During the pandemic era, entrepreneurs are turning to SPACs, crowdfunding, and direct listings.
Inventive entrepreneurs find creative ways to access capital.
New business owners rely on traditional and innovative methods to secure funding
The article discusses how the COVID-19 pandemic has led to a shift in the way entrepreneurs and investors approach funding mechanisms, equity offerings, and initial public offerings (IPOs). Here are some key points from the article:
- Increased use of crowdfunding: The pandemic has accelerated the adoption of crowdfunding as an alternative to traditional venture capital investments.
- Remote IPO process: Virtual meetings have made it easier for companies to go public without the need for in-person roadshows, making the IPO process simpler and more accessible.
- Banks working with companies earlier: To adapt to the new reality, banks are starting to work closely with companies earlier in the funding process, building relationships before a potential public offering.
- Less emphasis on institutional support: With large investors already participating in pre-IPO rounds, there is less need for companies to drum up institutional support through traditional IPO roadshows.
- Normalization of alternative mechanisms: The pandemic has accelerated the adoption of alternative mechanisms for listing and offering equity, which may become normalized even after the economic shock subsides.
Overall, the article suggests that the COVID-19 pandemic has accelerated changes in the funding landscape, making alternative mechanisms more accessible and viable for entrepreneurs and investors.
