From The Investor Desk: Pact VC’s Lucy Chow On What MENA Founders Should Prioritize Amid Market Shifts
“I advise all SME and startup founders to focus on riding out the long-tail effect that this geopolitical situation will have on their businesses.”
Amid shifting regional dynamics, From The Investor Desk is an editorial series by Inc. Arabia bringing together perspectives from across the capital ecosystem in the MENA and beyond, which, we hope, gives founders valuable insight into how those allocating capital in the region are interpreting risk, resilience, and opportunity in the current landscape.
In this edition of From The Investor Desk, we spoke to Lucy Chow, a Limited Partner at London-headquartered early-stage investment firm Pact VC, who shared practical steps that entrepreneurs can take to steady their businesses during this period. Here are her notes:
1. Think for the long term.
“I advise all SME and startup founders to focus on riding out the long-tail effect that this geopolitical situation will have on their businesses. Mentally prepare yourselves, and strategize ways for your company to ride this out. This would include providing unpaid leave for non-essential staff, and/or voluntary resignation for staff who may wish to leave and not return to the region. In order to stay lean, ensure all options are clearly communicated, and staff are constantly kept in the loop about the internal operations of your company.”
Lucy Chow, Limited Partner, Pact VC. Image supplied.
2. Keep cash flow front of mind.
“It’s hard to know how long your business will be impacted due to the regional conflict. Therefore, it makes sense that you spend this time chasing all outstanding accounts receivables. Conversely, you should negotiate extended payment terms with any suppliers or contractors. You may even need to hold off on contracting with specific suppliers during the current period. However, keep them updated, and assure them things will resume once things are normal again. Again, communication is key, as it also gives your suppliers transparency into your current situation and vice versa.”
3. Plan for interim funding.
“Businesses that were on the cusp of getting funding are likely being told that all is on hold now. In such a scenario, I suggest that they approach potential funds, angels, friends, family, clients, and customers, and engage them all. Ask for temporary bridge loans if required. Put together a strategic presentation that outlines how you plan to get through this difficult period, what bridge funding is required, as well as a few scenarios of how you plan to mitigate costs.”
