It has been an interesting year for startups as improvements and further awareness made the global business landscape even more interesting.
At some point in history, Venture Capitalists came on the scene and was greeted with so much acceptance. Business pundits and well-meaning Startups will also recall that Zoom took center stage when the business climate was approaching comatose during the heat of the pandemic.
Needless to say that Zoom investment saved the day for businesses and the startup ecosystem in general, making the business climate even more intentional and busy than ever before.
Even with a distracting change in business processes, startups need to reflect on how the happenings of 2020 have affected their businesses and the opportunities startups have been exposed to across the global scene. market, I wanted to reflect and see how the youngest startups are faring.
A study was conducted by Pitchbook to see if the next DoorDashes and Airbnbs are getting their first financings and results showed that Seed investing flourished though in a complicated way as Covid-19 effects showed Startups ready and attractive to private investors.
while explaining the dynamics, Lefcourt posited that seed prices are being driven up by the larger venture firms playing earlier and feeling like they cannot afford to miss the next DoorDash.
According to him, “the larger firms have so much capital to put to work and feel they are better off ‘burning’ some cash at seed for the upside of being in the right [startups] where they can double, triple, 10x down on their winners.”
Eniac Ventures’ Nihal Mehta while reacting to the dynamics said: “Because you can’t meet in person, investors felt more at home investing in established startups that had pre-existing connections to their social circle,”.
The long-term ramifications of this tunnel vision mean that female founder lost out during this time since social circles in venture capital are largely white and male. From a sector perspective, e-commerce and edtech have had an easy time raising funds, but at the cost of travel and hospitality.
The data brings a sort of dissonance to the startup ecosystem. Even though seed investing has never appeared busier and fruitful, this has come as some sort of success stories and negative to others this year.
This is a wake-up call to Startups to continue upscaling by staying abreast of happenings in their various sectors since no one saw 2020 coming with all the blessings that came to the startup ecosystem even in the face of the deadly virus.
This, in my opinion, is also an indication that even more success awaits the intentional startup in the coming year.
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