Andrew Chung and VCs Assess COVID-19’s Impact on the Business Sector

The COVID-19 pandemic is affecting many businesses in ways we could not have imagined even just a few weeks ago. Even with most states partially or fully reopened, shelter-in-place laws have slowed our economy, due to the shuttering of retail stores, restaurants, startups, and other businesses.

In some cases, these businesses have already failed or are on thin ice and unsure whether they can survive this extreme downturn. Andrew Chung has been here before.

For more than 20 years, Chung has been an entrepreneur and investor. In 2016 he announced the launch of 1955 Capital for the purpose of, as he puts it, “investing in transformative companies that can solve the most pressing issues in the developing world.” Today 1955 Capital has grown into a global venture capital investment firm, with Chung serving as managing partner.

For the past 10 years, 1955 Capital’s investments have focused on areas related to energy, healthcare, food, agriculture, education, and sustainable marketing. The firm primarily pursues investments that Chung believes will give a “long life to both people and the planet.”

Chung has advised business owners in the past on how to weather a storm similar to COVID-19. Living in Greater China during the SARS epidemic in the early 2000s, he witnessed how dramatically and quickly a pandemic can affect businesses. His astute advice may help those in suffering businesses move from a place of fear to emerge on the other side of the crisis in an advantaged position over their competitors.

Surviving the Pandemic

While business owners stay focused on survival, Chung offers several active steps they can take to preserve their business. Some key advice from Chung:

  • Ensure the safety of the team.

Requiring social distancing and work from home (WFH) policies remains essential as infection rates continue to increase. Also, follow guidance from the Centers for Disease Control and Prevention (CDC) on keeping the workplace safe.

  • Minimize financial risk.

Continue to build deeper partnerships with your funding partners so you have their support if things continue to get worse. Unfortunately, some types of businesses may not survive the long-term effects of this crisis. Working and communicating proactively with your partners may help mitigate this risk.

  • Proactively address failure modes.

Be prepared for all eventualities. Scenario plan extensively. Recovery is unpredictable, and most expect it will be much slower than the SARS crisis in the early 2000s.

  • Make budgetary contingency planning.

Plan for all possible contingencies. Take an “if/then” approach. Reduce all non-essential spending, then plan for additional spending considering what will likely happen 3, 6, and 12 months into the future.

  • Prepare for fundraising to be difficult.

Many venture firms are themselves in crisis mode but there are companies that can help your business. For example, 1955 Capital focuses on providing strategic assistance to companies. Prioritize investors with whom you already have a relationship.

  • Turn everything you possibly can into an advantage.

Brainstorm ways to survive. Creativity may be what gives you an advantage over slower-moving competitors as you learn to thrive in this environment that remains quite uncertain.

  • Project a sense of calm. 

If employees perceive the CEO or other executives are managing things decisively, it helps allay their concerns. It is critical to employee morale to feel that the person at the helm is seeking ways to assist them and keep the business afloat if at all possible.

Pursuing opportunities

If a change turns out to be needed, some business owners may decide to pursue other opportunities. One area of growth is in the food industry — after all, people still need to eat, they need grocery stores and other retail food businesses, and food processing plants have been deemed essential businesses by governments worldwide.

Ahead of this trend, Andrew Chung has been leading the way with investment in AgriFoodTech industries.

 AgriFoodTech and 1955 Capital

AgriFoodTech investors at this time have been “comparatively lucky,” according to Adam Anders of Anterra Capital, having seen sales increases for both online products and retail markets. Even so, like all businesses, the AgriFoodTech sector has been disrupted by the pandemic. Growers and agricultural processors have stripped operations to essential functions and products. Supply chains have suffered as workers become ill or choose to stay at home in order to avoid becoming sick.

In the meantime, people still want to know where their food comes from. Smart investing at this point will relate to businesses involved in increasing food production in ways that reduce waste and improve safety. In this domain, Chung remains “optimistic that there will be no slowdown of great ideas and an increasing number of entrepreneurs, both born of necessity in this difficult time.” 

1955 Capital’s Investment in Nature’s Fynd

Nature’s Fynd has been a company in the AgriFoodTech industry to fit the profile for 1955 Capital investments. Nature’s Fynd, originally called Sustainable Bioproducts, it was founded in 2012 with the mission of “producing nutritional food products that are kind to the environment without using animals.”

The company discovered a microbe in Yellowstone National Park that can be used to make non-animal sources of complete protein foods, including alternatives to meat and dairy products. The company was recently rebranded as Nature’s Fynd.

In late March 2020, 1955 Capital announced it would make a second substantial investment in Nature’s Fynd. According to the press release, the funds will be used to “scale its operations in order to commercialize its products with minimal environmental impact.”

1955 Capital was the lead investor in the Series A funding for Nature’s Fynd and made a substantial investment in the Series B. This remains 1955’s largest single investment to date.

Chung, who has been on the company’s board since 2018, says that Nature’s Fynd has:

“developed tasty products across multiple food groups faster than any other food tech company that 1955 Capital has seen. Their elegant manufacturing process supports a scalable and cost-effective production method that will be critical for achieving competitive pricing, particularly in developing world markets where this technology is most needed. With the global impact of livestock-related illnesses like coronavirus and swine flu that have disrupted the world economy, it’s more critical than ever to build a clean and sustainable food supply.”

The new funds will be used primarily for Nature’s Fynd to begin production in its new 35,000-square-foot manufacturing facility in Chicago and to increase its workforce from 50 to 100 by the end of 2020.

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