Robert Whitby-Smith, AlbionVC partner on the importance of resilience post covid
Robert Whitby-Smith, AlbionVC partner chats with Sebastian Klovig Skelton, Computer Weekly about the importance of resilience for start-ups during the post covid-19 recession.
Technology startups should prepare for the looming post-Covid-19 recession by building up their resilience to resist unattractive acquisition bids.
According to Robert saying no to potential acquirers with a big cheque relative to the stage of the business is always a problem for startups, but even more so in a recession.
“Everyone’s a bit more nervous, concerned what the outlook will be, and so things are much more opportunistic,” said Whitby-Smith, adding that shareholder alignment and long-term partnerships were good tactics for startups to adopt in the face of this challenge.
To avoid a “situation of vulnerability”, Whitby-Smith further suggested that startups should be building their “runways” – the idea being that increased financial security can give startups more room to manoeuvre in difficult situations.
“It won’t be right for everyone, but try to ensure you’ve got 24 months of your monthly burn sitting on your balance sheet, so if you’re losing £100k a month, have 24 times that sitting on your balance sheet,” he said.
Full interview on Computer Weekly here.