Pre-IPO Profits

Look Beyond the Lockdowns for the Best Deals

Look Beyond the Lockdowns for the Best Deals
By Adam Sharp
Date December 8, 2020

At the beginning of the pandemic, I thought startup investing volumes would drop dramatically throughout its duration. I was wrong.

Venture capitalists and angel investors seem to be funding more companies than ever. And much of that funding is going to startups that are benefiting from current trends — like work-from-home technology, food delivery and remote medicine. 

There’s certainly a strong case to be made that some of these trends will outlast the pandemic. So I’m open to deals in these “hot” areas. But I often find these opportunities are very expensive and lack traction. I think some investors are betting that this “new normal” will be permanent. So they’re putting money into startups even when the deal is over-priced or not yet proven. But I don’t think this “new normal” is actually going to last post-pandemic.

The only reasonably-priced deals to be found these days are in areas that COVID-19 has negatively impacted. So I’m starting to look beyond the lockdowns. I’m looking for startups that will benefit from things returning to a more normal state. I think that we’ll get there eventually. And signs seem to be pointing in that direction.

So I’m starting to explore startups that depend on real-life gatherings — such as conference tech or business travel. I believe these things will return eventually. And many of the innovative companies that make it through this difficult time will find a wide-open market on the other side.

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