DRF Resource Guide: Running a Startup in Uncertain Times

What does it take to lead a startup through the uncertainty of a global health emergency? 

In recent weeks, Dorm Room Fund has been working closely with our community as we all begin to navigate the volatility caused by COVID-19.

We urge everyone to put the health and safety of themselves, their teammates, their families and their communities first, and to follow the prevention guidelines of the CDC, WHO, and ISOS. No meeting or business opportunity is worth endangering your health or that of others. 

At the same time, every team has the ability to adapt, stay positive, and remain resilient in the face of external adversity. That’s why we’ll be sharing tips and best practices gathered from the DRF community and from our experience running teams across four cities that are designed to help founders keep their companies moving forward in the weeks to come. 

Running a startup in uncertain times 

Over the past few weeks, we’ve worked to provide founders with resources to help them plan for and operate effectively in an uncertain economy. Below, we’ve put together a list of resources from top venture capitalists (VCs) and operators that have built and sustained startups during periods of great economic uncertainty.  

We don’t pretend to have all the answers regarding the degree or duration of the economic impact of COVID-19, but instead hope these resources provide student founders with context, perspective, and actionable advice. The resources we’ve compiled outline how VCs may be thinking about capital allocation in less certain market conditions, provide examples of how founders have successfully navigated challenging and uncertain macro conditions, and illustrate how building a startup in a challenging economy can actually be an advantage. Remember that companies such as Microsoft, Apple, and Airbnb all grew in the midst of economic downturns.  

While no one should pretend to have a crystal ball, experienced voices underscore one key reality: volatile times require creativity, adaptability, and perseverance – all qualities that we see in our exceptional student founders across the nation.                

Words of wisdom about operating

First Round: This Founder Built Startups in 2008, 2016 and 2018. Here’s What He’s Learned About Resiliency

TL;DR “You can’t survive a downturn by shutting your eyes and grasping onto product/market fit for dear life. Shifts in the market make it even more important to be at the wheel. Keep your eyes on the road.”

Avichal Garg (Electric Capital, fmr. Director of Product Management @ Facebook and Partner @ YC): Sharing Lessons from Running a Startup through 2008


Mark Roberge (Stage 2 Capital, fmr. CRO @ Hubspot) A Recession Doesn’t Mean Your Startup Can’t Grow

TL;DR “In a weak economy, “nice-to-have” value propositions are left to the wayside. Unless the product or service solves a mission-critical issue at the buyer organization, no sale is made. A weak economy forces an organization to discover their “must-have” value proposition.”

Alex Bard (Redpoint Ventures, fmr. CEO Campaign Monitor/EVP @ Salesforce) Lessons from Starting a Company in the Last Downturn

TL;DR “In any economic cycle, but especially a tough one, you don’t want to do something sexy; you want to do something foundational. If you create something people need, you’ll thrive when the markets are low, as well as when they’re high.”

Steve Blank (8 time co-founder, author of the Lean Startup, professor at Stanford and Columbia): The Virus Survival Strategy for Your Startup


The questions every startup or small business CEO needs to ask now are:

  • What’s my Burn Rate and Runway?
  • What does your new business model look like?
  • Is this a three-month, one-year or a three-year problem?
  • What will my investors do?

Drive Capital: Eight Steps Startups Should Take to Survive the Coronavirus Crisis (Video)


  1. Over-communicate
  2. Set up your teams to be successful
  3. Stress test your company
  4. Pull down on all available debt now
  5. “Run to the roar”
  6. Share the bad news
  7. Pause all hiring
  8. Do not hesitate

Seth Levine (@ The Foundry): Thoughts

TL;DR “The truth is that most companies haven’t fully internalized the new economic reality that we’re facing. The result is a brief period of “business at usual, but from home” that is driving some near term sales closes for companies whose longer term prospects aren’t as bright as they may appear once businesses start getting their arms around just how deep an economic downturn we’re likely to be facing.”

