India's top VCs publish ‘best practices’ for startups to tide over the Covid-19 crisis

• Sequoia India, Matrix Partners, SAIF Partners, Lightspeed Ventures, Kalaari Capital, Accel, Chiratae Ventures, Omidyar Network and Nexus Partners published their learnings from the startup world for founders to learn.
• From scenario planning to fundraising and company restructuring or business continuity plan, the document has a detailed learning graph for founders.
• With the coronavirus pandemic, there’s going to be a funding crunch, valuations could change due to uncertainty.

The coronavirus pandemic has put Indian startup founders in a spot. Startups in several sectors will have to go for months without revenue and many could shut down. Only a few startups in the sectors of education, healthcare, entertainment, fintech etc could brave through the crisis.

‘We're in uncharted waters, founders face tough decisions’

There’s going to be a funding crunch, valuations could change due to the uncertainty. But investors understand the dilemma that founders are facing. Some of India’s top VCs – Sequoia India, Matrix Partners, SAIF Partners, Lightspeed Ventures, Kalaari Capital, Accel, Chiratae Ventures, Omidyar Network, Nexus Partners – published their learnings from the startup world for founders to learn.

The VCs published their notes on Twitter so that it’s accessible to all entrepreneurs – big or small. “We're in uncharted waters and founders are faced with their toughest decisions yet. Some of us in the VC ecosystem have put together learnings from our best founders. While in no way exhaustive, we hope it serves as a good starting point for founders in a tough time,” wrote the VCs.


Published on Notion – a workspace for notes, texts and more – the notes are called “Best Practices for Founders in the wake of COVID-19”.

“Founders will inevitably be faced with difficult decisions, tactically on execution for the next 21-30 days, and strategically on how to plan for the next 12-18 months,” wrote the VCs.

The document has learnings for founders on scenario planning, fundraising, company restructuring, business continuity plan, strategic relations and mergers and acquisitions, work-from-home ethics and much more.

‘Indian startups depend on capital from US and China’

The investors also spoke about the dependence of India’s startups on the world’s entrepreneurial ecosystem.

“India's startup system doesn’t operate in isolation and in fact, is dependent on external capital primarily from the US and China. It’s likely that the Indian mid to late stage startup financing market will see a rebound only after their ‘home’ markets rebound. So even if India escapes the Covid-19 crisis, we will still have to wait for the rest of the world to come back,” wrote the VCs.

While the investors have written clearly – no new hiring, they have also mentioned measures of cost cutting – from cutting down on marketing to saving capital costs. “Co-opt team leaders in identifying payroll cost solutions – be pragmatic but humane. Examples of ideas companies are thinking about vary from salary reduction, shifting to variable pay, salary deferral or worst case headcount reduction,” they wrote.

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Startup funding could halt, valuations to take a hit and business models have to be pivoted say investors