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Why it might be easier to meet VCs right now (and other fundraising insights in a COVID world)

In April, Will Richardson (Giant Leap’s Managing Director), hosted a roundtable of venture capitalists (VCs) discussing the startup sector’s ability to raise money during the COVID-19 period (full recording of the session here). We’ve compiled some memorable moments below.

Obviously, getting in touch [as a founder], when you don’t need to raise and having a number of contacts along your path allows you time to build a rapport. That’s as opposed to having a single meeting, trying to build rapport immediately and then asking for investment at the same time. I mean, that [advice] goes for both pre and post COVID.

Where we are at right now, it is very easy to jump on a Zoom call. You don’t have to travel to a different coffee shop, go to a different part of the city or even go to a different city itself, depending on the VC that you’re talking to. So therefore, it has become a lot easier to ask for a number of quicker meetings, as opposed to a big coffee or a big lunch.

So definitely, leverage the fact that people are at home and they can have a number of shorter meetings over a period of time, whereas that might not have been so easy to do if you’re a Melbourne-based company, and the VC was in Sydney.

On valuations broadly, I was talking to Paul Bassat, who’s one of our co-founders and partners, and before that he built SEEK… he was telling me that he raised money at a $100 million dollar valuation in 2000, which was just as the dot-com went bust. And then he raised again in 2003, at a $100 million valuation. And for most people, people would be like: “it’s a bit upsetting that it’s the same valuation.”

But four years later, it was a $3 billion company. So I think … we just have to accept that valuations are a moment in time. And if you were forced to raise during this period and things aren’t looking great, it’s not a total disaster. So don’t hold yourself to raising super high valuation if it’s not possible.

Paul Graham has an awesome [essay] around people building cool things during downturns and I don’t make any speculations on the market, but in the 70s he was referring to Apple and Microsoft being started. This was written [during] the GFC where the sharing economy and the proliferation of mobile were coming at these moments where founders are really tested at their core.

The ones working on their life’s work will persevere.

I think that when there is such a huge shock wave globally, everyone’s facing a global set of problems [and ] you do have situations where there are really fascinating areas like Telehealth.

But also, just like zoom for going from 10 million daily active users to 200 million daily active users, like what would happen if they decided to create an app store? What are the ways that people could then explore that as a platform shift? There are a set of changing circumstances where people can really take advantage of it and look at it in a different light.

Editor’s note: In the original post we included a note about how hospitality workers drawing on their superannuation savings due to COVID-related unemployment would affect available VC funds because superannuation funds make up a large proportion of total VC investment. We’ve since decided that the insight is probably done better justice in the recorded video format — which you can check out via this link.

This story was originally published on the Giant Leap blog.

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