at this time, and helped all the different businesses address specific issues and thrive. Now the question is, will this be the same in 2021? And what bets are investors making for 2021, are there particular industries they are bullish on? I’ll ask them about that during our panel at TNW2020. Join us there!
