We are hopefully past the cloud of Covid – with the economy now fully roaring, though there are macro uncertainties with the ongoing Russia- Ukraine conflict. In these uncertain times, it has been heartening to see the comeback by some of our portfolio companies. As early-stage investors, we are sometimes guilty of mentally writing-off some companies early after a certain period post-investment. These may be on account of numerous factors: limited traction post-investment, promoter inability to update his thinking and pivot, new developments in market/ competition, etc. Whilst all VCs do this, it is essential to draw learnings from when a company bounces back to emerge stronger than ever before. Having witnessed some impressive comebacks, we thought to pen some key takeaways:

·         In times of crisis, focus on what you can control – costs!

While the Covid-19 crisis affected all businesses, it hit some particularly hard. Revenue was zero for several months for some businesses. In such times, promoters should focus on factors they can look to control – costs! Businesses had to cut all flab, discontinue rent & other subscriptions and let some people go. Companies looked at substitutes processes/ products which could enable cost savings across the board

·         Scale Back to Move Forward

One portfolio company had to let go of their entire sales force despite the promoters not taking any money for themselves. This in turn forced the promoters to reinvent their sales model, the end result – a far more efficient GTM strategy that has enabled the company to grow faster even post Covid!

A much-quoted example is Airbnb’s comeback post-Covid – but not many were confident when it first announced its cutbacks.

·         Going back to the drawing board

Several companies realised the need to change their approach or in some cases new business models altogether. ConceptOwl, a portfolio company that focused on helping prepare students from Tier II and Tier III cities for entrance exams in an offline model became HabitStrong, delivering online habit-building boot camps for digital de-addiction and focused reading. Read about this transformation here

·         Let the numbers do the talking!

The Covid-19 pandemic made investors averse to some sectors. Despite this, promoters plugged on frugally believing in the problem and the scale of potential impact. We have been pleasantly surprised by the traction achieved by some of our companies including managing to raise substantial next rounds at a higher valuation. As they say, numbers tell the best stories!

We are grateful and inspired by the resilience shown by some of our founders and hope to continue to support them going forward. If you are a founder who emerged stronger post-Covid, do share your learnings with me (ds@malpaniventures.com) or Sid (ss@malpaniventures.com)