In light of COVID-19 and the impact it has had on businesses, especially start-ups, members of SEA Founders initiated a huddle call on a Sunday morning over Zoom. With Anna Gong (Perx Technologies) and Suresh Shankar (Crayon Data) leading the discussion, 21 founders came together to discuss issues and solutions to help each other tide through this difficult time. We are sharing this to help the larger start-up community.

1. COVID-19 Challenges & Questions
Key Findings and Takeaways

2. Fact Sheet:
Who is SEA Founders?
We are a community of Series A-B tech founders scaling businesses in the region. We help founders in
Southeast Asia to scale faster by accelerating learning and fostering deeper relationships throughout the
ecosystem. Our cross-regional programs include the Founders‘ Coaching Pause, quarterly Masterclasses,
and Local Forum Groups
Currently, we have 38 founders who hail from these corners of the region: Singapore, Bangkok, Kuala
Lumpur, and Jakarta.
SEA Founders attracts a diverse group of voices with founders coming from different verticals (i.e.
EdTech, FinTech, HR, F&B) and models (i.e. B2B, B2C, SaaS).

3. Purpose of Survey:
In light of COVID-19 and the impact it has had on businesses, our members initiated a “scramble” call on a
Sunday morning over Zoom. With Anna Gong (Perx Technologies) and Suresh V Shankar (Crayon Data)
leading the discussion, our founders huddled together to discuss issues and solutions to help each other
tide through this difficult time.
21 founders participated in the call.
The following slides outline the key issues that the founders are facing, as well as solutions that were
collectively contributed during the discussion.
Fact Sheet:

4. Delayed revenues and worrying burn rates cited as top
challenges arising from Covid-19

5. Delayed revenues and urgent need to bring down net burn cited as high
impact and priority items.
While delay and inability to fund raise were cited as big challenges faced, they are low impact and priority problems.

6. Founders also see the crisis as a chance to optimise the business and
refocus priorities; some areas of business are also likely to grow and
competitors will potentially shut down.

7. Next, we asked founders for their views on 5 key areas of
concerns and solutions that they’ve implemented or plan to
implement.
Revenue Cash Costs Employees
Funding &
Investors

8. Founders concerns on revenue are mainly on longer sales cycles
and unpredictability of revenue streams.
CONCERNS:
• Longer sales cycles
• Prospects negotiate more (dragging out
sales cycle) and expect discounts
• Pipeline is weakened: deals are delayed
or cancelled
• Need alternative revenue streams
• Revenue forecasts impacted; inability to
project
• Unable to travel for lead generation and
to close deals
• Size down projects to reduce sales cycle
• Shorten delivery to receive ARR sooner
• Double down on customer success to cross-sell/upsell to
existing accounts
• Get into more strategic partnerships to open up new revenue
channels
• Offer discounts for early payment
• Looking for additional/new revenue streams by charging
other/different stakeholders
• Target verticals that are more resilient
• Focus on business units with higher contribution margin
• Alter product offering to meet changing market needs
• Globalize/diversify product range and service
• Reposition product to become an essential instead of a
nice-to-have
SOLUTIONS:

9. Delayed payments from customers severely reduce cash flow
and runway for businesses.
• Delayed payments:
• Delay in payment from customers
• Reduces cash flow
• High OPEX
• Results in high burn rate for current crisis
situation
• How to adjust/reduce expenses?
• Runway has been significantly reduced, so how
can we extend it?
• Bridge round funding from VCs
• Government-supported loans from banks
• Chasing more aggressively on existing
receivables
• Re-negotiating payments of existing loans
from banks
• Headcount freeze
• Cutting costs across:
• Marketing and ad spending
• Salaries
SOLUTIONS:CONCERNS:

10. Cost-cutting measures to focus largely on employee salaries
and benefits, and implementing a headcount freeze.
• How to reduce costs without
jeopardizing the ability to produce and
deliver value
• High employee and tech costs
• How to conserve cash especially when
the burn is mostly for wages
• How to validate a pay cut when there is
still work needed to be done
• Negotiate for lower rental
• Negotiate with vendors e.g. AWS/GCP to lower price
• AWS separate staging vs production environments
• AWS price loaded onto production
• Optimising on databases
• Reviewing codes
• Optimise API calls
• Cut digital marketing budgets
• e.g. slash Google ad spend by up to 50%
• Eliminate non-essential cost items (e.g. SaaS subscriptions)
• Delay in account payables
• Salary and Employee Benefits-related:
• Headcount freeze
• Delay portion of salary
• Postpone salary increments
• Pay cut starting with management
• Temporarily reduce employee benefits
CONCERNS:
SOLUTIONS:

11. Low employee morale a cause for concern with impending pay cuts
and freezes. Founders to focus on over-communicating and being
transparent to build trust and relationship.
• How to ensure productivity does not slip
because of WFH measures
• Employees looking to leave because of
uncertainty about the future and security of
their roles
• Low morale when lay-offs and salary cuts are
implemented
• Team is lean to begin with; with layoffs
looming, remaining team will be
over-stretched
• How to properly communicate cost-cutting
measures
• WFH mandated for employees using public
transport
• Implement daily huddles/stand-ups to ensure
WFH employees are on-track
• Be transparent in communications
• Over-communicate, be available and present to
take questions and continuously align
• Issue/top-up ESOP to cushion pay cuts
• Salary deferment for productive staff
• Implement 4-day work week for
underperformers or non-performing staff
CONCERNS: SOLUTIONS:

12. Investor confidence negatively impacted; Founders looking
at bridge round in Q3/Q4
• Are investors looking out for different things in
times of crisis?
• Which VCs are still in a strong position to invest?
• Whether to take bridge funding from existing
investors if it is not required at the moment
• Previous projections are now invalid, uncertainty in
markets make future projections difficult
• Investors asking for long term plans and projections
which are difficult to project now:
• Scenario planning for 30, 60 and 90 days
• Scenario planning for 6, 12, and 24 months
• Investor confidence may drop significantly as they
are more cautious and risk-averse
• Delays in receiving of funds
• Having 1-on-1 conversations with key investors to
reassure and realign
• Show preparedness and measures taken
• Ask existing investors for bridge round in Q3/Q4
• Government:
• Working capital loans guaranteed by the
government
• New VCs in town (B and C rounds):
• Lightspeed ventures
• 8 Road Capital
• Dry powder:
• BRI Ventures
• Tanglin Ventures Partners
SOLUTIONS:CONCERNS:

13. Bigger questions that loom…
How long will this crisis last?
How long will it take to bottom out?
How to deal with a prolonged situation that
may last more than 12 months?

14. Next Steps:
Members to circle back for a follow-up call on 28 March.
Time to be advised.
In the meantime, take care and stay safe!

15. Thank you.
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