Last month we wrote about the history of local startups that were formed during a recession and went on to success, including local unicorn Jamf. The conversation quickly turned to what that means for founders and investors. 

Starting Up in a Downturn

The idea is that while many startups are beat down by strong headwinds, those that are resilient and adapt to stay aloft are better-positioned to take off post-recession. The local, successful startups that have come out of downturns offer compelling evidence to support this idea proposed by Rob Weber. 

Lee Schafer delved into the topic in his Star Tribune article, “Can a downturn actually be the right time to start a business?” and spoke with Scott Burns, CEO of Structural and former CEO of GovDelivery.

Managing Partner Rob Weber’s own previous company, NativeX, was a startup success that came out of a recession.

Scott agrees that it’s probably true that “what doesn’t kill you makes you stronger”, but he doesn’t think that it’s better to start in a recession. Specifically, he laments the opportunities lost that he didn’t pursue when they presented themselves. 

“When CEO of GovDelivery during trying times, he said, ‘we were so beat up we lost our ability to move fast when the opportunities did arrive.’”

Investing During a Downturn

Few people would disagree with Scott that running a startup during a recession is a difficult position. Being a startup founder is incredibly tough even in easy times. But if founders can run lean and stay agile, they might come out of the pressure cooker with a proven, capital-efficient business.

In the Midwest, capital efficiency is already a necessity for startups. We have 10% of US venture-backed startups, but only 5% of funding. For investors, this can mean attractive returns on investments. Specifically, a 5.17x median MOIC (Multiple on Invested Capital).

There is opportunity to be found in a recession. The next GovDelivery, NativeX, and Jamf could be out there right now.

The trick is to keep yourself willing and able to move on those opportunities when they arrive.

Events

Here are some interesting upcoming events. They are all virtual.

Portfolio News

Allergy Amulet is new to the Great North Labs portfolio! Allergy Amulet is a fast & portable food allergen & ingredient sensor. The wearable device is paired with test strips, and is the world’s smallest & fastest consumer food allergen sensor. Read more at Crunchbase.

“Indeed acquires recruiting process automation platform ZapInfo”. Jobs site Indeed has acquired ZapInfo!

“Misty the robot graces Fierce AI Week in engineering”. Misty demonstrated it’s use as a temperature screening assistant for COVID-19.

“PrintWithMe Announces National Partnership With RangeWater Real Estate”. PrinWithMe has partnered with a manager of 50,000+ multifamily housing units.

“Pitchly completes $2.5 million investment round”. Pitchly has completed a $2.5M capital raise.

Job Board

Dispatch is hiring a Business Development Representative, Data Engineer, and Quality Assurance Engineer in Bloomington, MN; a remote Ruby Developer. They are also hiring Territory Sales Managers in Albuquerque,NM; Denver, CO; Phoenix, AZ; Portland, OR; Salt Lake City, UT; Seattle, WA; and Tucson, AZ. 

FactoryFix is hiring a Team Lead – Full Stack Developer, Full Stack Developer, and Infrastructure Developer- DevOps in Madison, WI; and a Sales Development Representative  in Chicago, IL, Indianapolis, IN, or Madison, WI.

PrintWithMe is hiring a Regional Sales Director on the East Coast; AR/AP Specialist, Inside Sales Executive in Chicago, IL; Customer Service Representative, Marketing Director, and a Fall 2020 Strategy Intern (MBA) for Remote work.

Parallax is hiring a Growth/Experienced Business Development Representative in Minneapolis, MN; Experienced Product Designer, and Head of Customer Success & Product Ownership in Edina, MN. 

Branch is hiring a Data Platform Manager, Senior Backend Engineer, Senior Software Engineer, Customer Success Manager, Customer Support Rep, and Fraud Agent in Minneapolis, MN.

Inhabitr is hiring a Chief Growth Officer/Head of B2C Growth, and a Sales and Customer Experience Associate in Chicago, IL.

Clinician Nexus is hiring for Customer Support I in Minneapolis, MN. 

NoiseAware is hiring a COO, VP of Global Sales & Account Management, Embedded Developer, QA Technician (independent contractor), Account Manager, and a Customer Advocate in Dallas, TX.

July Newsletter
Great North Ventures

iraLogix closes $22M + Branch expands with Uber

iraLogix Closes Series C
Great North Ventures

iraLogix closes $22M Series C

June Newsletter
Great North Ventures

Flywheel lands Gates Foundation grant

We're Hiring
Great North Ventures

Venture Capital Analyst

We're Hiring
Great North Ventures

Executive Assistant – Venture Capital Firm

Great North Ventures Raises $40M Fund II
Great North Ventures

Great North Ventures Raises $40 Million Fund II

Investment Thesis: Fund II Strategy
Great North Ventures

Investment Thesis: Fund II Strategy

Investment Thesis: Community-Driven Applications
Great North Ventures

Investment Theme: Community-Driven Applications

Fund II Theses: Solving Labor Problems
Great North Ventures

Investment Theme: Solving Labor Problems

April Newsletter
Great North Ventures

Trends in the Gig Economy + Work in the Metaverse

Minnebar14
Josef Siebert

MinneBar 14 Recap

Minnesota Innovation Collaborative
Josef Siebert

Minnesota Innovation Collaborative

engineer and various business information. Internet of things industry.
Pradip Madan

IoT 3.0

Healthcare innovation image
Great North Ventures

Healthcare Innovation