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How Do We Keep Investments Going?

Published on 24 March 2020

The business community is taking drastic measures in defense against the spread of the novel COVID-19; in-person meetings have lurched to a halt and companies are scrambling to operate in teams remotely and maintain business as usual.

 

Some professional investors are speaking out on how digital dealmaking tools have been improving their business for years by:

  • Helping them find investments outside of their direct network;
  • Helping them find investment companies in different geographical locations;
  • Reducing travel time and wasted resources on in-person meetings; and
  • Reducing snap judgment heuristics about opportunities based on appearance, and instead focusing on the quality of the pitch.

 

While removing visible heuristics is a new concept and methodology to the investments industry, which has long eschewed too much change too fast, these concepts have gained some recent traction in other areas. The Voice has been a well-received singing competition for over 10 years where competitors are judged on voice alone and is viewed by all ages franchised in 145 countries/regions. Netflix’s Love is Blind, where suitors meet and get to know each other without ever seeing what the other looks like, has been receiving recent accolades and spin-off web dating applications are developing. Arguably the concept is less novel to snake person investors who grew up on ICQ and text message, and to whom data analytics is second nature.

 

Some of the useful tactics for digital fundraising we have seen include:

  • Using DealMaker’s CRM functionality to manage the investor pipeline and the investor journey. DealMaker links can be embedded in text, email or Webinar communications.
  • Transforming all collateral to be digital-first, and including a DealMaker magic link behind an “invest now” button. 
  • In times of uncertainty, prospective and existing investors will benefit from frequent, timely touchpoints and updates. DealMaker’s investor details page tracks interaction and responses to these updates, so you know what communication is effectively moving investors through the funnel. 
  • Increasing team engagement and minimizing back and forth by ensuring all team members have access to information on investors and raise progress. Encourage team members to log in regularly and enable daily deal status digests.

 

Last week COVID-19 sparked the proposal of a new bill in US Congress that would remove offering ceilings in Regulation Crowdfunding (Reg CF) and Reg. A+ for small businesses developing a vaccine for COVID-19, increase access to capital for small businesses through micro-lending, and allow equity compensation for those employed in the gig economy. Recent Canadian proposed changes to the Crowdfunding regime are similarly aligned.

 

"We can't take on a new threat with old tactics," said Congressman McHenry. "We need whole-of-government solutions that embrace our technological capabilities and support what separates our nation from the rest-our small businesses, innovators, and entrepreneurs. By making small regulatory changes we can unleash the power of our private sector, providing support to job creators and American consumers in this uncertain time."

 

As we take social distancing measures, we are challenged to find new ways to unite as a global community towards a solution. Technology has the ability to increase the sophistication with which we operate. Many of today’s technology giants were forged in recessionary times, and it is evident already that successful companies and businesses are taking the necessary steps now to secure their future and keep their workforce safe.