How have we been dealing with Covid-19 as a Start-up company?
The pandemic that hit Ireland in March 2020 has completely changed our world. As a start-up with only 5 team members made up of 4 founders who were undergraduates in their final year, and the 5th was part-time undergoing her PhD. July of 2020 was the first time that the founders were able to begin working full-time with no more university and or part-time jobs. Since then, Micron Agritech has grown from a 5-member team all working part-time to a team of 10 people. The company also announced the closing of a €500,000 seed round in December 2020. In that time, we have also completed three revisions of the company’s first product, Micron Kit, and has tested these on farms, Completed a clinical trial involving 10 Irish farms and 500 cattle where a total of 1,000 faecal samples were collected and tested. And won Best Early-stage Start-up at the National Start-up Awards.
All of Micron Agritech’s growth so far has occurred from March 2020 to March 2021. We had started talks with potential investors in late 2019 and in early 2020 we began more serious discussions with investors. From this time, we were negotiating terms for a funding round with all interested parties until November when we announced the closing of the €500,000 seed round in a press release. Not only was this the first time the Micron founders were raising a seed round, but they were also tackling this new experience during a global pandemic.
“(Brian) Caulfield note(s) that the number of companies raising funds declined by more than 20pc in H1 of 2020, compared to H1 of 2019. The number of start-ups raising investment for the first time fell by almost 60pc and rounds of less than €5m were down 50pc.” – Silicon Republic
“One of the largely untold or unrecognised areas where the impact is being severely felt is among young start-up companies who are particularly sensitive to economic shocks.” – Thinkbusiness.ie
But what does a funding round in a pandemic really look like:
We are all too familiar with the new norm of Zoom meetings. But how did this affect us seeking funding?
Firstly, we had initially started looking for investors that were interested in funding the business through attending trade shows and networking events. Then Covid happened. Going into lockdown meant we no longer were able to meet the investor’s person. Nearly all the conversations with interested parties were held over zoom calls. The silver lining here was that we found ourselves with a lot of extra time to work on the business by avoiding traveling for meetings.
But what does this mean?
Meetings have changed from an in-person full-day event with tea, coffee, and the works to a less formal online chat with everyone joining in from the comfort of their own home. So, with the pressure of travel and meeting face-to-face gone, calls were then shorter and it was much easier for investors to ask for another meeting for deliberations due to uncertainty. This new environment caused more doubt and hesitation than what we expect would have happened in a normal economic climate.
Any founder will tell you that funding rounds can take up a lot of time, especially after the terms are agreed and it’s then all about signing off and settling on the fine print for all the legal contracts. Overall, all the delays caused by Covid led to the final closing of the round to drag out 5-7 months longer than we would otherwise expect.
On a more positive note,
With these online meetings, we are now able to be much more productive with our time. is now much easier to find suitable times to arrange meetings. It is also much easier to have multiple meetings on the same day with people from completely different parts of the world and hop from one call to another with the click of a mouse instead of hopping in the car or on a plane.
Since online meetings are now the norm, it has been easier to connect with different people and companies from around the world and expand our network without the hassle of traveling to conferences or events.
This new economic climate was scary, and it also caused a lot of delays. But another positive to come out of it has been the increase in government support for early-stage start-up companies. With various new funding supports in place, there are more opportunities to cover any losses or delays that have been caused because of the pandemic, such as the Employment Wage Subsidy Scheme put in place by the Irish Government.
We were fortunate to be awarded HPSU (High-Potential Start-Up) status by Enterprise Ireland in June 2020, meaning they could match-fund any private equity funding we raised as part of the seed round. In early 2020, we had previously received Competitive Start-up Funding (CSF) from Enterprise Ireland. It is generally rare for a start-up to receive HPSU status so soon after being approved for CSF, but we are thankful the Enterprise Ireland acted quickly to give us and other early Irish start-ups the support needed to survive the pandemic.