Startup Office Hours

Founders and team leaders, we’re here for you. 

All of our former senior operators - who have been through multiple downturns - will host virtual office hours to answer your startup questions on how to respond to emerging challenges. After every session, we will summarize each question and answer below. Have an additional question? Email [email protected] with the subject line "Virtual Office Hours" and we’ll answer as soon as we can.

Jump to a question:

    Macro level of VC - who is still investing?
    • Early stage--Seed and Series A--investors still open for business because at the earliest stages companies are still focused on product development. 
    • Growth investors and funds of funds are pausing and waiting to see how things play out for the next two months.
    • Tactically, look for new funds that recently closed and announced as they have a lot of money that needs to be committed.

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    What should startups do differently than did a month ago to weather this storm?
    • Take care of your employees. Over communicate and be transparent with any company changes. Make sure they are set up for success for working from home.
    • It is critical to retain existing customers. 
    • Stay alive. People will become risk averse right now so save resources, including cash - so you have opportunity to grow again when environment normalizes

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    What do you think is the most important thing for entrepreneurs to communicate to venture capitalists in a virtual setting? 
    • Get on their schedule. Virtual meetings are really efficient, so VCs are taking a lot of meetings.
    • Highly encourage 30-45 minute meetings and that both parties are on video. Include it in the calendar invite that this is a video call meeting.
    • Don’t be promotional. Be a calm, balanced, reasonable version of yourself.
    • Repetition is key. You have to be tighter and more direct on virtual calls.
    • Each call should have a specific purpose: use cases, product demos, answering questions

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    What is the main thing VCs get attracted to in a startup pitch during a downturn?
    • Show why you can still successfully operate in this environment
    • Show signs that customers are still engaging with your product (new contracts, renewing, deploying, increased pipeline) 
    • There are places where things are unaffected or positive catalysts - look for those signals and tack to the wind. 
    • Find the pockets of opportunity where your product solves a key problem for a specific group

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    How to raise money remotely? How to build partner/founder relationship without face to face meetings?
    • More frequent, shorter interactions - double expected time going into it. Build the trust over a longer period of time.
    • Effectively building that relationship is going to be as much about mastery of material. Investors will look for: How well do you know your domain? How well do you understand your customers? How well do you understand how to build product? How well do you understand how to engage with customers, including in this environment?
    • Reference the partner. Diligence to fill in the gaps.

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    How to strategize if a category/product is not specifically “need to have” right now?
    • Figure out where this could be “must-have” for a segment
    • Consumers and businesses will tighten up and focus on fewer things that are higher value to them so consider narrowing the scope of product or focus on a narrower set of people and show the value of your product

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    Should we narrow our pitch to focus on a feature that is driving business during COVID19 or stay on the big vision? 
    • Need to have a delicate balance--a synthesis of bringing the two together.
    • It’s not compelling without a bigger vision.
    • Yes, show why near-term progress will get you through this environment, but also weave into context of how it will drive business in the long-term

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    Are there other ways you can make progress beyond selling stuff to customers? How else can I create value in this environment? 
    • Customer discovery: talk to your customers and understand what they need, what other problems they're solving, what tools they're integrating your product, and any other additional problems you could solve for them
    • Product development and dealing with technical debt
    • Company alignment: get clear on mission, values, and processes
    • Seed stage investors are very open to hearing this info right now

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    Will it be easier to raise desirable funding rounds in a crisis environment due to lack of new companies spinning up? Is now the time to be pitching? 
    • Yes, it's a particularly good time to start a company and do a seed stage round
    • If you have an idea and a level of validation and commitment around it, it's an incredible time to get going because you won't have many other competitors. 
    • It will be scary. It does take sacrifice
    • It will be difficult to ask for a check right now with so much uncertainty, but continue to show how you’re managing the crisis and ensuring ready to explode when opportunity comes

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    What are your suggestions for GTM teams on how to best adapt to the current scenarios?
    • Pay attention to your customers needs and the channels they’re engaging in
    • Develop a hypothesis on how to operate in this new environment
    • Recognize what you’re learning and the signals you see week to week

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    How to maintain our clients with a membership based plan?
    • Ask yourself if there are other ways of adding value for your community and demonstrating that your community has value and it's worth it for people to stay involved
    • Consider partnering with other organizations

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    In a fast moving crisis, with lots of changes week on week-- how do you show proof / data of inflection points to investors during a process at this time?
    • Clear prioritization of initiatives, projects, and goals
    • Customer retention and renewal
    • Customer expansion
    • Showing a financial plan with expenses under control

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