Contributed by Rizwan Virk, author of Startup Myths and Models: What You Won’t Learn in Business School.
The pandemic of 2020 has tested most sectors of the economy. Like the downturns in 2008 and 2001, this has been a very trying time for entrepreneurs running startups.
Many entrepreneurs are reliant on outside funding, whether angel investors, venture capitalists or strategic investors, to keep the venture going. At the same time, many investors are being more cautious with making new investments, preferring to focus on their existing portfolio before investing in new companies.
While not all entrepreneurs are in the middle of raising funding, the need to get the company to some level of profitability, or at least to increase the runway, creates a lot of stress. It turns out that this is even true for a number of entrepreneurs I know who had profitable enterprises before the pandemic. Suddenly, the pipeline of customers that were expected to close was becoming smaller and smaller.