An open letter to founders and leaders of ventures across our ecosystem
Over the past few years the TechNexus venture investment portfolio has grown to include companies in nearly 30 cities around the globe, and the broader ecosystem of partners expands to dozens more parts of the world. We separately shared workplace wellness suggestions for the current health crisis, but the effects on our economy and all of our businesses are real and interconnected.
Precautionary impacts due to the COVID-19 outbreak, including restricted travel, uncertainty impeding 2020 business plans, progress delays, and supply-chain disruptions, are an unfortunate business side effect of this global health crisis. We believe the physical safety, health & well being of our community is of the utmost importance, and encourage you, your families, and your employees to take proactive measures in staying healthy during this time.
Beyond precautions to keep your team and workplace healthy, you should consider other steps to manage your business through the potential long-term economic downturn.
If you lead a company into which TechNexus has been privileged to invest, we did so in large part based on our confidence in your leadership, within your own company, and across the broader ecosystem.
Some of you may have seen the recent Sequoia Capital post that’s been circulating over the last couple of days, Coronavirus: The Black Swan of 2020. If you haven’t had a chance to read it, we encourage you to do so. They do a great job of summarizing the economic situation, and we echo their suggestions to ensuring the health of your business while dealing with the potential business consequences of the spreading effects of the virus.
Here are a few tactical suggestions we’d like to highlight from the article. It is best to question every assumption about your business, including:
- Cash runway. Do you have as much runway as you think? Have you made contingency plans?
- Fundraising. Private financing could soften significantly, what would you do if fundraising on attractive terms proves difficult in 2020 and 2021? Could you turn a challenging situation into an opportunity to set yourself up for enduring success?
- Sales forecasts. Anticipate that your customers may revise their spending habits. Deals that seemed certain may not close. The key is not to be caught flat-footed.
- Marketing. With more significant economic and fundraising uncertainty, you might even want to consider raising the bar on ROI for marketing spend.
- Headcount. Given all of the above stress points on your finances, this might be a time to critically evaluate whether you can do more with less.
- Capital spending. Until you have charted a course to financial independence, examine whether your capital spending plans are sensible in a more uncertain environment.
- Protecting your people. The most valuable part of all of our companies are the team members that have joined us to build the business. Be sensitive to the needs and wellness of your entire team.
- Be a community leader. We very much believe the most successful entrepreneurs share responsibility and leadership beyond their companies, are committed to community service, and to the support of the ecosystem around their business.
As entrepreneurs ourselves, we recognize that running a business during times of uncertainty can not only impact the health of your business but your overall sense of well being by adding additional stressors and obstacles in the face of change. We want you to know that you are not alone. The entire TechNexus team is here to provide any additional guidance and support you may need. Please do not hesitate to reach out.
Onward and upward, together!