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Discussion on: I'm Vivek Saraswat, investor in Dev Tools + Infra startups @ Mayfield and former product leader @ Docker/VMware/AWS. AMA!

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joshpuetz profile image
Josh Puetz

Hi Vivek! As an investor what impacts do you see the current COVID-19 crisis having on the startup scene?

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Vivek Saraswat

Hi Josh! The short answer is that everyone is hurting from the COVID-19 crisis right now. This is an unprecedented event in recent global history. The long answer is that for the startup it really depends on what stage (early stage vs. late stage) what industry (enterprise vs. consumer) and what sales motion (top-down vs. bottoms-up). I'll try to hit each of these briefly:

  • Earlier stage startups can more easily weather the storm the right now as they can keep their team size nimble, and are usually not reliant on customer revenues, to keep burn rates low. Late stage startups that have already built large teams are usually reliant on customer revenues and thus may be in a more precarious position.

  • Enterprise startups with a top-down sales motion used to rely a lot more on selling in person which is now much more difficult. What was once done over handshakes with C-suite and VP leaders must now be done over Zoom. Startups with a bottoms-up sales motions are having an easier time by nature of their design. Consumer startups are seeing impacts from changes in spending patterns as well (look at the travel, hospitality, and on-demand industries) but remains to be seen what long term effects on other areas will be.

  • As an early stage investor, I am certainly still talking to new companies (over Zoom of course...) as we are always thinking with a long-term lens. But simultaneously we are working closely with our portfolio companies to help them get through the crisis.