Masks? Check. Gloves? Check. Disinfectant? Check. Startup funding? Damn, I knew I forgot something.
Unlikely as this checklist may sound, it does serve to highlight how one’s priorities can change unexpectedly. Business often “takes a back seat” when one is worrying about family members’ health. Startups may be 24/7 commitments for their entrepreneurs; like the Post Office, nothing will deter them from their appointed rounds. The same cannot be said for angel investors.
Investments can wait.
The wait may be long during times of economic uncertainty. The NYSE has dropped over 11% from its peak in early February 2020. Experts are split on how much more it may slide. Will the coronavirus become a nationwide pandemic, closing schools and businesses, or will it be contained with new vaccines and/or other measures? We’ll know more in a few weeks’ time. For now, prudent angel investors are waiting on the sidelines.
Startup managers should plan accordingly. Here are some things they might consider:
Qualify Secondary Suppliers
The coronavirus crisis has disrupted overseas supply chains. Manufacturers in China and elsewhere have been impacted. Absent stockpiling inventories, having multiple qualified vendors provides management with the most flexibility.
Ration Current Funding
The verb, to ration, may sound somewhat extreme but it captures the nature of the current coronavirus pandemic. When additional funding is uncertain, among the few variables that an entrepreneur can control are his/her expenditures. Start sooner rather than later.
Keep investors informed. For those who have already received investor funding, be sure to keep those investors apprised of ongoing company developments: Good and bad. Investors are more than just deep pockets; they can help in many other ways.
Self quarantines of two weeks or more are a reality that many of us are facing. In many parts of the US, working remotely is now (temporarily) mandatory. These are unusual times and, thankfully, they allow one to accomplish unusual tasks. Like getting organized. In the normal course of startup operations, organizing one’s files, updating accounting records, or completing employee evaluations would be of secondary importance. Now might be as good a time as any to tackle these and other similar tasks.
Peter has spent the past twenty-plus years as an acting/consulting CFO for a number of small businesses in a wide range of industries. Peter’s prior experience is that of a serial entrepreneur, managing various start-up and turnaround projects. He is a co-founder of Keurig.