How to launch a new business in a pandemic
The COVID-19 pandemic has caused a special type of heartbreak for entrepreneurs looking to start new businesses. In addition to dealing with the many health and social issues brought on by the virus, they have faced the abrupt collapse of a near-perfect set of conditions for startups: a robust economy, eager investors, and unprecedented levels of venture funding.
The National Venture Capital Association warns that even though the investment community entered 2020 with a record $120 billion in capital available for startups, it won’t be nearly enough to offset the negative impact of the financial crisis as VCs redirect their investments away from high-risk, illiquid upstarts.
You can find hope, though, by combing through history, says Jim Ellis, a Stanford Graduate School of Business lecturer who received his MBA from the school in 1993. Many of the world’s most innovative and notable companies were born during downturns, Ellis noted during a recent panel discussion that studied how such founders and investors weathered the 2008-2009 financial crisis. Three Stanford GSB alumni joined Ellis to discuss how they navigated their operations through the Great Recession: Patricia Nakache of Trinity Ventures (MBA ’91), Skybox Imaging founder John Fenwick (MBA ’09), and William Shaw (MS ’08), who founded the Colombian airline VivaColombia.
Dozens of students and recent graduates attended the online Q&A session, where Ellis and his guests offered practical advice on how to find funding and keep a young business afloat during a global pandemic. Read More