Comparing views on the current COVID-19 challenges and opportunities for tech growth companies

Board Chair Midsummer Drinks Reception and discussion – 22nd June 2020

On the evening of Monday 22nd June, Silverpeak, the technology investment bank, co-hosted with Spectrum, the technology executive search firm, an online event for a small group of eight plural Board Chairs of privately held technology growth ventures.

Over a hamper of wine, cheese and pâté – sent in advance – we compared views on the current challenges and opportunities for technology growth companies, in the wake of Covid-19.

We were delighted to listen to, and exchange views, with: Adam Hale; Dale Murray CBE; David Gilmour; James Bilefield; Lisa Stone; Margaret Rice-Jones; Nigel Clifford and Vin Murria OBE.

Pietro Strada began the discussion by highlighting the key observations of Silverpeak since March 2020, most notably:

  • Broadly, the technology and pharmaceutical sectors have been recent market winners
  • Within the technology sector, there are sub-sector dynamics: WFH and remote solutions attract interest, and the number 1 and 2 players in each subsegment have an opportunity to extend their leadership
  • There are different dynamics between the public and private markets; private equity does not believe recent equity market pricing
  • CEOs and management teams are cautious
  • Private equity has capital to deploy
  • Transactions are taking longer
  • Valuations are down
  • Companies are raising two years of cash

This was followed by Daniel Osmer outlining the key Covid-19 observations of Spectrum:

  • Most companies locked down well before UK government advice to do so, and the expectation is that the way of conducting work has changed permanently in many respects
  • Boards have been leant on heavily by their management teams
  • Some enjoy Chairing virtual board meetings and their efficiency; others find the difficulty in reading body language to be challenging
  • In many cases, employee productivity has gone up, but there is a question as to how sustainable this is
  • Clients are reluctant to hire at executive level entirely virtually, although we do expect a greater element of a selection process to be conducted virtually in the future than has been the traditional ‘norm’
  • It is more challenging for candidates to assess company culture via virtual selection exclusively

The key themes which emerged from the broader guest discussion were:

The significant variability of company performance, by market subsector, and by management team response.

Some of the fundamental challenges during Covid-19 have been: “the speed, scale and style of this impact has been different to other recessions”; “it is difficult to plan when management teams have little control over market demand stimulation”; “even with ARR contracts, the impact of the lack of customer cash has been felt”; “the lack of contact, especially when resources have to be on-site, as well as the simple lack of someone to talk to”; “some behaviours under pressure have not measured up to the company’s purpose”.

The importance of purpose: “executives have shone where they have remembered their company’s purpose”; “those that have forgot their purpose have created friction”; “companies have needed to look back at their purpose as an organisation”; “businesses that invested in purpose have fared well, engagement levels have remained as high as they were pre-lockdown – the challenge now is how do we keep this going, and build on it in a more disparate world”.

The importance of leadership: “there is a new level of accountability now with teams”; “many management teams have shown incredible tenacity”; “succession plans have been worked on with executive teams”; “you look closely at teams and reassess what you’ve got and what you need”; “the importance of talent during these really difficult times has been highlighted”.

Partnerships that matter: “there has been a fundamental reassessment of ecosystems”; “you know who your real partners are at a time like this”; “critical to understand your partner, to genuinely partner – and to drive quality up”.

Online meetings have (mainly) worked well: “everyone attends because the session is online, which is levelling”; “future in-person meetings will be reassessed: is it a habit, or of value”; “important to strategize and not simply react”; “quickly made, data informed decisions are important”; “online meetings are time efficient”; “easier when you already know everyone in the online meeting”; “80% of online meetings are very good”; but “interactive, brainstorming meetings are difficult online”.

The humanity now on display: “talk to customers more”; “build intimacy and genuinely partner”; “the contribution by companies to wider society is inspiring and engaging for employees”; “strength, tenacity and kindness to guide and support others”; “seeing people as human beings and not as transactional agents”; “there is nervousness and remorse being shown by people when considering leaving a team”; “we’ll end up with better corporations doing more good”.

The awareness and importance of employee mental health and the Black Lives Matter movement has been complete: “Black Lives Matter has highlighted diversity and disadvantage”; “The Black Lives Matter movement has had a profound effect on organisations”; “the mental health of employees is fundamental”; “the younger you are the tougher it has been – coaching opportunities in a virtual world are very limited”; “inexperienced CEOs have felt anxious”; “there is a fear of joining a new company at this time”.

The acceleration of innovation: “lots of innovation in a small space of time – will deliver a positive medium term impact”; “business myths have been busted – many in a positive way”; “we’ll all work smarter”; “organisations won’t go back to where they were in January”; “elephants can dance when under pressure and have no choice”; “start-up mindset”; “once the cash conservation plan is in place, you look towards re-orientating the business to the new scenario – looking at opportunities, and new ways of driving growth”.

Paddy MccGwire of Silverpeak brought the 90-minute discussion to a close, with some guests choosing to stay online for a relaxed conversation, a key theme of which was UK government support, and, in particular, the furlough scheme and The Future Fund.

Managing Partners

To further discuss these findings, to join future events, or to discuss technology investment banking (Silverpeak) and technology sector board and executive search (Spectrum), please contact:

Paddy MccGwire, Managing Partner Silverpeak pm@silverpeakib.com

Pietro Strada, Managing Partner Silverpeak ps@silverpeakib.com

Daniel Osmer, Managing Partner Spectrum daniel.osmer@spectrum-ehcs.com

Leave your Comment

WEBINAR Optimising exits for European technology companies – 17 September 2020

READ MORE

Applied AI Leadership Dinner – 26 November 2019

READ MORE

Seminar: Optimising Exits for European Technology companies

READ MORE

Tech Tour Mobility Summit 2019: Investment in European mobility companies is accelerating in 2019

READ MORE

Tech Tour Deep Tech Summit 2019: Fundraising booming to record highs

READ MORE

Deep Tech Summit – October 2019

READ MORE