5 Min ReadBusiness 22 May 2020
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Q1: Is it even feasible for startups to think about fundraising during this time?
It's feasible, but it will be challenging, and it really depends on the kind of business you want to start. Long before this crisis, I always advised entrepreneurs to pursue organic funding: start out small with low overhead, grow your client base, focus on the work, and put everything back into the business so that you can grow it healthily and sustainably. It demands a lot of work, but it also frees you from having to rely on outside funding. If your circumstances allow it, this is, in my opinion, the best way to start a business (it's how I started mine).
That said, for many startups, other funding options will be necessary. For reasons having nothing to do with the pandemic, venture capital was already far more suspicious of startups that don't have a clear path to profitability in their prospectus, and the current crisis American capitalism is experiencing has only reinforced that newfound conservatism.
I always advised entrepreneurs to pursue organic funding: start out small with low overhead, grow your client base, focus on the work, and put everything back into the business so that you can grow it healthily and sustainably.
The last few years and the felling of companies like WeWork and Theranos have made it much more difficult to get funding for a big ambitious moonshot with only a lofty dream and a model, but no viable business plan or sound financials (something that was already less likely for women founders). The question is no longer, "What's your exit strategy?" but rather, "How will investing in your startup strengthen my long-term?"
Now, all of that out of the way, the fact that this is a risk-averse market doesn't eradicate the ambition that many venture capitalists harbor for the big payout; it just makes it harder to justify. But the upside is that it demands you to be better. To think through your business plan ahead of time. Now is a very good time to perfect your plan and your pitch and be ready to hit the ground running.
I won't throw numbers at you, but when it comes to securing VC dollars, women-led startups have always had a tougher fight, which is why considering other funding avenues is a good idea. Some businesses, for example, may have more funding success through equity crowdfunding.
Now is a very good time to perfect your plan and your pitch and be ready to hit the ground running.
This will be a bit different for businesses that emerge to fill the glaring gaps that the pandemic has opened up. I would anticipate funding to be more available, for example, for startups that cover critical healthcare or service gaps that have emerged since lockdown started. I keep thinking of the need to bring medical equipment manufacturing back to the United States, how overwhelmed grocery delivery services have become, the lines stretching outside the retail operations that are still open, the shortages and supply-chain disruptions we're facing, and even the future of film distribution; all of these are potential profit opportunities because these are problems we didn't know to expect, which means service is still catching up. There are countless more, and an enterprising mind that finds a way to alleviate these pain points is going to find eager money.
Q2: How should VC-backed startups start preparing for the post-coronavirus era?
I expect that the post-coronavirus world of venture capital is going to double down on its present investment conservatism, including for existing startups. I am especially worried about startups promising things that they can no longer guarantee. What's a dating app, for example, in a world where we're reluctant to meet? So, I expect that keeping funding incoming is going to have two primary requirements:
- A clear path to profitability, not just a sale.
- An understanding of how your market and audience have changed during the lockdown.
As I mentioned in the today's first question, nobody wants to be caught on the hook for another WeWork or Theranos, companies utterly dependent on continual investment to maintain cashflow while failing to deliver or turn meaningful profits because the risk of collapse – especially with "visionary" founders – is too great. So being able to show that your company is a strong investment for the long haul is going to be more critical than ever.
We have no idea how long this will last, so we can't necessarily anticipate how far away we are from a post-pandemic economy, and even then, the psychological effects of this experience will continue well into the future in one form or another.
But the second requirement is even more critical: Does your product still make sense in the post-pandemic economy, and if not, how can you make it make sense? I mentioned dating apps above because no comprehensive pandemic dating solution has emerged and finding a way to ensure people can meet and couple safely is likely going to remain a demand for some time.
We have no idea how long this will last, so we can't necessarily anticipate how far away we are from a post-pandemic economy, and even then, the psychological effects of this experience will continue well into the future in one form or another. I think about how people who lived through the Depression retained, for decades afterward, Depression-related habits from mistrust of banks to saving every ounce of grease and oil they can.
