Russ Heddleston, CEO of DocSend, looks to a post-pandemic future
Russ is the co-founder and CEO of DocSend. Previously, he was Product Manager at Facebook, where he arrived through the acquisition of his startup Pursuit.com, and has worked at Dropbox, Greystripe and Trulia. Follow him here: @rheddleston and @docsend
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What second-quarter fundraising data tell us about the rest of 2020?
The third quarter of 2020 is an intense shopping season for VCs
At the end of 2019, nobody would have predicted what an unpredictable and difficult year it would be for both startups and VCs in the fundraising world. Now we are staring at the end of 2020 and looking at what we all hope for a better and safer 2021. What will this new year bring? With a year-end sprint to close deals, the expectation of a new presidential administration, and the hope of a COVID-19 vaccine on the horizon, startups and VCs know that change is on the horizon – but how much of it will change be positive?
As 2020 has proven, no one can say for sure what 2021 will bring, but I want to put some predictions on the table based on DocSend's data and research, including the DocSend Startup Index, as well as some trends I've seen and my own experiences. These predictions focus on how we will raise funds after the pandemic, how funding sharing may widen for some, what fundraising drives might look like through 2021, some sectors we think will do well, and some tips on how you can be successful new year no matter what comes our way.
We will interact through a mix of the old and the new
The pandemic forced all of us to drastically change the way we work and how we deal with colleagues and customers. Once the pandemic has subsided and vaccines become widespread, face-to-face and office meetings will definitely resume, but it's safe to say that the old ways of networking and fundraising won't shift 100%. Founders and VCs have mastered the ups and downs of remote networking and fundraising interactions and will stick to what works and what doesn't.
Is traveling to a conference the best way for a founder to have the opportunity to meet the VC who is right to be supporting their business? Would a VC want to drive through Bay Area traffic for an hour to see in person about their latest investment? Zoom fatigue aside, video conferencing has some advantages – efficiency, no travel time – although not all meetings are best conducted virtually.
Regardless of what 2021 has in store, founders can still take proactive steps to make their fundraiser successful.
The extent to which companies are present in person or stick to virtual meetings can directly depend on the fundraising round they are working towards or have completed. Companies in the pre-seed round may hold more Zoom meetings to save resources.
The founders of the starting round are likely to be split between video and face-to-face meetings as they are under pressure to show traction in this round, as we noted in our seed-collecting report, but also need to save resources and time. For Serie A, they may need to meet less face-to-face because they've built relationships with their investors. Series B may have more face-to-face meetings as the business has reached a level of complexity that is difficult to communicate over a deck or video conference.