The main goal of the survey was to find out more information on how to conduct business and do investments online without the possibility of face-to-face meetings. By sharing the key findings we hope to give you a fresh view on what’s going on and to give you a positive boost on helping to keep the startup ecosystem ball rolling.
The survey was conducted between April 3rd – 20th 2020
Total responses 225
Total countries 32
Startup responses 125 / 55% ; startup countries 22
Investor responses 99 / 44% ; investor countries 23
While analyzing the results, we discovered several interesting things and decided to highlight a few ones first before letting you dig in deeper.
1. The willingness to participate in an online matchmaking event is very high. With the removal of face-to-face events until further notice the need to connect with new people is still vivid. Link that with over 80% of startups and investors saying meeting each other is an essential part of their work, and the need for solutions is very real
2. Valuation expectations show a huge difference as more than half of the startups think their valuation will go up and on the contrary 90% of the investors think valuations will go down. So both are very optimistic? Better to prepare for some tough negotiations ahead, but in a positive way.
3. Urgency of raising money is extremely high as almost 50% of the startups say they have a need to raise during the next three months. When we reflect this to investors saying that they expect to be able take face-to-face meetings again in about 2-3 months, things seem to get a bit tight.
4. But here is the good news, especially for those startups with urgency. When we asked investors about making investment decisions based on an online meeting, 90% said yes or maybe if you have met in person before. And to our very positive surprise, 22% said yes and 39% said maybe on making a decision based purely on an online meeting. So a whopping 61% of investors are in some level open to closing an investment deal without meeting face-to-face, what a great news for startup founders. This probably means that some data verification solutions are needed.
Overall, we can definitely see a positive drive and high willingness to stay active, to try new online solutions and to get deals done regardless of the uncertainty in the moment. Thank you very much for everyone that participated and contributed, your voice is now heard, and shared for others to listen too.
At Arctic15 one of our core value promises is to provide top level matchmaking experience, so after analyzing the survey results, we have already gone into work in order to create something useful for you to fill the need to keep the startup ecosystem ball rolling. Stay tuned for something cool very soon!
If you think someone you know should see these results, please feel free to share with them.
Jan Ameri, CEO of Arctic15
Here are the more detailed results:
Likely to participate in an online startup-investor matchmaking event?
Average score: 4.1 / 5
Total of 75% said likely (4) or very likely (5)
How long should an online meeting be?
84% chose 15 – 30 mins
Length of a break between online meetings?
50% wants 5 mins break
How many hours in a day would you spend on online meetings?
Majority said 2- 4 hours
Which aspects are the most important in an online meeting?
How much time are you willing to spend on preparing for an online matchmaking event, going through other attendee profiles and sending and accepting meeting requests?
Startup – Where do you see the most negative impact of Covid-19 on your business?
Startup – How long is your runway at the moment?
Half of the startups have less than six months of runway
Startup – How quick is your need to raise money?
Almost 50% needs to raise urgently during the next three months
Startup – How do you find investors?
What do you expect to happen for valuations?
Big difference between startups and investors
Startup’s objective when meeting an investor
Rating: 1 – 5
|Access to their network||3.9|
|General feedback on my startup||3.8|
Other objectives mentioned:
- Find out their values and culture
- Making intro to other investors who might be interested
- Qualifying them quickly, and only if they qualify – “get the second meeting”
Do you consider an investor meeting as an “essential” part of your work?
82% of the startups said yes
Do you consider meeting a new startup as an “essential” part of your work?
91% of the investors said yes
Startup – Do you need professional assistance in getting or contacting the right investors?
Quite large number, 60% of the startups said they would need and some said they want even they would not need!
What kind of an investor are you?
More than 50% are VC
Investor – What stage companies do you invest in?
Investor – How do you see this current situation impacting your investment decision making?
Investor – Do you think you will stick to your previous investment thesis?
Investor’s objective when meeting a startup
Rating: 1 – 5
|Get to know the business opportunity||4.7|
|Get to know the person||4.5|
|Learn about the product or service||4.2|
|Building a relationship||3.9|
|Learn about the specific sector||3.1|
|Research and benchmarking||2.8|
Other objectives mentioned:
- Provide feedback to entrepreneur
- Find out how coachable they are
- Experience on executing business plan
- Understanding the team and culture
Investor – How long does it typically take to come to a decision to invest from the first meeting?
In less than one month, some investors said they can decide in few days, some in a week or two
Investor – Would you make an investment decision based:
1. on an online meeting with someone you have already met in person?
2. purely on an online meeting?
Investor – What factor do you consider the most critical on online decision making?
Rating: 1 – 5
|Trustworthy verified data||4.5|
|Founder’s ability to adapt into this new situation||4.2|
|The likeability of the founder(s)||3.9|
|Sales or growth projections||3.7|
- Shareholder and investor references
- Good quality materials
- Due diligence
- Online demo
Investors – When do you expect to be able to take face-to-face meetings again?
5% said they can take now
Investors – What channels are you using for your dealflow now, with social distancing?
- Online events & demo days
- Investor network
- Business Angel networks like FiBAN
There you have it. The startups and investors have spoken, and you should have a better understanding of the needs and expectations in an online environment for the coming months and possibly well beyond. Stay safe and stay positive!