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Hi all, 

In this Tech Friday’s episode, we’ve talked to Marvin Liao, an Early Stage VC Investor, former Partner at 500 Startups. He’s now in the frontline of the startup ecosystem helping teams to survive. 

You can read the full interview on our blog. And here, we have some key ideas highlighted for you.

The first, and most positive news is that VCs continue investing their own money, unlike many startup accelerators which have put their funding on hold. So, there’s no need to panic, as you’re still able to raise money.

Another important idea Marvin has shared was that nobody actually knows how long the crisis is going to last. Assuming we get a handle on Coronavirus, and we get a better perspective on what's happening and if there's a recovery in summer, then the market will come back in September. If we don't have a handle on this, it might be not for a good while. 

The market is gonna shut down for a long time. A lot of folks are just not gonna be spending money. There will be deals being done, but the valuations will come down a lot. The market from the fundraising perspective will come back in September, assuming the overall economy will go back to normal. And if it doesn't, it'll slowly come back in 2021.

A vital thing every startup founder has to concentrate on, is looking at the cost structure. Putting the hiring process on hold, accounts receivables, etc. Any sales that you can try to push to close, if you're fundraising, close whatever you can, close right now. So it's a combination of bringing new money in from either present investors or new customers. 

Well, all advice comes regarding managing the money you have right now.

Process optimization won’t include any new partnerships and opportunities. A crisis is more about managing what you have right now. Don’t extend and attract any new obligations and collaborations. Focus narrowly.

Along with struggling economic sectors like restaurants, travel, offline entertainment etc., there are industries experiencing growth: anything related to remote work, remote education, remote companies in general. 

If you look at Zoom, they've done incredibly well! Then, Slack has become so critical for so many companies. Whether you're publicly traded or a private company, anything that helps remote work or infrastructure is good. Even gaming as well, a tool for entertainment. Being locked in a house for 2 to 3 weeks or longer, you can see core work functional products, software products, like Loom, video products, Figma, etc. Products have become much more mission-critical today. So looking at these sectors, from an investor’s perspective, might be a good idea now.

Telemedicine is undoubtedly a growing trend and we'll start to see the real use case of telemedicine. For a  lot of other companies, it's not as clear they'll make it. Pretty much bullish about that space, even there are a lot of competitors. It's a very good thing from both investors and customer's perspectives.

Another positive impact is that more and more companies are going to realise that good software can be created by distributed teams. There are cases already; there are companies already successful with their fully remote and distributed teams like Close.io, GitLab, GitHub, Buffer, Zapier, InVision. There's a lot of very good software companies. And the reality is that a lot of Silicon Valley companies in the last one or two years have become 100% remote. That will happen to many other companies in the post-Coronavirus world. Most startups are remote by default now, and it's a growing trend.