Bill Gurley and Chetan Puttagunta (@ Benchmark): An Update on Consumer & Enterprise Venture Capital — Invest like the Best Podcast

TL;DR “Challenging the drivers and understanding the drivers of your business are particularly important in times like this…examining the core drivers of a business and understanding what happens if these assumptions change slightly, how that ripples through the business itself, and how you are equipped to handle it.”

Sahil Lavingia (Founder @ Gumroad): Here is how we went from burning $350K a month to making $10K in profit.


Cherubic Ventures: Three COVID-19 Insights from Our Founders in China

TL;DR Prepare for the new normal ahead with 3 key insights from Cherubic’s China based portfolio companies to leverage the learnings gained from China’s 90 day head start with COVID-19.

Redpoint: The Startup Sectors Most Impacted by the Coronavirus

TL;DR Roger Lee is maintaining Layoffs.fyi, which is a table of all the startups who have unfortunately cut staff. On the brighter side, it is a resource for startups looking to hire as they grow.  Redpoint provides an analysis by sector. 

First Round Capital: The Founder’s Field Guide for Navigating This Crisis — Advice from Recession-Era Leaders, Investors and CEOs Currently at the Helm

TL;DR The First Round team has crowdsourced and curated the relevant lessons they’ve come across about operating amidst a downturn.  A scenario planner template, resources for founders, curated list of reads, one hub to organize it all (in Notion.)

Andreessen Horowitz: Reading List for Leaders in Uncertain Times

TL;DR Some of a16z’s best pieces on leadership, grit, and managing a startup in times of uncertainty, collated from an almost decade of archives.

Andreessen Horowitz: Planning and Managing Layoffs

TL;DR Laying your employees off is one of the hardest things you do as a leader. You think you have it tough, but your employees have it far tougher. Your duty is to do everything in your power to give them as many resources as you can and offer them the most dignified exit possible. 

Andreessen Horowitz: IT’S TIME TO BUILD

TL;DR A call to action to build a better, new normal

Words of wisdom about fundraising

Eric Paley (Founder Collective):  Now Is the Time to Shift to Defense Mode


Upfront Ventures: Funding in the Time of Coronavirus


Haystack: A Quick Guide to Startup Fundraising in a Pandemic World 

TL;DR “For startups that boast business models which are dependent upon activities such as travel, or events/gatherings, or top-down sales models, or systems that require on-prem setups, or getting into the consumer wallet share, it would be wise to anticipate questions from investors around these topics.” 

Tribe Capital: Some perspectives on financing in a downturn

TL;DR “During the years before, during and after the financial crisis, we found that what mattered was longer-term execution and product innovations and not temporary funding disruptions. Looking across the various fundraising and exit metrics by vintage gives us confidence that, while macro conditions may affect fundraising for marginal companies, great companies continue to succeed regardless of when they were founded.”

Collin West, Nihar Neelakanti, Gopinath Sundaramurthy (Kauffman Fellows): This is how much harder it is to raise capital during a downturn

TL;DR “It is a reasonable assumption that capital will be harder to raise, and many startups will raise at a lower valuation than before this crisis.”

Steven Forth (Openview Partners): Pricing in a Time of Uncertainty

TL;DR 5 rules to help you manage pricing through the COVID-19 pandemic:

  • Do not discount. Use other concessions as necessary
  • Layer usage metrics into your pricing model to better align with value
  • Focus on economic value drivers for cost and risk
  • Build a holistic value proposition that include emotional, economic and especially community value drivers
  • Plan for more than one possible future

Glenn Kelman, Robert Wahbe, Bill Richter and Steve Singh (Madrona Venture Group): Founded and Funded: Managing through the Downturn

TL;DR “This too is going to pass. And when it does, the companies that have adjusted and really optimized, their businesses will be stronger. And they will distance themselves massively from the competition that couldn’t be agile and couldn’t deal with these issues in honest, authentic way.”

Y Combinator: How YC will be funding the S20 batch

TL;DR Y Combinator (YC) is going to keep interviewing and funding startups, they are just going to do the entire process over video. YC wants to fund founders that can survive and thrive in any market conditions.  

