Doing Deals from the Basement: VC during Covid

EduLab Capital Managing Partner, Liam Pisano, deploying capital from his basement

Pisano observes, “Since coronavirus, a majority of our portfolio companies have found a way to touch more lives and increase their own impact on the education ecosystem.”

For example, Riipen, a two-sided marketplace that connects employers and students for project-based, industry-driven learning experiences, adapted its product to provide virtual internships. Covid has led to a spike in demand and expansion opportunities in Canada and the U.S.

The remote work lifestyle forces us to pause and prioritize

Pisano recalls his previous pace of life in one word “movement”. He was always on the move, traveling to visit existing or prospective portfolio companies, traveling to meet with international partners, traveling to develop the fund.

Conducting Due Diligence via Zoom

With three active deals underway, business may not be as usual for ECP, but it has certainly not slowed down since the onset of coronavirus in March.

“It is nearly impossible to get someone’s full attention for longer than a few hours on Zoom,” says Pisano.

“In normal circumstances, I would go to an office and visit a founder, spend the day with them. Walk around the physical facility. Go out to lunch. Meet a few of the team members. That’s why I do this job; you get a lot from those interactions. Now we are at a disadvantage for knowing how a company really works.”

Derecho points out, “Even if all of this is true, does this [remote process for relationship-building] change outcomes? It is too soon to tell. It is new for everyone in the industry.”

We do know that global start-up investing has slowed down. According to Crunchbase, in Q2, the first full quarter affected by the pandemic, startup funding in the U.S. and Canada dropped 12% to just under $30 billion from the first quarter, down 18% from the same time last year. This trajectory continued through Q3, with early-stage funding down to $19.3B, still down 18% year over year. Seed funding was down 32% year over year.

Team Dynamics

From an internal perspective, remote work has reshaped the team environment as well.

On the flip side, Derecho highlights the autonomy allowed for in this new normal. “We have done away completely with this notion of face time — people feeling that they should be at work while their supervisor is there.”

Of course, with this shift to a less structured and largely invisible workweek, self-motivation is key.

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EduLab Capital

EduLab Capital

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EduLab Capital Partners is a VC fund that invests in early stage, education and workforce technology companies to scale measurable impact in our communities.