Skip Simms oversees all of SPARK’s entrepreneurial activities including its capital programs. He was the architect of the Michigan Pre-Seed Capital Fund co-investment program, the multiple microloan programs managed by SPARK, and is the managing partner of the Michigan Angel Fund.
This is a follow-up to a previous Startup Wellness Check. Read the results from the Q2 2020 study.
How do you think the tech-based startups and early stage companies in the area are doing in 2020? Would you guess they are really struggling? Do you think they are having trouble making sales or even getting sales meetings and opportunities? Are they able to raise more capital right now?
As an investor, I am selfishly interested in the answer to those questions. So, as the third quarter came to an end, I created a short survey and sent it to the Michigan Angel Fund portfolio of companies. Eighteen CEOs replied almost immediately. (Good practice when communicating with your investors.) If you thought the responses would be doom and gloom you would be wrong — 2020 is turning out to be a growth year.
We asked seven simple questions. Here are the results.
- Fifty-six percent of the companies have more employees today than that had at the beginning of the year. About a third have fewer.
- Sixty-seven percent say they are hiring and will have more employees in the next six months. Thirty percent said they would have about the same. Only one company expects to have fewer.
- Here’s a surprise: One company has all their employees back in the office or lab. Almost 90 percent have employees working totally or mostly remotely.
- Sales: 78 percent of companies have increased revenue vs 2019. Only 11 percent have lower sales.
- Think raising capital right now is hard? Two-thirds of our portfolio companies have raised additional capital since March, and the other one-third expect to raise more capital in the next six months.
- Bonus question: What online platform are you using for your virtual calls and meetings? Eighty-two percent responded Zoom.
I’m very proud of how our company leaders have adjusted to the challenges the pandemic has wrought on all of us. It’s during challenging times like this that you can embrace opportunities to get stronger. 2021 may turn out to be an awesome year.