Thank you for taking the time to share tips, insights and advice with us. For those who might not know, could you briefly introduce yourself and the Nation 1 VC fund?
Martin: Sure, my name is Martin Bodocký, I am the Co-Founder and General Partner in Nation 1 VC fund, we are general purpose fund, investing from the very early stage till post-seed stage. In amounts between 45K Eur and 1,5Mil Eur. The sweet spot for us is well balance and fully committed team with early traction of their product. Personally I don’t have a background in finance or business administration, I have started my career in the software development field and later fall in love with the investing, initially into public companies and last two years predominantly into private venture capital deals.
How is Nation 1 VC preparing for the upcoming months?
Martin: I should say, we have been more active in the past month compared to the time before the corona pandemic. Especially, we were analysing our current portfolio companies which are all fine for now.
By saying that, we are ready for opportunities which awaiting for us, our deal flow is strong and we are open for business. We don’t do any special preparation, just open our mind and ready to work.
What’s going to change in the VC market in general after Coronavirus-times?
Martin: Honestly, I don’t know we don’t know how long it will last when all restriction is lifted. We don’t mind to work remotely, and having an initial conversation as well as more deep due diligence with the potential investments. I strongly believe that this more opportunity than a drawback to showing we can work also effectively form any place and any time zone. Disclaimer, I have used to work remotely for 5 years so I am very used to that.
I cannot speak for others, but VCs should be adaptable as much as their portfolio companies, and I see that Nation 1 is that.
Startups might find it difficult to raise capital with recession warnings. What's your opinion or advice for them?
Martin: I do believe that if a company are serving an important need for their clients, there won’t be a problem to raise capital even in these days. The world didn’t stop it just moving a little bit differently. Probably there is nothing like as it uses to be.
Startups can expect that funding time can double due to more thinking on the side of VC, many of us know the feeling of missing out (FOMO) and we will consider much more if certain project really delivering the strong moat. With this comes also an expectation for the deal terms such as valuation or liquidation preference.
The best advice is to stronghold your core team, cut the unnecessary spending and be prepared for harder times.
Are drastic cuts expected for most of our Czech Startups?
Martin: This is a very hard question, in general I would say yes, all small companies (not just start-up) are facing drop in their activity. Nevertheless, it depends on the particular company. Let’s say the company which is small and running very lean and diligently, and serving an important need to their clients, can expecting also a huge grow than cutting. On the other hand, the company which over hired and overspent for the ease of future expansion can be on the edge of insolvency and will need to cut very hard and very quick.
For many companies, this is the right to show to their clients as well as to their investors if they have been the right investments.
Which leadership skills do you think are most important for a Founder/CEO ? Which skills CEOs can work on even more right now and which skills are most important in this uncertain situation?
Martin: The most important skill of the CEO anytime is the focus, and your focus needs to be on three things, your clients, your company and yourself. Ask yourself, what is the most important service I offer and make sure that it is provided. Secondly ask, what is the most important team members and expenses to fulfil that service and cut the rest tell them straight what is your focus and move on. Lastly, you need to focus on yourself as well, otherwise your company will not survive, so make sure you are healthy on a physical and especially mental level now.
What advice would you give startups now to keep their head above the water?
Martin: As I mentioned here, and I will say it little differently, you need to more than before to look at your company and heartlessly cut what is not important for the next 6-9 months, forget about the items like PR, nice office personal assistant and similar luxury. The best and strongest companies are those which will survive any storm and this storm is here and maybe is not moving, for now, so stay put and build umbrellas.
Final words for those chasing the startup dream?
Martin: As a cliche goes, there is no better time to start a new company than now, and it’s not a cliche, it is very true, today can be the best time also you can see quite clearly what is really bothering people and what products are needed from tele-health services, micro-loans, keeping the relevance of the manufacturing, virtual reality and much more. Even if you don’t have a technical background, to build an MVP a go out to collect feedback. There are numerous grants to help you get some money even you are doing is as part-time in the beginning. And when you find first customers shoot me an email ;)