Wondering how your startup will survive COVID19? Heres 8 tips to keep you going!
Dan Rosen is the long-time chairman of US-based startups investment group Alliance of angels. Here he shares his thoughts on the financial aspect of the COVID-19 outbreak and what it means for startups.
Obvious yet important. Dan advises that every strategy put into place at this time must be about survival. Put aside your plans for world domination and focus on the only important thing right now: staying alive.
Cash is king
You may have hundreds of ideas on how to grow your startup or how you´re going to survive through the pandemic, but none of that matters if you don’t have any money. Ensure you have a cash reserve. Take action early and make sure you have at least a year’s worth of money kept aside to keep you going, if not more. Even if the pandemic ceases earlier than expected, the turmoil left in its wake will be unprecedented.
Forget about raising money
Investors won’t stop investing, they too need to survive, but don’t expect large sums of money. Funding rounds will stall. Perhaps those who have raised funding prior to the virus will receive support, but for those who haven´t, expect a dry patch for long after the virus is over, angels too will need time to get back on their feet. Also, communication is vital at this time, communicate with your stake and shareholders, tell them the bad and the good news (if there is any).
Revenue is likely to be curtailed
Waiting for contracts in the pipeline to close? Expecting this money to save your startup? Don’t count on it. Even big companies with huge amounts of revenue may be struggling to survive during this time. Unless you offer a product or service that is deemed vital at this moment in time, expect many of your contracts to be stalled or cancelled.
Read more of Dans tips here.