HANDSHAKES WERE SCARY, NOW BLEAK TOO

Can you imagine, talking to an AI bot, getting your documents verified, maneuvering through the terms, negotiating the price over their algorithms and closing a deal and yet not shake hands.

Well, then how do we conduct business in times when we are barely stepping out of our cocoons. Though technology and remote work services have kept things rolling, but they can never substitute the touch and vigor humans bring to the table. These are stress test times for the established and an opportunity ground for the one budding to demand profiles. One of the biggest hurdles smaller companies encounter is the lack of buffer cash which makes them and their payrolls highly vulnerable to exogenous factors. Founders and CEOs have probably lead all fronts from marketing to finance to supply chain, but in these turbulent times, they are no less than a firefighter trying to rescue victims.

We wonder does the concept of bottom fishing apply to the M&A space as well, do larger companies buy tax shields. The theme of value investing has gained traction in capital markets, but given the limitation of audited data for startups, it is extremely tough to hit the dart in the eye.

As Private equity investments are highly leveraged, the lower interest rate environment urges betting riskier, but the demand landscape had turned them skeptic of the growth potential when the markets are in full gear. Companies that drive value primarily from the future cashflows can be hugely impacted, with no certain time horizon for recovery.

Ventures shall perhaps foresee changes in consumption patterns that would follow from the learnings of the pandemic, and modulate their product offerings accordingly. Distance learning, commuting patterns and online healthcare facilities can bring a host of opportunities. A triple convergence of Brexit, the U.S. China trade war and now Covid-19 could reshape the world’s manufacturing supply chains. As we have seen that every big global crisis, changes the way we work, trace and travel. We might see new business and financing models emerge out this time.

We believe that one of the keys things to succeed post crisis would be the ability to quickly adapt to the changes in the business ecosystem as the recovery will give immense opportunity for businesses to front run innovations.