A Venture Capital (VC) is “a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.” There are a few ways the success of these firms can be measured, one of the most utilized one being the Investment to Exit ratio.
Due to the coronavirus pandemic, as with many other businesses, some VCs struggled. Given that VCs primarily invest in startups (which was one of the worst hit industry), it was not surprising that many were working at a much lower investment pace than in previous years. On the flip side of the coin, there were companies who ordinarily would have found it easier to gain investments but given the uncertainty it was harder to get a VC to take a risk.
In recent years, MVK Ventures SARL has become a leading Venture Capital firm. The firm invests in startups in a variety of industries with a focus on biotech. Founder and CEO of the firm Mozes Victor Konig believes that the pandemic definitely played a part in a lowering of confidence on the part of VCs to invest and more so, on start-ups seeking to, well, start up!
“What I found,” Konig recalls “was that people’s confidence took a real hit. For an innovator who was teetering on the edge of shall I, shan’t I with regards to launching a business, it was definitely more of a case of, no, I shan’t,” he explained.
“Having said that, you got the flip side of the coin where people had lost their regular, secure 9-5 jobs and figured, ‘what can I lose? It’s either now or never,’ but banks were less willing to come and help,” he added.
And that is where MVK Ventures SARL stepped in, adopting the role of connector between the start-up and the banks, based on Konig’s own business experience of when he first entered the industry.
We are still a long way from an economic recovery but there is definitely a higher degree of confidence among potential innovators, start-ups, VCs and even banks.