Entrepreneurs are still the future of the economy. Entrepreneurs push innovation forward and find ways to solve the unique problems presented by COVID-19. Encouraging entrepreneurship requires investment capital and acquiring capital means investors must be willing to find opportunities during these uncertain times.
Recent history shows it’s possible for investors to find great investments during downturns. In 2007 and 2008, companies such as Airbnb and Dropbox were founded. They capitalized on the transformative shift to online platforms and the power of the cloud to connect people and processes.
COVID-19 is different because it brings more than just economic problems, but also fundamental societal changes and disastrous health impacts. The pandemic brought economic uncertainty and hardship, but it also brings opportunity. Of course, this does not mean capitalizing on the pandemic, but rather embracing the challenges and presenting your company to investors and consumers alike as one that offers quality solutions while improving social good.
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Solve real problems
Investors want to put their money into companies that are solving problems. For example, in the biotechnology and medical equipment spaces, there are needs for innovation through improved telehealth and better supply chains to manage surges in healthcare equipment.
Consumers have less money to spend, but they have also changed their habits in response to COVID-19. They’re OK with talking to their accountant via Zoom or using curbside pickup. And they are choosing to spend their money with companies that embrace social equality, environmental efforts and similar causes.
Startups and entrepreneurs need to recognize these underlying changes, such as the shifts toward remote work and how people want to buy products and services. The companies that will attract investment are those that understand the societal changes in play and are producing products, services and platforms that make things like working from home easier and more collaborative. These companies are also offering ways to make social distancing easier that also encourage personal connections and community.
The pandemic represents a significant cultural and behavioral adjustment in how people buy products and how they interact with each other, as well as how business is done.
Does your company understand the implications of these changes and have the vision to present solutions that make sense during the pandemic, as well as in the recovery years that follow? That sort of forward thinking stands out to potential investors.
Related: Download StartupNation’s FREE COVID-19 E-Book!
Find opportunities to help
The pandemic coincided with increased awareness of social injustice and inequality in the United States, which prompted deeper discussions about various societal problems. There’s a groundswell of support for broader change, and entrepreneurship will play an outsized role in this process.
For example, the nonprofit I founded, Forest Founders, was created to add gamification to planting trees. It introduced a scalable technology platform to something that’s thousands of years old.
Similar stories and ideas are out there during COVID-19. Investors looking for startups with social missions need to not only review the idea behind the company, but also the founder’s passion. That is what determines if the social good component is just lip service, or an integral part of the business that will bring about real impactful change. So, make sure your business practices what it preaches.
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Advance entrepreneurship
While investors and entrepreneurs alike should understand the pandemic’s challenges and be realistic about the economic climate, entrepreneurship never rests.
Access to funding is tighter, but it’s still a smart time to launch a company. Demonstrate to potential investors that you can operate at maximum efficiency with minimal expense during these times. Showcase how your business is capable of innovation with lean staffing, strategic cost-sharing partners, and how you can negotiate rates and terms with any necessary vendors.
For bold entrepreneurs, there is also less competition during the pandemic. Many potential startup ideas were negated by the “new normal” or potential founders are waiting for the pandemic to clear. However, startups embracing their bold ideas despite the current conditions are valued targets for investors, as both sides find opportunity together and hope for a better way forward.
