Why a Recession Could Be Good for Corporate Venture Capital?

Traditional Venture Capital Investments are Decreasing, but Corporate Investors are still Going Strong.

The current economic climate has led to a slowdown in traditional venture capital investments, startup valuations, and exits. However, this may be an opportunity for corporate venture capital to thrive. In this article, we will explore how startups and corporate investors can embrace tough economic environments to refine product or service offerings, attract new customers and invest in the future.

Startups may benefit from increased access to top talent at lower compensation levels and can use this opportunity to pivot and refine their business plans. It is important for startups to remain flexible and create business plans that include expected, worst-case, and best-case scenarios. By doing so, they will be ready to spend less or spend more, depending on which scenario materializes. They should also be open to feedback from customers and employees, pivot if feedback indicates that a new direction would attract more customers or grow revenue and engage their team to develop innovative solutions.

Corporate investors should conduct careful financial analysis and compare a startup's position to its competitors. They should also consider customer loyalty and adoption of the startup’s products or services. Lastly, corporate investors need to ensure critical factors, such as a startup’s ability to be profitable, having a well-written business plan, and demonstrating a thorough understanding of the competitive environment. These helps indicate whether the startup has the potential for strong financial growth in the future.

Why is this a good time for corporate venture capital??

Typically, corporate investments are long-term and are made based on strategic alignment and financial return. Given that, there is still opportunity for startups to develop partnerships with global corporations and seek investment. From what we’ve seen, corporate investors have not backed down due to the slowing economy. They want to grow revenue and normally look at a 10-year return on their investments. At our firm ( VCengine ), where we invest on behalf of corporate partners, we are investing at the same pace as before the Covid-19 pandemic and subsequent recession.

While it is critical that corporations conduct thorough due diligence, I recommend that they continue to invest during recessionary periods. Since traditional VCs may be investing less, corporate investors can be more selective than usual. Startups that embrace downturns may have less competition and have the opportunity to refine their product or service offering to meet customer demand.

In a 2022 Harvard Business Review article, professors Vijay Govindarajan and Anup Srivastava urge companies to continue investing in growth during recessionary periods. Part of their argument is that recessions are typically brief and have historically been followed by long periods of expansion. They note that startups that embrace downturns may have less competition and have the opportunity to refine their product or service offering to meet customer demand.

In conclusion, recessions can be a challenging time for startups and investors alike. However, by remaining flexible and open to feedback, startups can use this as an opportunity to refine their business plans and attract new customers. For corporate investors, there is still potential to form long-term partnerships with startups that align with their strategic and financial goals. Conducting thorough due diligence is critical, but corporations should continue investing during recessionary periods as startups that embrace downturns may have less competition and can refine their offerings to meet customer demand.

If you need help with your capital-raising efforts, we at VCengine are here to support you.

But what is?VCengine?

We are a California-based Investment Banking SaaS platform that simplifies capital raising for startups, non-tech businesses, and institutional investors (Venture Capital, Private Equity, Family Offices, and many others)

While?VCengine's human layer is more than qualified, it still cannot fill the gap when it comes to finding the right investors. Conducting research on all available investors and reaching out to them individually is an inefficient and tedious process that would waste a lot of time and manpower.

Here is where our AI-powered investor database comes to the rescue?in addition to?our?extensive network of over 32,000 angels, venture capitalists, limited partners, private equity funds, and family offices?spread across the globe.

Our mission is to give every entrepreneur in the world access to the best investors in the world.

With a human-driven tech stack, VCengine provides customized solutions to each client. The company's team of financial experts, advisors, and designers helps startups create pitch decks and business plans, negotiate deals with investors, and take care of every aspect of the fundraising process.

Here are some tips on fundraising from us as a bonus:

Why work with us? Here are some points:

- Proven Success -?Over 900+ successful fund raises, 25,000 investment firms, 6,000+ angels, and $3B+ in transaction history

- Personalized Support -?Work with a team of experts to tailor your business plan to your specific needs and present your business in the best possible light

- Access to Investors -?Connect with a wide range of investors through our established relationships, with over 5000+ meetings per month

- Investor Engagement -?Track and maintain reports of investor activity, see which investors have viewed and responded to your deal, and aim for 50 to 600 investor engagements per deal

- Fast Response Time -?Receive support with a commitment to a fast response time of 12 hours or less

Let us help you turn your fundraising goals into reality!

Connect with us via our website:?

Or email us at: [email protected]

And also check out this opportunity to network with investors:

TiE Global Angels Investor Summit 2023!

TiE Global Angels?Investor Summit (in association with?TiE SoCal?Angels) is one of the largest gatherings of venture capitalists, angels, family offices, and individual investors on the West Coast of the United States.

• EIGHT DAYS UNTIL THE EVENT! HURRY UP AND GRAB YOUR TICKET WHILE YOU STILL CAN!
• USE THE OPPORTUNITY TO PITCH IN FRONT OF MORE THAN 50 ANGEL GROUPS!
• THE LIST OF INVESTORS THAT WILL ATTEND CAN BE FOUND ON THE WEBSITE BELOW!

You can get a discounted ticket by using the code LUKE600 (for pitching) or LUKE300 (for Summit Pass) here:

WHY ATTEND?

This event will be the hotbed for Networking, Discussing Trends & Deal-making.

Held at the prestigious Sheraton, Cerritos, this event is a must-attend event for investors as well as startups looking to build long-lasting relationships in the Southern California ecosystem. The last few years of this event were well received by Startups and Investors alike and the event attracted 550+ attendees overall. This year, the event is going to be even bigger and better.

• Thursday, April 6, 2023 – 8:30 AM to 5:30 PM
• Sheraton, Cerritos, CA 90703

200+ Investors are expected to attend the event this year including venture capital firms, angel investors, family offices, and individual investors.

All investors are screened prior to receiving admission. Fewer than 100 startups are issued tickets for admission, 25 startup tables are available and only 12 companies will be allowed to pitch.

WHO SHOULD ATTEND?

Startups from the following industries: Fin-Tech, Bio-Tech, AI/ML, Big Data, Cyber Security, Cannabis, Blockchain, Health and Wellness, Media/Entertainment, Gaming, CPG, and Enterprise Software

SUMMIT PROGRAM & FEATURES

- Access to funding resources

- Present your business ideas to investors

- Virtual profile with Videos

- Business Networking To Maximize Exposure

INVESTORS

If you are part of the startup ecosystem, this event is where you can get the pulse of the industry. Spend a day with the most prominent investors from Southern California talking about trends, deals, and plans for the future. We will have a curated list of startups that match your investment criteria available for you. The profiles will be available a week before the event so you will know exactly who will be in the room.

Get your PITCHING ticket with a $600 discount by using the code LUKE600 and the following link:

TiE Global Angels Investor Summit 2023

YOU CAN GET A $300 DISCOUNT FOR THE SUMMIT PASS BY USING THE CODE LUKE300

Post by Corey Singleton , COO at VCengine ?Lachezar Zanev?(Luke), Ambassador at?TiE SoCal Angels?&?VCengine

Join Lachezar (Luke) Zanev's Founders & Funders Discord server called Venture Network below:

#startups #VCs #corporateVenture #corporateVentureBuilder #VentureCapital #investors #angels #innovation #ventures