NFX: The VC & Founder Sentiment Survey

TL;DR 286 Seed & Series A Founders & 114 VCs provided their thoughts on investment pace, timeline to economic recover, fundraising plans, layoffs, hiring, cutting expenses, etc. A reference point in highly unpredictable times.

Words of wisdom about challenging markets 

Sequoia: Coronavirus: The Black Swan of 2020

TL;DR “Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances.” 

Pear VC: The Founder’s Survival Guide in the Time of COVID-19 

TL;DR “Finally, if you do need to fundraise, we suggest you adjust your expectations and get started quickly as it will take longer. Do not optimize for valuation, optimize for enough cash to survive.” 

Redpoint: What Could the Venture Market Look Like in the Coronavirus Era? 

TL;DR “Comparing one crisis to another is one way of trying to gauge the potential impact, and it’s a bit dodgy because so many things are different. If history is a guide, though, we can look to the 2008 financial crisis. In 2008, the venture market saw depressed valuations for 18–24 months, but a similar deal velocity.” 

Paul Graham (Founder @ Y Combinator): Why to Start a Startup in a Bad Economy

TL;DR “Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible. For years I’ve been telling founders that the surest route to success is to be the cockroaches of the corporate world. The immediate cause of death in a startup is always running out of money. So the cheaper your company is to operate, the harder it is to kill.”

Mattermark: The 2007–2009 Financial Crisis Was Surprisingly Kind to Tech Startups

TL;DR “Some of the biggest startups in the space didn’t waste the 2007–2009 window. Labor and housing market forces came together to create the sharing economy, and the advent of smartphones in 2007 gave many companies a new platform for their applications and services. Somewhat paradoxically, we can look back at the Great Financial Crisis as a golden era of tech entrepreneurship.”

Laura Du (Product and Ops at Opendoor): Learning from past recessions: How early-stage B2B leaders can adapt

TL;DR A summary of the Pear Speaker Series

Collaborative Fund: Five Lessons From History

TL;DR  “It is too easy to examine history and say, ‘Look, if you just held on and took a long-term view, things recovered and life went on,’ without realizing that mindsets are harder to repair than buildings and cash flows.”

Andreessen Horowitz: Navigating the Numbers

TL;DR The a16z team breaks down what the numbers do (and don’t) tell you, both in financial statements and KPIs. They cover the most common mistakes people make when it comes to understanding their numbers; how investors look at a company’s P&L; what metrics they use to determine if a business is healthy; and how founders can use the numbers to navigate in times of crisis.

Tools and resources

Faire: Financial Calculator Measures the Impact of COVID-19 on Your Business

TL;DR Add financial details about cash on hand, average monthly revenue, and average monthly costs before the coronavirus outbreak. Enter any changes to your revenue and costs that have occurred since the disruption. The impact calculator will generate a financial status for your business, and offer recommended actions you can take to help your business make it through this crisis.

Brand Foundry: COVID 19 Survival Guide

TL;DR A list of resources & tips on topics such as funding sources, continued operations & go-to-market strategy, lease handling, layoffs, and sales.

Silicon Valley Bank: Silicon Valley Bank offers COVID-19 loans, debt relief to startup-heavy client base

TL;DR Silicon Valley Bank on Monday said it will offer hundreds of millions of dollars in debt relief, as well as loans, to help its startup-heavy client base during the coronavirus crisis

Hustle Fund: Covid-19 US Relief Guide

TL;DR Aggregated resources on CARES loans and tax relief as well as Economic Injury Disaster Loans.  Deep dive into control, affiliation, and its implications for VC-backed companies, kept up-to-date daily. 

FinTech Collective: SBA Guidance 

TL;DR PPP and EIDL overview and considerations for startups.

Opportunities for funding if you’re working on something relevant to COVID-19

Check back here for more as we continue to update with new resources and funding opportunities. 

Written by Justine Humenansky, DRF Investment Partner (SF) and Alex Becker, DRF Marketing Partner (HQ). 

Get more Dorm Room Fund news and updates on Twitter and learn more on our website. Want more DRF content? Subscribe to our newsletter and podcast. Ready to take your startup to the next level? Apply here to be considered for an investment from Dorm Room Fund. Until next time! 🚀

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