For companies, crises are defining moments: They must prove that their business model is both sustainable and robust. And now, more than ever, they must deliver on every pledge and promise. A global watershed such as the COVID-19 pandemic is unprecedented; many companies have been catapulted into dire straits. Others have been able to leverage the situation as an opportunity for new, substantial growth and additional revenue streams. Christian Teichmann, Managing Director of Burda’s international growth capital arm BurdaPrincipal Investments (BPI), looks back on the past few months and explains what companies need to focus on now, how investors can support young enterprises, and which BPI portfolio brands have weathered the storm particularly well.
For almost six months now, coronavirus has dominated every aspect of our personal and professional lives. What do young companies above all need to do in order to successfully meet these challenges?
The pandemic has uniquely spotlighted the importance of a strong team when forging a crisis-resistant company. After all, in addition to all the difficulties, a crisis also creates many opportunities that must be identified and harnessed as a team.
Companies with an excellent organizational structure have been able to make much better use of the opportunities than teams that were already burdened by problems before the crisis. Moreover, some companies were initially stunned by the upheaval, while others swiftly adapted their business models to distinguish themselves from their competitors more clearly. These companies did not hesitate to make ad-hoc decisions – or simply strike out in new directions with the goal of emerging as winners.
We have also seen that, especially in times like these, companies need a clear purpose. Those with scalable, all-digital platform modelsthat invested early in digital have coped much better than those more traditional organizations that are still lagging behind in the digital stakes. A good capital structure is another invaluable survival tool. If a company has largely operated without a buffer before, it will soon find itself in trouble during a crisis.
Has your role as strategic partner and investor changed since COVID-19 struck? How are you helping Burda’s investments to best manage the disruption?
As investors, we have always been there for our portfolio companies; we are now working with them even more closely than before. They have certainly benefited from the fact that, as a global player, we were able to liaise with and learn from other markets as to the best ways to soften the impact. Furthermore, we have continued to invest, which many others have not.
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Source: Hubert Burda Media
By Dorothee Stormmel, Head of International Communications