“Every day is going to be different.” Navigating Resources for Tech Entrepreneurs with Michelle McBane
Recently, The51 sat down—in our own respective home offices, of course—with Michelle McBane: Senior Investment Director at MaRS IAF and Managing Director at StandUp Ventures. Over the last few weeks Michelle has been working non-stop to determine the best path forward, not only for the entrepreneurs in her own community and organization's portfolio, but for the larger tech industry in Alberta as a whole.
“ Clients are desperate for digital solutions, and here we are. We can survive this. “
Passionate about this industry and sector, even after a long couple weeks, Michelle remains positive through her realistic assessment of the difficult months to come: "Tech is so well positioned. […] Clients are desperate for digital solutions, and here we are. We can survive this.” We second that, Michelle, and suggest that as women leaders in capital and entrepreneurship, we might even find ourselves thriving.
When asked how the entrepreneurs in her circle are handling our new reality, Michelle offered this invaluable tool: the COVID Matrix. Through simple formulas, this one-page questionnaire prompts entrepreneurs to consider multiple scenarios and challenges, and helps them prepare solutions. “Planning gives a sense of control, and helps with positivity," Michelle explains, and deeply encourages businesses who have not yet done so to take the Matrix and its information to heart.
"Every founder has been doing a lot of planning out of that material” says Michelle. “We’re now moving to the next phase, where people know what has to be done--how to reduce the burn, how sales could be impacted, etc.”
“Some founders have called every single employee in their company, whether their role is going to change or not.”
Mentioning how every founder now gets the “badge" for managing a business through a crisis and a downturn, Michelle is all too familiar with the questions and challenges that no one ever expected. Founders she works with have had no choice but to make deep cuts—layoffs taking place across the board, sometimes communicated via Zoom call, sometimes with a personal phone call to every single employee.
However, there is, as we all know, hope: What of the 75% wage subsidy promise recently announced by the federal government?
The goal of the Canada Emergency Wage Subsidy is to keep employees on payroll by assisting in the payment of their earnings to the tune of 75%, for the first $58,700 earned. For some businesses, this could translate to $847 a week, and would be in place for a 12-week period, March 15 - June 6, 2020.
“What about start-up businesses that can't show revenue for March/April?”
But here’s the kicker: to qualify, employers must show a drop in gross revenues of at least 30% in March, April or May when compared to the same month of last year. So what of start-ups and early stage businesses who can't produce that information? What of Angel-invested businesses, and VC-backed entrepreneurs who’re too new, or not yet revenue-producing, but are still on the hook for paying employees? Plus, what do we do about the 6-week window between application and assistance?
Michelle had these points of wisdom to offer:
1. For entrepreneurs and business owners, try the Canadian Council of Innovators Slack group. But remember, always speak as if you’re speaking to a public audience.
2. Talk to your local MPs. Vocalize how the announced subsidy programs leave a gap when it comes to tech, and early-stage businesses.
3. Keep an eye on BDC and EDC: Both will be announcing programs from the capital side of things by next week.
4. Leverage BDC support through your bank: Get in touch with your rep, and ask about the lending and loan programs.
5. Keep in mind we are in Canada. In the States, there is no such thing as BDC/EDC. We will come out of this—without worrying that the damage done to our private equity is irrecoverable. This may uniquely position Canadian business to be in a better position to recover than their American counterparts.
6. Be creative. At the risk of sounding flippant about something that is clearly very difficult, these are the times to employ our tech-savvy ingenuities; there are some businesses, like telemedicine and online-education which will thrive in this new normal. How can your business pivot from a technological standpoint? How could your products, services or IP be used in a way you hadn’t anticipated? Devote energy to that question, and it'll always be well spent.
As Michelle rightly put it, “Every day is going to be different. In the absence of answers, you do what you can with the resources you have.”
Thank you, Michelle, for sharing your insights, and thank you all for reading! If you haven't already, check out our new Resources page, and as always, get in touch—what kind of content can we provide during these weeks to help you navigate the new normal?
Stay safe, and stay well.
-The51