Going through a financial crisis isn't easy for fledgling startups, but market downturns have previously birthed giants such as Airbnb and Uber.
Paul Asel is a San Francisco-based investor and the managing partner at NGP Capital who has invested in startups for around 25 years.Â
He has seen downturns from the Asian financial crisis in the late 1990s to the dotcom bubble and the 2008 financial crisis.
He has distilled five key pieces of advice he gives to portfolio companies to help them through tricky periods.Â
"A downturn is actually a better environment for companies to develop, most other businesses are distracted so it provides an opportunity to innovate quietly and to take time to perfect models," he told Business Insider in an interview.Â
There are signals that current nationwide lockdowns, brought in to counter the coronavirus pandemic, could last through 2020 and beyond. Asel is telling portfolio firms to hunker down. "We are advising our companies that this is going to be deeper and longer than anticipated," he said.
In recent years, he has focused his investing in smart mobility propositions having been an investor in Lime's 2017 Series B and Indian car rental startup Zoomcar. The current crunch on travel has put the sector under pressure.
"We have gone through the 50 companies in our portfolio and over 80% have been negatively impacted by coronavirus, but we believe over 80% will come out better if they can survive next 12 months," Asel predicted.Â
Here's the advice that Asel is giving his portfolio companies: