The people around Slush want to help the start-ups in their network adapt to the new reality, as a first step, they gathered the best advice from Finnish investors and key members of the local early-stage investor ecosystem. We hope these insights help founders and start-ups in Finland and beyond forward in this challenging time.
Below Tom’s response and a link to all investors that had been interviewed:
Tom Henriksson, General Partner, OpenOcean
1. How do you see the situation with COVID-19 affecting the start-up and VC scene as a whole?
Covid-19 has certainly “stopped the music,” i.e. the growth of the start-up and VC ecosystem, for a while. A global downturn will result in companies growing less rapidly, and in turn, make VCs more careful in selecting new investments. Currently there is, however, more capital than ever in VC funds, so start-up investing will continue albeit at a slower pace and with more modest valuations.
2. How is your fund preparing for the upcoming months?
We have discussed and shared best practices for remote working, as well as tactics for surviving in a downmarket, with our portfolio-companies. We are in close dialogue with each portfolio-company to ensure they have realistic plans and capital to weather the storm.
3. What advice would you give Finnish startups now to keep their head above the water?
It is always dangerous to generalize, but here’s a brief attempt:
Unless you have one of the very rare start-ups, that is growing profitably and/or have solutions which may even experience increased demand in this market, we would advise you to:
– immediately cut all non-essential costs and freeze new hiring
– re-evaluate your customer churn assumptions and sales pipelines, as some of your customers will fight for their survival and will just have to cut costs massively
– consider your forward budget with a dose of ultra realism, and make sure you will survive for at least 12 months even in the worst-case scenario
– not forget to explore innovative, perhaps even radical, ways to secure new customers and deliver value to customers
– we obviously assume you have already taken measures to make sure your teams stay healthy and work productively in the new context
Read all comments from fellow investors like Icebreaker.vc, Inventure, Maki.vc, and more here
Slush is a student-driven, not-for-profit movement originally founded to change attitudes toward entrepreneurship.
Slush has grown from a single gathering in Helsinki to a series of events organized all around the world. They organize bigger events in Finland, and China, and smaller get-togethers around the globe, from Singapore to NYC.
Slush Helsinki is very close to our heart and we look forward to supporting to bring together global entrepreneurs, whether in Helsinki in winter 2020 or in any digital form.