That's going to have knock-on economic effects, especially in terms of what your customers may want or need from you. Preparing for the future means coming to understand who your customers are rather than who they were, what their new pain points are relative to the service you offer, and solving those. In other words, you will need to be adaptable.
Preparing for the future means coming to understand who your customers are rather than who they were, what their new pain points are relative to the service you offer, and solving those.
That, more than anything, is what VC is going to want to see from their existing investments: a practical demonstration that they will not be throwing their money away by continuing to support you.
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5 Min Read
You may recognize Judge, Tanya Acker, from her political and legal commentary on different networks and shows like Good Morning America, The Talk, Wendy Williams, CNN Reports or The Insider. Acker is more than an experienced commentator. She is also a Judge on the fifth season of Emmy nominated CBS show, Hot Bench.
The show, created by Judge Judy, is a new take on the court genre. Alongside Acker, are two other judges: Patricia DiMango and Michael Corriero. Together the three-panel judges take viewers inside the courtroom and into their chambers. “I feel like my responsibility on the show is, to be honest, fair, [and] to try and give people a just and equitable result," Acker says. She is accomplished, honest and especially passionate about her career. In fact, Acker likes the fact that she is able to help people solve problems. “I think that efficient ways of solving disputes are really at the core of modern life.
“We are a very diverse community [with] different values, backgrounds [and] beliefs. It's inevitable that we're going to find ourselves in some conflicts. I enjoy being a part of a process where you can help resolve the conflicts and diffuse them," she explains.
Acker's career has been built around key moments and professional experiences in her life. Particularly, her time working right after college impacted the type of legal work she takes on now.
Shaping Her Career
Acker didn't foresee doing this kind of work on television when she was in college at either Howard University or Yale Law. “I was really open in college about what would happen next," Acker comments. “In fact, I deliberately chose a major (English) that wouldn't lock me into anything [because] I wanted to keep all of my options open." Her inevitable success on the show and throughout her career is an example of that. In fact, after graduating from Yale, Acker served as a judicial law clerk to Judge Dorothy Nelson who sits on the Ninth U.S. Circuit Court of Appeals.
It was not only her first job out of law school but also one of the formative experiences of her professional life. “[Judge Nelson is] certainly, if not my most important professional influence," Acker says. “She is really the living embodiment of justice, fairness, and believes in being faithful to the letter and the spirit of the law," she exclaims. “She delivers it all with a lot of love." Judge Nelson is still on the bench and is continuing to work through her Foundation: The Western Justice Center in Pasadena, California, where Acker serves on the board. The foundation helps people seeking alternative ways of resolving their disputes instead of going to court.
"I enjoy being a part of a process where you can help resolve the conflicts and diffuse them," she explains.
“It was important to her to try and create platforms for people to resolve conflict outside of court because court takes a long time," Acker explains. “I'm proud to be a part of that work and to sit on that board."
After her clerkship, she was awarded a Bristow Fellowship and continued building her career. Outside of the fellowship, Acker's legal work incorporated a broad variety of matters from civil litigation, constitutional cases, business counseling, and advising. One of her most memorable moments was representing a group of homeless people against the city. “They were being fought for vagrancy and our defense was, they had no place to go," she shares.
As part of her pro bono work, Acker was awarded the ACLU's First Amendment Award for her success with the case. Though, she has a hard time choosing from one of many memorable moments on Hot Bench. Acker does share a few of the things that matter to her. “Our show is really drawn from a cross-section of courtrooms across America and the chance to engage with such a diverse group of people really means a lot to me," she discusses.
How Did Acker Become A Judge?
In addition to Judge Nelson, Judge Judy is certainly among her top professional influences. “I think it's incredible [and] I feel very lucky that my professional career has been bookended by these incredible judges," she acclaims. “I've really learned a lot from Judy about this job, doing this kind of job on television." Before Acker was selected for Hot Bench, she hadn't been a judge. It was Judge Judy who recommended that she get some experience. Acker briefly comments on her first experience as a temporary judge on a volunteer basis in traffic court. “I was happy to be able to have the chance to kind of get a feel for it before we started doing the show," she comments. “Judy is a wonderful, kind, generous person [and] she's taught me quite a lot. I feel lucky."
