“Due to the crisis of COVID-19, some investors have stepped out of the project, freeing up space for new investors. That’s why I’m contacting you today.” This is a message Verve Ventures has received from an entrepreneur in Belgium, and it is not the only one.

Many venture capital funds are in “Let’s wait and see” mode now. We experience that they are hesitant, which slows down financing rounds in the making. The funds want to have a bit more visibility on the economic repercussions of the pandemic on existing portfolio firms before they commit capital to new ventures again. There is nothing wrong with this approach.

But this also means that if you are ready to invest now, in a time of heightened uncertainty, you’ll get very attractive deals handed to you on a silver platter.

Physical meetings are impossible still, and many VCs are reluctant to invest in a team they have not met in person. At a time where people don’t want to leave their house, the strength of Verve Ventures’ all-digital investment model becomes apparent. Investing and signing contracts can be done without shuffling paper or a visit to the post office. It is also a time where the years we spent building a large investor base pays dividends.

Our deal-by-deal model accommodates each individual investor’s appetite for risk

First, because our deal-by-deal model accommodates each individual investor’s appetite for risk and does not depend on the central decision of a fund manager. Our private investor team is in close contact with our investor base. It can deduce the willingness to invest in several ways, either by looking at the number and volume of individual investment, by asking directly in private conversations and by online polling. We have done all of that and discerned several ways in which people have reacted to the crisis.

Very few investors have declared that they put their startup investing completely on hold. They first want to see how the situation pans out, even if they miss out on investment opportunities. The good news for them: they still have access to the high-quality investment proposals we send them about every new deal without paying any fees. They can continue to stay informed about innovation and entrepreneurship, and plug back in once they feel confident enough.

Another rather smallish group are investors who say they’re going to reduce new investments in favor of reinvesting in their portfolio companies. They have heeded the advice that one should reserve a portion of one’s investment allocation for follow-on rounds, and this is the lifeblood for startups. Some of them are struggling right now, and their shareholders know that. Financing them through a crisis is what real startup investors should mentally be prepared to do, also to protect their initial investment, so that the startups may flourish again when the crisis abates.

The largest part of investors (more than half) say that they’re going to be more selective about new investments going forward. The pandemic has heightened their awareness about the importance of life sciences in general and given a large boost to digital solutions. Their selectiveness stems from the realization that startups address the pressing needs of society and that they need time to thrive. If they invest now, they invest for the next years, not the next months.

A third of our most active investors have said that they will continue to invest as planned through the year. This is a clear indication that they believe in the potential of startups to solve problems that are very relevant to society, and that they trust Verve Ventures to present them the most promising startups. Continuing to invest with a budget that suits them brings them closer to their goal of building a diversified startup portfolio, no matter if they’ve earmarked a small five-figure number or a large six-figure number. They’ll have a large choice, too. In addition to the two dozen or so new deals we’re going to present on our digital platform this year, there will be at least as many from our portfolio startups. Quite a few of them want to delay bigger financing rounds until 2021 and do smaller bridge financing rounds instead. This offers an entry point for sanguine new investors.

The big advantage of Verve Ventures’ model is a direct result of the aforementioned different investor views and appetites. The large variety of backgrounds of the investors in our network means that if they pass our investment committee, high-quality startups from a wide range of industries will get funded by Verve Ventures going forward, as they have in the past. In the first 4 financing rounds we presented on our platform after the corona-crisis started, 2 received investment interest of more than CHF 1 million, and the two other more than CHF 2 million. In fact, the last two weeks have been our all-time strongest weeks in terms of investment interests and commitments. In total, Verve Ventures has invested more than CHF 100 million since inception.

The last two weeks have been our all-time strongest weeks in terms of investment interests and commitments.

The repercussions of the crisis and the economic downturn on startups are severe, as we’ve found in this analysis of our portfolio firms. But no virus weakens human ingenuity. We are of the firm conviction that there are ample investment opportunities in Europe now. With clients big and small becoming more hesitant to buy or invest in projects, it becomes harder to sell anything. In these times, you can only convince with a product that has unmistakable advantages over anything else. And we’re happy to finance these companies and give our investors the opportunity to invest in them.

This model resonates well with investors, be they experienced business angels wanting to internationalize their deal-flow or completely new to startup investing. We continue to see new investors register on our platform every week. The larger our investor community gets, the more international and diverse, the better for all other investors and startups. The aggregate potential to raise money grows, and so does the smartness of a large diverse international network.