In This Issue
- Welcome to the Inaugural Project W newsletter!
- Investor Q&A
- Resilience Checklist
- Our Founders on the Frontline
Welcome to the Inaugural Project W newsletter!
Welcome to our inaugural Project W newsletter. It’s not the one we expected to send. Circumstances intervened. Our lives have been turned upside down.
However, more than ever it is important to celebrate the amazing women and men in our community of founders, investors, mentors, partner organizations and allies and to recognize the work they are doing to develop game-changing solutions to the world’s biggest problems, including those created by the COVID-19 crisis.
In this issue, we celebrate some of the alumnae of our Women Entrepreneurs Boot Camps (WEB) who are driving solutions to the challenges we currently face. They, like so many female founders, are empowered by the qualities that inspire us: resilience, perseverance, integrity, ingenuity and compassion. We know you will be inspired, too.
We also share essential and timely insights from Edy Dorsen, founder and Managing Partner of WomensVCFund II, to help founders navigate the challenges presented by the current crisis and emerge stronger, smarter and positioned for success. Separately, we’ve included our own Resilience Checklist with tips for founders to manage through COVID-19.
Project W is built on community. While we are practicing social distancing, we have reimagined what community looks like. Here are some ways we can continue to engage and connect:
- Tune in to the virtual events and programs.
- Look into the opportunities listed in this newsletter. These programs will be even more important for female founders on the other side of the current situation.
- Register for Project W’s virtual program series featuring a number of the dedicated and accomplished faculty who have given of their time and wisdom to WEB. The series will cover topics that will help the founders in our network navigate these uncharted circumstances and emerge positioned for success. View our events here: www.dwt.com/ProjectW
In the meantime, we are deeply grateful to all the investors, partner organizations and allies in the Project W network: you are the safety net that will be there for our female founders. We are in awe of the female founders in our community and their determination, strength, and grace under fire: they are an inspiration to all of us as we confront our own challenges, personal and professional. And, words cannot express our indebtedness to the women and men on the frontline of this crisis: healthcare workers, grocers, delivery people, public transit workers, police officers, fire fighters and many more. They are keeping us safe and enabling us to do the work we love.
With gratitude and optimism,
Founder & Managing Director, Womens VCFund II
1. You have raised two funds and invested them across a number of sectors. How are you working with the founders in your portfolio to support them in dealing with the challenges presented by the COVID-19 pandemic?
From the start of our first fund, Women’s Venture Capital Fund management team has thought of ourselves as mentor capitalists. It’s probably more important than ever as we and the management teams at our portfolio companies navigate a rapidly changing environment and a period of severe disruption.
We assist founders and management in various ways depending on the portfolio company’s stage of development and the skills and the background of senior team. In the current environment, we’re serving as a sounding board while companies try to determine the best and most appropriate levers to push (and pull) in developing their contingency plans. We’re helping portfolio companies build their market goodwill and brand value by reaching out to potential customers and connectors on their behalf. We’re coaching individual team members who are experiencing particularly high levels of stress given professional challenges and family circumstances. And like many financial and legal advisors, WomensVCFund ll is trying to clarify eligibility criteria for federal, state and local resources to support portfolio company operations through this period.
2. How should founders be communicating with their investors and advisors about the risks to their businesses? Any tips for asking for help?
Most of our portfolio companies have put out an investor letter summarizing the key challenge they are confronting and the outlines of their initial contingency plan. These letter communications should convey that management has a good understanding of the challenge posed by the downturn and has developed and activated a Phase 1 contingency plan to measurably reduce expenses. It is important, however, to try to strike the right balance between reducing burn and keeping the engine intact for when business returns. We recommend that founders speak qualitatively about their plans and limit any discussion of specific numbers to all but the company’s largest few investors.
As for asking for help, the more specific founders are in terms of what they need, the more and better investors will respond. That is always the case.
3. What are the top things a founder should be doing right now to prepare to emerge from the current situation strong and in a position to succeed?
Founders should move full speed ahead on a Phase 1 contingency plan; do not wait as that will necessitate even further reductions in a short while. If possible, we recommend that early stage companies reduce burn to the level required to stave off the need to fundraise for the balance of 2020. Also, founders should identify clearly the trigger points that would require deeper cuts in Phase 2.
While it is understandably difficult to sell new business to enterprises right now, founders should identify every opportunity to set up or expand pilots during this period -- particularly at companies that may represent good reference accounts and significant revenue potential going forward.
Upfront, founders should demonstrate real leadership and senior teams should model shared sacrifice by taking a measurable reduction in their own compensation.
To the extent possible, portfolio companies should hold onto key senior level, technical and sales talent who are hard to replace and will be vital when business activity recovers. This is an especially good time to make sure those team members know that their contribution to the organization is recognized and appreciated.
4. What piece of wisdom will you share with the founders who are navigating this uncharted territory?
While these extraordinary times preclude any macro projections, WomensVCFund ll continues to believe that much of what has made our individual portfolio companies attractive investments pre-COVID-19 will bear fruit. In addition, we defer to many financial experts who foresee a good recovery once the trough is reached. Our financial system was much stronger leading into the current downturn than that which preceded the 2008 financial crisis.
Stay well, work remotely, thank your teams… This, too, shall pass.
Resilience Checklist: A Quick Exercise to Navigate Your Company Through Changed Circumstances
Rethink/re-strategize your revenue and markets:
- Prioritize resources on the drivers of any revenue you generate
- Focus on the distribution or partner channels that get you to market most efficiently and quickly
- Rethink how you build your sales pipeline: use email, webinars with demos of your product, content marketing and thought leadership in your market sector
- Consider a pivot to address needs arising from the crisis (healthcare/wellness, living and working remotely, creating access by digitizing activities)
Preserve your cash – runway, runway, runway:
- Reduce salaries and, if necessary, make the tough decisions to furlough or cut non-essential staff*
- Reduce or eliminate hours of independent contractors
- Restructure compensation of your sales force to be as commission-based as possible
- Eliminate non-essential and discretionary expenses
- Postpone product development or redirect spend to markets where demand continues
Communicate with your investors and advisors:
- Use complete candor and straight talk (no bullsh*t)
- Revise and share your key metrics: revenue projections, current and prospective customers, sales pipeline, cash on hand and burn rate
- Tap into their expertise; ask for targeted advice and support (not just a general plea for help)
Explore sources of additional capital:
- Small business loans (including Payroll Protection Program loans) under the CARES Act (see Resources at www.dwt.com/ProjectW)
- Ask your customers to provide “financing” by prepaying in exchange for discounts or other value add
- Ask your vendors/suppliers for seller financing of any purchases of materials and supplies
Most important: Take care of yourself! Without you, none of the above matters
*But, first look into the Small Business Administration’s Payroll Protection Program which provides loans to cover payroll expenses.
- Hello Alice's Business For All: Apply by 9/25 for 200K in grants and mentorship
- Silver Lining's Impact 50 Program: Applications close 4/3
- The Workers Fund Innovation Fund: Applications close 4/8
- World Bank Group & CES Global Tech Challenge: Solutions for Women: Applications close 4/15
- Barclays Accelerator, powered by TechStars, for FinTech startups: Applications close 5/10
- ESSENCE + Pine-Sol's Legacy Award of 100K for black women entrepreneurs: Applications close 4/15
- Women Founders Network Annual Fast Pitch Competition: Applications open 4/1 – 5/31
- Project Entrepreneur 2020 Accelerator: NY & LA, see link for deadlines
- Pipeline Angels Pitch Summit for Female Founders in various US Cities: Applications close 9/4