Photo Courtesy of Annie Shak.
Acker's Time Away From Home
Outside of Hot Bench, Acker took recent trips to Haiti and Alabama. They were memorable and meaningful.
Haiti, in particular, was the first trip she excitedly talks about. She did some work there in an orphanage as part of LOVE Takes Root, an organization that is driven to help children around the world whether it's basic aid or education. “Haiti has a special place in my heart," she began. “As a person who's descended from enslaved people, I have a lot of honor and reverence for a country that threw off the shackles of slavery."
She was intrigued by the history of Haiti. Especially regarding the communities, corrupt government and natural disasters. “They really had to endure a lot, but I tell you this when I was there, I saw people who were more elegant, dignified, gracious and generous as any group of people I've ever met anywhere in the world," she goes on. “I think it left me with was a strong sense of how you can be graceful and elegant under fire." Acker is optimistic about the country's overall growth and success.
“[Judge Nelson is] certainly, if not my most important professional influence," Acker says. “She is really the living embodiment of justice, fairness, and believes in being faithful to the letter and the spirit of the law."
“There are certainly times when people treated me differently or made assumptions about me because I was a black woman," Acker says. “I've got it much better, but that doesn't mean it's perfect...it certainly isn't, but you just have to keep it moving."
Her other trip was different in more ways than one. She traveled there for the first time with her mother as part of a get out to vote effort, that Alabama's First black House Minority Leader, Anthony Daniels was organizing. “It was incredible to take that trip with her [and] I've got to tell you, the South of today is not the South of my mother's upbringing," she explains. Originally from Mississippi, Acker's mother hasn't been back in the South since 1952. “Every place has a ways to go, but it was a really exciting trip [and] it was nice for me to connect with that part of the country and that part of my history."
Overcoming Racial Barriers
As a black woman, Acker has certainly faced challenges based on her race and gender. But it doesn't define who she is or what she can accomplish. “There are certainly times when people treated me differently or made assumptions about me because I was a black woman," she says. “There's no sort of barrier that someone would attempt to impose upon me that they didn't attempt to impose on my mother, grandmother or great-grandmother." In a space where disparity is sometimes apparent, she recognizes that there is no barrier someone would try to impose on her that they didn't attempt to impose on her mother or grandmothers. “I've got it much better, but that doesn't mean it's perfect...it certainly isn't, but you just have to keep it moving," Acker states. The conversation continues truthfully and seriously. Acker shares what it can be like for black women, specifically. “I think we're underestimated and we can be disrespected, whereas other folks are allowed the freedom to enjoy a full range of emotions and feelings," she articulates.
At times black women are often restricted from expressing themselves. “If someone wants to make an assumption or jump to a conclusion about me because of my race or gender, that's on them, but their assumptions aren't going to define me," Acker declares. “If something makes me angry or happy I will express that and if someone wants to caricature me, that's their pigeonholing; that's not my problem." A lifelong lesson she learned and shared is to not let other people define who you are. It is one of three bits of wisdom.
Three Pieces Of Advice From Judge Acker
The Power Of Self-awareness
“It's really important that you have a really firm sense of what you want to do and be, and how you're moving in the world because when people try to sway you, judge you or steer you off course you've got to have some basis for getting back on track."
Know Your Support System
“Have a strong community of people who you trust, love and who love you," she advises. “But also learn to love and trust yourself because sometimes it's your own voice that can provide you the most comfort or solace in something."
Learn From Your Experiences
“Trust yourself. Take care of yourself. Don't be too hard on yourself. Be honest with yourself.
“There are times when it's not enough to say this is who I am. Take it or leave it. Sometimes we've got things that we need to work on, change or improve upon," she concludes.
Acker stands out not only because of her accomplishments, but the way she views certain aspects of her life. These days, she's comfortable accepting what makes her different. “I think there's a time when you're younger when conformity feels comfortable, [but] I'm comfortable these days not conforming," she laughs. She enjoys being a decision maker and helping people work through it on Hot Bench.
This article was originally published May 15, 2019.