Fundraising during COVID Times

By: Ruhitha Reddy

Fundraising for a startup is a perilous journey in the best of cases but, during a pandemic, it is all the more difficult and quite possibly unattainable for many. However, that’s not been the case with a few fortuitous and resourceful startups that have changed their fundraising strategy to adapt to the pandemic using strategies similar to those mentioned below. This article aims to help startups by providing them with a few strategies to improve their fundraising odds. In particular, I will be using points discussed by Mr Charles Yu from Bling Capital and Mr Francesco Perticarari from Silicon Roundabout Ventures.


  1. Optimise and Go Lean


Both the VCs have mentioned this point and urged start-ups to act on this. Going lean means streamlining the business and cutting any unnecessary expenditure. With this in mind, startups should review their significant expenses based on the level of immediate needs for operation. Not only does this enable founders to stay afloat longer, but it also shows prospective investors resilience and prioritisation skills during a tough economic situation. Startups shouldn’t splurge on new expensive equipment, staff or launches. That does not mean you stop creating or stop trying to reach your planned milestones, but rather using your sensibilities and prioritising survival over empty milestones. There is no point digging through company coffers to fund a new release if you don’t have the funds to stay afloat for the next 12-18 months, especially if the release isn’t essential or incrementally increasing your overall revenue and improving your survival chances. Startups need to temper their cash burn and try increasing their revenue for every sterling spent. In an investor’s eyes, if a startup can weather this humbling storm called COVID, then it is ready to face any other problem on its course.


  1. Adopt, Adapt and Pivot


Startups need to pivot if they are in a position to do so. Hotels and Restaurants are said to be one of the worst-hit industries. However, almost every day there is news of restaurants adapting to their current situations and offering home deliveries or supplying groceries. A few Hotels have been finding creative means to stay open by partnering with governments to turn their hotels into quarantine facilities at a reduced room rate. For example, they need to adopt digital payment as in-person and cash purchases have been discouraged and they need to take advantage of the increased online purchases. If you are a hiring events startup, you need to adapt, be brave and take the first step of hosting online events instead. Companies must review their delivery channels and adjust them based on the situation. It is not easy to continue earning revenue, let alone showing a positive balance sheet with a looming global recession, rising unemployment and general unwillingness to spend. Most investors are not just looking at your company finances right now, but are looking to invest in startups that are able to read the situation and Adopt, Adapt and Pivot accordingly.


  1. Utilise all the relief packages and offers available


Startups are quite familiar with utilising every free and freemium business service available. Still, in the current economic situation, it is more of a necessity to employ all the tools available to you. Founders should apply for every relief package that is available to them and try being as self-reliant as possible when fundraising; this automatically puts you in a better position to leverage an attractive term sheet with investors. For example, if you’re a startup with staff working remotely, don’t pay for an additional paid video conferencing platform if you can use a free and reliable service like google meet especially if you already have a G-suite account. It is an open secret that Investors like to see Hustle, investors want to see that a startups uses in own funds as a last resort and the founders always look for the best deals and use all the tools at their disposable. This, in turn, shows investors that the founders are resourceful and explore every avenue available to them.


  1. Decrease your valuation or raise a smaller round


The valuations we experienced pre-COVID are no longer available; spending has been reduced on all fronts, and that has been the pattern with investors as well. If you are one of the successful startups to receive a term sheet during COVID, don’t be overzealous and try prodding for a better deal if you are already offered a reasonable and fair term sheet. If you’re unwilling to compromise on the valuation, then raise a smaller round and keep it brief. Raising a ‘bridge’ round will not only help you with the current conditions, but also give you a chance to raise at a premium post-COVID to offset the expected influx of increased liquidity from semi-serious investors.


These strategies don’t provide a guarantee to raise funds but will put you and your company in  a much better position compared to those that continue operating like pre-COVID times. Of course, all these points are relevant once the principles of fundraising have been followed. The first step of fundraising always starts with conducting your due diligence on the investors you are approaching. If you’re a Foodtech startup do not cold call Fintech and Insurtech investors; not only is it a waste of time but it also creates a bad impression, and the VC circle is a tight-knit group. Leverage your networks, once you have identified your potential list of investors, try finding common acquaintances and scoring an introduction, most VCs work on a referral system. Next, If you’re lucky enough to get a chance to pitch in front of a VC, then make sure you have perfected your pitch deck and be prepared for any possible question they might pose.


Fundraising is a hard task, but it is not impossible to achieve. Investors want to invest in your ideas, but you need to give them a reason to invest in your vision. Times are hard, but the greatest of innovations have come about during a time of need. It is up to startups to prove if they want to be the beacon of example that has survived a storm or another casualty of the hard times. Best of luck to all those that are fundraising during COVID.






  • Perticarari, F., 2020. Deep Tech Seed Fundraising During COVID… And Beyond. Medium.

Available at: <>.


  • Yu, C., 2020. A Top Investor Explains How To Get VC Funding For Your Startup During The Pandemic. Observer.

Available at: <>.