Startup Company : 3 Tips to Fund Raising in a Pandemic

Startup Company fundraising: The COVID pandemic has hit many startup companies in Singapore and globally.  Many startups are unable to pivot in the pandemic and as a result many have closed down and some other startups are facing issues in fund raising.  This article will highlight 3 key tips to fund raising in a pandemic that founders can take into account when fund raising for their startup.

#1: Covid resistant business model for startup

As a startup founder when faced with decreased business in a post-COVID world, each startup now needs to pivot to a COVID resistant business model to be able to ride out the pandemic.  Most investors today would need to see a COVID resistant business model before they fund the startup.

Many travel startups in Singapore for example were previously selling cross border tours but now are selling Singapore domestic travel packages.

#2: Expect lower valuations by investors to close a deal

Many investors today are asking for a huge discount off the pre-COVID valuations that they would have otherwise ascribed to a startup company.  As a startup founder, you would want to adjust your valuation expectations or try to show what is special about your startup that would justify a higher than market valuation ascribed to your startup.

#3: Fund raise using bridge round convertible notes

In the event that as a startup founder you are unable to agree to the issue price per share (or the valuation) of a priced funding round, you can potentially negotiate a bridge funding round with your investors to invest at a discount to the price per share of your startup company next funding round.

Fund raising in a pandemic is a tricky situation to be in, but with the assistance of a good startup lawyer, you would be best placed to negotiate the investment terms with your counterparty investor.  We hope that the three tips above can help you some way in your fund raising journey for your startup. 

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