Investing During COVID-19: What has changed?

COVID-19 has impacted all our lives in one way or another. Here’s how it’s impacted my work as a venture investor.

Video Transcript

How has COVID-19 impacted our work and our decision making as investors?

How has it impacted our work?

Well, first question first, how has it impacted our work? I think mostly for the positive, I spent quite a bit of time traveling to Berlin, to Cologne, to New York, to Miami, to San Francisco. To all these different places where we have portfolio companies just to sit down for a day or two or sometimes even just for a board meeting. And I am really looking forward to a future where we connect through video and do all of those important meetings through video only. It’s also a much better experience doing it through a video now than it has ever been before. Since now, everyone is on Zoom or Hangouts. And so it’s much much easier to feel and connect everyone. Whereas before, if just a few people were in the video and a few people were in a room, there’s always some sort of a mixed experience.

Zoom sessions

Also, connecting with co-investors that’s probably the second most important group that we often talk to, besides founders and potential founders, has gotten a lot easier. Before, it was often etiquette to go out for lunch or dinner together to talk about deal flow and recent developments. And now that can be done in a half-hour or 45 minutes Zoom session. That’s a lot more efficient and just better for both parties’ time.

Our decision making as investors

And second part: How has COVID-19 impacted our decision making as investors? Well, not so much, but in a few points. Number one, we probably ask a few more questions about your runway and how you could potentially slow your spending so that you could extend your runway. In general, we think that if you’re raising now, you should raise for at least 18 months, meaning the end of 2021 or ideally two years meaning spring 2022 because my hope is that by then, the fundraising environment will have somewhat stabilized and normalized.

COVID-19 and this changed world

The second question that I often ask is, how can you profit from COVID-19 and this changed world? And there are two things that I want to get from this. Number one is, is there actually something in the business model that, if slightly tweaked, can profit from the current crisis? And number two, and that’s the more important part is how conscious is this entrepreneur, this founder of his timing, how conscious is he of what’s going on in the world? And just in general, how well is he or she able to take a step back and kind of assume a bird’s eye view on the world of which has been this only a small part but and figure out how these larger dynamics interact with his business and what he’s working on right now.

So to summarize, how has COVID-19 impacted the way we do our work? Well, not so much, if anything, I think for the positive in that we have to travel a lot less than we can still meet and have important meetings online. And second, how has it impacted our decision making? There are a few more questions that we like to ask and get a good idea of how the founder thinks about how this larger dynamic of COVID-19 is impacting the business. But other than that, we are very excited about investing in early-stage technology companies right now.

And with that, stay curious, and I’ll talk to you soon.