Food Startups in the Climate of Coronavirus
Exhibitors at Expo West, which usually attracts over 85,000 people, were left gutted last month when the event was cancelled as they were still setting up their booths. For the startups who had already invested heavily in getting there, the cancellation was a signal of major, unrecoverable financial losses to come.
“But not everyone has suffered. While segments of our economy have slowed to a standstill, attention has suddenly turned to plant based pioneers—and their potential role in future food security. Could this be the opportunity that none of us expected?
Nobody knows what’s going to happen next, when the crisis will end, or when toilet paper will be back in stock. But here’s the perspective of my own plant based startup, Grounded Foods, and how covid-19 has impacted our business.
The moment Silicon Valley flipped out
At the time Expo West was cancelled, I was in California on the fundraising trail for Grounded. Our flight into San Francisco had been eerily empty, and as a result of the show being called off, several of the investors who we were scheduled to meet up with also cancelled their trips.
Over the coming days, more meetings were postponed. Some VC’s had already closed their office doors to work from home. Unwilling to let this slow us down, we spent hundreds of dollars mailing out product samples to their home addresses instead.
The day that we arrived back in New York to officially announce our fundraising round, Wall St tanked—taking its greatest dive since the 2008 financial crisis. I felt like I was going to throw up. Not for my own non-existent stock portfolio, but for the impact that this could have on investor confidence. What a time to be alive (and asking for money).
Given that uncertainty is the natural enemy of investors, I figured VC’s would immediately zip up their purses and wait for the situation to play out. For startups who are currently raising, that’s a big problem. Fuelled with speculation, some founders might panic and accept much lower valuations in the rush to raise cash. Even worse, some might not have the runway to survive over the next few months, and risk burning out of resources altogether if they fail to secure capital…Read more…