Listening to Venture Capital Support to Portfolios in the Midst of a Pandemic

The prolonged pandemic was forced to postpone fundraising activities which are usually actively carried out by venture capital foreign and local in Indonesia. However, there are still some VCs who continue to carry out these activities, by implementing a more strict and focused startup curation process, adjusting to current conditions.

In a collaborative Startup Clinic session between Venturra Discovery, UMG IdeaLab, Plug and Play Indonesia and Alpha Momentum Indonesia, several VCs also shared their portfolio management tips and stories, and how the pandemic could be the most relevant momentum, to see the strengths and potential of startups.

The right time for slow down

If previously most VCs had a target for how many startups they wanted to join in their portfolio, according to Monk's Hill Ventures Senior Investment Analyst RJ Balmater, now is the right time for VCs to loosen their belts and focus on the right business verticals and the best for investment. On the other hand, RJ also sees that startups can also take advantage of this condition to re-examine the advantages of the company and of course its business model.

"Ultimately VCs want to invest in startups that have a healthy business, not just whether they can do it survive in the current state," said RJ.

The same thing was also expressed by VP Investment Kejora-SBI Orbit Fund Richie Wirjan, not just looking key marketsVCs can also use the delays in investing that are now being carried out to take a deeper look at the strengths possessed by startups, both those in their portfolios or those that have previously been glimpsed and have potential.

Meanwhile, according to CEO Prasetia Dwidharma Arya Setiadharma, utilizing existing data, a more in-depth analysis must be carried out to see the current potential. Make sure the business model you have has adjusted to current conditions, seen from an uncertain market to the possibility that the company cannot survive. On the other hand Arya sees services like groceries and delivered can grow positively by taking advantage of the present moment.

"For early stage My startup sees that there is still a good future for fundraising, but when the pandemic begins to recede in the next two years," said Arya.

VC moral support and network

Another thing that has become a priority for VCs during the pandemic is moral support to the extensive network they have, to help startups to founder. For Arya, everyone founder who are members of his/her portfolio are entitled to direct consultation support one on one to a special consultation by a psychologist. This is done to ensure the mental health of the founder, who is often under pressure to manage startups during the pandemic.

"We are also trying to help our portfolio to develop new ways that can be useful. One of them is Jakarta rides which was founded by Gita Sjahrir. Take advantage of services online, now users can enjoy live training from coach easily and at an affordable price. Not only users in Indonesia, those who live in Singapore are also many who try the service online that," said Arya.

Meanwhile, for Kejora and SBI who have been running a business more than just VCs, they ensure to continue to provide support to the ecosystem. Not only for new investments but also for those who have entered the pipeline.

"We don't want to leave them, the best way is to connect them with our ecosystem. Is it through workmanship pilot project, we do this to ensure they can continue to run the business. From there, we will discuss whether there is a further investment step or not," said Richie.

Utilizing technology and tools the right way, all portfolios in Monk's Hill can take advantage of the communication network between each other founder to conduct consultations and possibilities for collaboration. VC parties are also ready to help all startups to continue to provide support. Monk's Hill also conducts data organization which aims to see the overall portfolio owned and KPI of each startup.

Diversification and the decision to close the business

When the pandemic began, many startups were diversifying by presenting new services or doing business pivoting adapt to current conditions and to remain relevant. According to Richie, this is okay to do, as long as the startup can ensure that when the pandemic ends, the new businesses that are presented can continue to run. It's not just taking advantage of the moment.

"I think everyone should go back to the business they own. If you are not sure, do it" pivot better not to do it, although now is a good time to do some testing. During this crisis, focus on revenue rather than starting to explore new services," said Arya.

He added that currently in Indonesia, most companies imitate other companies when they want to present new services. Make sure everything is the right decision, not just taking advantage of existing conditions and opportunities.

Meanwhile, according to Arya, the important thing to note is that the services or new businesses that are presented can interfere with the running of the business. If the startup has the ability, tools to resources to build new services, it can be done.

Regarding the startup's decision to terminate their business, due to the pandemic, each VC claims to experience several failures from its portfolio. This condition cannot be denied, the right way that can then be done is, can startups apply the same method? read or then completely lay off their startup.

"In the end, when there is a reduction in staff or other decisions that must be taken, it is wise to do it. If the process or step can help startups to be able to do it, survive," said RJ.