When Coronavirus pandemic hit India, some of the biggest startups had to lay off employees and cut salaries to cope with declining revenues. However, in the last three months, that buoyant, cheerful attitude that defines the startup ecosystem is back. Even though Covid-19 cases are rising all across the country, entrepreneurs and investors have bounced back with innovative ideas and interest in new pitches. 

I spoke to Sajith Pai, a venture capitalist at Blume Ventures, which invests in early-stage companies, about the impact of lockdown on Indian startups and the current mood. He also has some great tips for first-time entrepreneurs who want to raise money in the post-Coronavirus world. 

Edited excerpts:

Doomsday hasn’t come

Diksha Madhok: How have things changed in the VC industry since the lockdown? 

Sajith Pai: I would say when the lockdown started, there were two camps. The first camp felt that we are panicking and things would get back to normal fast. The other camp was more alarmed. By early April, most people realised this is pretty bad and pressed the reset button. We heard a range of valuation renegotiations—while some startups pulled off their pre-COVID term sheets intact, others were renegotiated even to as high as a 25% discount and some were withdrawn. New funding conversations stopped and we all started focussing on our portfolio companies. With declining revenue in those initial weeks, some of them went into a tailspin and needed more attention. High-quality pitches also dropped dramatically in April and May.