The last few months with COVID-19 have left unparalleled marks in our cities and global economy. Nearly two million Canadians lost their jobs, markets around the world have crashed, and many of us are still uncertain about what’s to come next, even as we transition into a recovery stage.
Despite all that’s up in the air, technology has become the hero that plays a critical role in helping Canadians navigate their way through the pandemic, and helping build a better future than before.
Businesses have adjusted their models to become digital-first. Nearly 40 percent of Canada’s workforce has transitioned to working remotely. And just about every one of us has turned to a digital solution to take care of our essential needs.
Ottawa-based Shopify for instance, has grown to be one of Canada’s most valuable companies. Its stock surge puts it ahead as a leading e-commerce service for small businesses, whose solutions are needed now more than ever.
Similarly, this surge of technology has resulted in companies like Daisy Intelligence, a Toronto-based software company that uses AI to forecast inventory needs for retailers, to predict what products should make it onto store shelves, to better meet the demands of online shoppers.
As Canada’s economy cautiously reopens, we’re recognizing that there are more significant implications to technology than just the tools that keep us going in the state of recovery. Digitizing our economy post-pandemic will open up greater opportunities in tech to define how businesses will create value in both B2B and B2C markets, and across industries.
However, there are still challenges with fundraising during this time, as reflected in recent deal flow statistics. According to Crunchbase, there has been a 44 percent drop in VC deals made over the past three months from seed to Series B stages. What we’re normally used to seeing during this period is now almost cut in half–only 541 VC deals were made this year compared to last year’s 964. These numbers from our American counterparts are similar to the decrease in VC deals in Canada.
Investors may have pressed pause on your tech startup. Forging relationships with them proves more difficult without the raw sentiment backed behind face-to-face interactions, especially in early-stage investing. Relying on travel or events is no longer feasible.
So here is our advice for being resilient and fundraising in a post-pandemic world.
Stay connected with investors
Fundraising is about relationship-building. Times are different than they’ve ever been before, so staying connected to your lifelines is crucial to your success. Check-in on your investors, acknowledge their concerns, and use this time now to hammer home how your tech company solves X, Y, Z as people adjust to new ways of living and working.
Reminding investors why you’re valuable never hurts. There’s no better way to show how innovative your tech solutions are when you’re up against the wall and can’t rely on “normal” communication methods.
This is as much a test of resilience as any. Strong relationships will withstand the pandemic, and focusing on them will only grow your connections further.
Share the good news
You’ve already sold them on your great ideas, but that doesn’t mean the work is over. Pick up the phone, schedule virtual meetings, and do what you can to continue sharing the good news.
The most compelling and relevant stories during this time will give investors a reason to invest. Things like the next successful iteration of your product, a milestone, or exciting company news can go a long way in this journey.
Create content that inspires action, whether it’s publishing an article that speaks to the value your startup brings right here and now, or resharing something in your network that creates excitement for the future of tech. Investors have their bargaining chips on you, and it’s your job to inspire confidence in them.
Do more, not less
The world does not stop moving, even when it feels like it’s at a standstill. Now’s the time to double down on your efforts to re-emerge as a stronger tech company than before.
This may mean bearing the brunt of revenue loss in the short-term, but know that markets will eventually stabilize. You can’t always avoid taking a hit, but where you can direct your energy next is in preparing your messages for investors when the moment comes to reignite their involvement.
Don’t miss the boat on sending timely communications. Assess your data, strategize your back-up plans A, B, and C, and still be ready to pivot in case those plans fall through. Being flexible shows investors how you can rebound against challenges.
Make the big ask
You can’t do it all alone, and there’s no harm in admitting that. Be open about your startup’s needs and ask investors to be part of the solution. It may feel awkward or even wrong to ask for their investments at this time, but know that what you’re accomplishing together will benefit the way Canadians live and work for generations to come.
Raising capital gives investors the chance to impact a cause that’s important to them. Show how passionate you are about improving and defining the future with your valuable solutions. Let your relationships guide you and then tailor your ask accordingly.
A new world order
COVID-19 has permanently changed our world. While this year’s strategy may have taken an unexpected turn for your startup, it doesn’t mean you need to start from scratch. We’re all learning together how to thrive in a more digitized economy than before.
Adapting to the changes in this new economic order relies on continued investment in our Canadian tech sector. It’s not just about bouncing back from a recession. It’s about looking ahead to a new digital future, fuelled by Canadian talent and innovation that can go the global distance.
With added support from investors, Canada’s ability to harness the power of our tech sector paves the way for our success. The post-pandemic world has created opportunities for your company to get more innovative. You now hold a crucial stake in how your technology solves the challenges in our new world.
Harvest works with startups across the Canadian Prairies. Our venture building studio helps founders and startup teams build globally competitive companies through a variety of services, including recruitment and talent management, marketing, and fundraising support.
To learn more about our approach to co-building and growth services, check out Harvest.Builders.