Will the year 2022 be remembered as the year venture capital investments crashed? We will have to wait and see how the rest of the year turns out, and we will publish a year-end report on the subject. At Seedbiz we always say,
To get more clarity on the subject we asked key opinion leaders in our field on their perspective on the current state of venture capital investments; Amos Talmor, President of Seedbiz and founding partner at Talmor Group, Refael Cohen, Vice CEO at Rami Levy Group and owner of 2 Crypto startups, Amalia Shechter, Founder and CEO of Venture Partners & AnD Ventures, Nitzan Peleg, COO at Seedbiz, the startup support company helping startups raise funds.
The main difference between entrepreneurs and investors is that entrepreneurs might not succeed in their venture, while investors are always looking for opportunities to invest their capital. However, given the current economic environment, investment opportunities are thinning out and investors are growingly hesitant to deploy their capital. In such conditions, entrepreneurs might wonder, how can they stand out as an attractive investment opportunity during this time? We compiled 6 highly valuable insights by industry leaders on how to capture investments despite the current economic conditions and competition.
Angel Investor, President at Seedbiz Group, Founding Partner at Talmor Group
We reached 2022 where just 2 years have passed since the largest economic freeze caused by the coronavirus pandemic. Up until 2020, entrepreneurs where preparing to raise capital or expand their businesses, while investors and investment funds were scouting startups. Without any prior notice, we all had to cease our activities, and reconsider our path ahead.
These days, when I meet entrepreneurs, I focus on assessing their financial abilities, less so their technological abilities, as the need to float and grow in the current economic environment is the most important factor.
My advice to investors and entrepreneurs, or those wishing to become one, is to focus on how to make the financial aspect of their business strive against the current economic conditions. Do yourself a big favour and seek the financial advice of well established experts, accountants and lawyers, that are strongly acquainted with your field.
To summarise, you have a genius idea (I’m confident you do!) but make sure you build adequate financial, marketing and sales plans. If have those plans in place, I’m sure investors will look at your startup more favourably.
Amalia Shechter Orly
Founder and CEO of EXITEAM
EXITEAM created an ecosystem that helps Israeli tech companies to IPO on the unique Canadian stock exchange. With the the public market downfall that started this February, and the common grim outlook people share on the near-future, we keep hearing that there are no good companies to invest in. I propose the opposite, it a bearish market actually uncovers great opportunities.
For example; bearish markets cause many entrepreneurs to become more humble and offer investors attractive valuations. CEOs focus on making their companies more efficient, cut down on costs, and make their companies more lean to adapt to market conditions. Investors will actually invest in such companies as they get more for the same or less capital deployed.
My advice is maintain caution and pick wisely. This rings especially true with current market conditions.
EXITEAM uses 4 main criteria when choosing which companies to support and present to investors:
- Management / Board – strong, stable, and have proven themselves successful over the past years.
- The product is commercial and has sales
- The company has been experiencing growth over the past years
- There is a unique technology behind the product
A company that has the above 4 criteria can withstand this harsh market despite its headwinds. Companies with wise leadership can actually take advantage of this time to focus on growing its organic sales and to stand out quickly when markets gain positive momentum again, thus reaping the fruits from having established a solid grounding during this time and when markets rebound.
Vice CEO at Rami Levy Group and owner of 2 Crypto startups
International markets are at a crossroad right now because of rising interest rates and institutional investors are diversifying their investments. I therefore think that during times like these its better to keep a long term mindset and get involved with technologies of the future; autonomous vehicles, deliveries, cryptocurrencies and anything that has positive market growth and is the frontier of innovation of that market. We can that we want everything here and now, simply and quickly.
Identifying trends is imperative, at Rami Levy Group we identified the trend and we are about to take a huge leap in an activity that combines the growing markets of deliveries and drones.
Attorney Reut Goldman
CEO at "Geomatrix"
Headed senior roles in technology, medical, and business development
More than 2/3 of start-ups in the world are not able to take off, from reasons that include lack of financing, lack of interest from investors, or plain failing business plans, all of which cause thousands of great ideas to disappear. We have seen a change in approach to how to take ideas from ideation into action which concentrates all processes in one place.
The new approach helps investors and entrepreneurs screen ventures to check the feasibility of technological development at every stage. At Geometrix, we invest in our clients whose potential market is $200k and upwards and has the potential to launch within 3-5 years, this is also contingent upon our engineers conducting their due diligence of each technology. Our advice is to have a marketing plan in place that proves its commercial feasibility.
Venture Partners, AnD Ventures
We as investment fund managers look for entrepreneurs that are agile and adaptive to unprecedentedly rapidly changing markets, are creative, quick on their feet and determined to face their challenges. The good news is that the typical Israeli entrepreneur tackles uncertainty in his/her daily Israeli life, whether it is with the military experience in technological units to develop certain technologies or as commanders in the field having to quickly solve problems as best as they can – this is a big factor that we believe causes great technologies to be developed out of Israel.
At AnD we are not afraid to invest in startups in their early stages. We have a lot of traffic coming in and out of our offices, entrepreneurs that meet with our investment team to discuss the market, idea, and we are glad to add value to them.
COO at Seedbiz Group and Head of Finance and Investor Relations
As one represents investors from various backgrounds, and as on who has been meeting 5 investment-seeking entrepreneurs every day for the past 4 years, I have one thing to say: “There’s always money to invest, there are not many entrepreneurs to invest in”
Every entrepreneur will claim his product to be the best, however, have you considered yourself to be an investable opportunity to an investor? If you received a no, you probably weren’t good enough for them. My advice to those entrepreneurs is to conduct a proper investor research which will most likely open your eyes on which investors/companies/funds are right for you. Understand this this is a business game where entrepreneurs need to find an investor to move on to the next phase of their venture, while an investor is looking for an investable opportunity.
I have not cheated on met investors that are happy that their capital is lying in their cash account, and I have yet to meet private companies that don’t invest in their areas of interest, and of course I have not med investment funds that are saving on investment capital. Investors, angels, funds, private companies, institutions and public companies have a clear interest to find great entrepreneurs with companies that have a sound product in which the entrepreneurs invested in and have real commercial feasibility.
Finding investments is challenging and becoming more sophisticated every year which is why it is best to learn from experienced individuals who have seen their fair share of action from various perspectives of the deal table. Leverage these experienced entrepreneurs and investors by learning from their experience, focus on the practical stuff and less so the jargon, stick to what you believe, and give your investors strong offers and business deals that will make them want to do business with you in this round and future rounds as well.
And what is your opinion?