The COVID-19 crisis has unsettled the High-Tech and startup world. Furloughs, recruitment stoppages, firings, and above all the possibly dooming uncertainty looming over the raising of capital - the oxygen tank of startups.
Now, the combined Israeli-American fund, NFX Capital is offering to simplify the capital raising process, making it easier and faster during these hectic times, and it’s all done remotely.
Final Answer Within 9 Days & Money In The Bank Within 3 Weeks
Any company interested in NFX’s new investment process needs to fill out a short brief about itself to participate. In a conversation with Geektime Levy-Weiss tells that the NFX fund pledges to respond within 3 days and give a final answer within 9 days. “It’s an SLA we have never committed to before, and it comes with complete transparency with the founders at whatever stage they may be,” said Levy-Weiss.
Moreover, beyond the speedy approval time, Levy-Weiss claims that if in fact, the fund decides to invest in a startup, then it pledges that funds will be transferred within 3 weeks. For this plan, 3 levels of investment were determined: $1 million, $1.5 million, and $2 million for 15% control of the company’s stocks, depending on the startup’s stage in development. In addition, NFX Capital claims that it has drafted a simple three-page investment document. “It’s the fastest and simplest process we have ever done,” tells Levy-Weiss.
According to NFX, they have already received thousands of inquiries from both Israeli and American companies. The fund is aiming to invest in all areas, excluding the pharma and hardware industries.
The targeted investment sum of $20 million was derived from NFX’s second fund, which was successful in raising $275 million for investment in their SID and pre-SID stages last May. Yet, Levy-Weiss is not eliminating an expansion funding round from the venture, especially in light of entrepreneurs’ comments.
Despite COVID-19, we are witnessing hundreds of millions of dollars in funding over the past two weeks. Is this a trend? Or just random?
Levy-Weiss: “Almost all funding series were announcements agreed upon before the COVID crisis. Unfortunately, we’ve already seen a significant slowdown in the market over the last month… Our impression is that industry hasn’t stopped but slowed down, the top stocks declined and investors are waiting for them to go down even more. It’s difficult to raise funds these days, but I believe that the still, the best companies will succeed. Even if the terms aren’t as good as a few months ago.”