Weathering the Coronavirus as a Startup: A letter from our founder

March 19, 2020 Posted by : Todd Flores
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Our team at SCI has been monitoring this health crisis closely as markets buckle under the pressure inflicted by COVID-19 (coronavirus). First and foremost, we have implemented policies to ensure the safety of our SCI team members in the United States and Europe. As a startup with a global presence, we already had policies and procedures in place which enable the SCI team to effectively work remotely. This has enabled SCI to continue internal development with a low impact to our operations.

However, as an early startup we are thinking deeply about how we can ensure the health of our business while dealing with the financial ramifications of the virus. We have certainly entered bear market territory and are at risk for entering a recession if coronavirus continues to spread across the globe at its current rate. SCI is in a particularly precarious position as we enter our beta testing phase at a time of economic uncertainty and contraction. Like every other business we expect that the quarantines, travel restrictions, and other social distancing measures, while necessary and effective, will drive down consumer spending and have a significant impact on every facet of the banking and financial system.

The startup ecosystem will certainly be impacted as several venture capital investors, including Sequoia Capital, recently pointed out in a letter to its portfolio companies. The area that may be most challenging for early startups like ourselves will be fundraising, particularly as VCs may have fewer FOMO rounds, higher due diligence and more selectivity in choosing investments. The positive news is that VCs are still signing term sheets despite the economic uncertainty, albeit it may take longer to do a funding round and there may be less term sheets to use as a leverage.

At the onset of the pandemic we were considering a Series A round, however we may adjust our fundraising round and bootstrap our product development over the next few months. We certainly will be trying to reduce our burn rate to ensure we can reach our milestones through this turbulent cycle. We are also exploring the option of seeking convertible notes that can provide capital to help us ride out the pandemic and can be converted into “discounted” shares when we raise our next seed+ or Series A round. There are many sacrifices we may have to make as a team in order to get through this period, but with our MPV ready for launch we are determined to weather this storm.

Over the next few weeks we will be posting content aimed at helping guide you through these turbulent times. With all our tools and services, we want to ensure we provide real value to our customers and investors. Therefore, we will be focusing our content on practical recommendations and knowledge that you can use to reinforce your financial position. Although we are realistic about the challenges we face in the upcoming months, we are also optimistic that it will bring out the best in our team. After all, some of the most iconic companies were created during the most challenging times.

Stay safe and healthy!

- Todd, Founder and CEO of Spartan Capital Intelligence

 

 

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About Author

Todd Flores
Todd Flores

Our Founder & US Army Veteran, OIF / OEF

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