Covid Investor Sentiment
The chart on the left shows what makes us feel positive during this period. 73% of the investors surveyed consider it important to invest in times of crisis.
Although the current crisis has taken us by surprise, it also unites us. As a network, we feel particularly committed to this. That is why we wanted to assess the willingness of private investors in our region to invest in start-ups . To this end, we conducted a survey both in our network and in the networks of our partners.
The results are interesting for both sides: On the one hand, investors see that both experienced and inexperienced people are willing to invest this year. We see it as our task to provide the infrastructure for professional and efficient processing. On the other hand, start-ups find out in which areas investors are currently most interested.
Our most important takeaways
believe, that it is still important to invest in start-ups
of those who already have more than 10 investments want to invest this year as well.
the presumed reduction in the pre-money valuations.
is, not surprisingly, the clear winner in the industry
A total of around 300 individual investors from all groups took part, with private investors accounting for the majority. These groups are not exclusive, so a VC can certainly invest privately. At this point we would like to thank once again all those who so quickly generated such a great response to our survey.
Of course we wanted to know how the participants had invested before the crisis. In this analysis, we deliberately excluded VCs because we wanted to focus on private individuals. It is exciting to see that only 11.5% of the participants have never invested before and more than 15% have already made more than 10 investments. One third have between two and five investments. All in all, the group can therefore be regarded as already quite experienced.
How do the investment strategies of private investors, based on the current portfolio size, differ for 2020?
Our observation is that the larger the previous portfolio, the greater the willingness of future investments. The most cautious in this environment are those with only one existing investment.
- 73% who have never invested before
- 88% who already have more than 10 investments
- 50%, who can only show an investment
- On average 64.4 % of all survey participants
still want to invest
These industries are the winners of the crisis
Of course, we also wanted to know which industries are particularly benefiting and are in the focus of investors. Here the strong gap of 60% from first to third place was particularly striking. Of course, this is because the industries can be clearly distinguished from domains, for example, where it is worth continuing to pursue parallel strategies.
When asked which industry will benefit most from the crisis, the answer was not really surprising. Of course, the 'healthcare' sector clearly came out on top. It is also obvious that the telecommunications sector is becoming more attractive in times of social distancing. However, it is interesting to see how the third area will develop, which almost a third of those surveyed still consider to be particularly interesting: Business Services and HR. Many companies are naturally feeling the greatest pressure to finally go digital due to the current situation. Now it is important to focus on services that offer real added value. (must have vs. nice to have)
There were also few surprises when it came to the question of which cross-sector domains will benefit from the crisis in the coming years. That platforms would receive an even stronger boost was already foreseeable due to the emergence of local markets. In our opinion, the current situation is also creating greater awareness of the importance of local marketplaces. In addition, they will have better chances to be profitable against big players at least locally and to exist there.
Impact on valuations
It is clear that a crisis always has an impact on valuations.
- the majority of them see these as fluctuating between 10 and 40 percent
- only 12.9% think that the ratings will not change
- about the same number think that they will collapse by more than 50 percent
However, it should not be completely overlooked that most investors would probably have been positively disposed towards a reduction in valuation even in normal times (unless they are already invested).
Imaginary investments after corona virus
One of our hypotheses prior to the start of the survey was that the stock market and conservative asset classes would currently have much more demand than start-up investments. Therefore, we designed the hypothetical scenario and asked in which areas the survey participants would invest in the next six months if they had one million euros available. And the result makes us confident.