Investors give advice to Taiwanese startups on surviving economic downturn

投資者給台灣新創企業如何度過經濟衰退的建議

Acorn Pacific Ventures General Partner, Taiwan Global Angels Founder share insights during Meet Global event


TAIPEI (Taiwan News) — During an online panel discussion held by Meet Global, Acorn Pacific Ventures General Partner Peter Hsieh (謝忠高) and Taiwan Global Angels Founder IC Jan (詹益鑑) dissected key issues about how Taiwanese startups can survive during the current economic downturn and tap into the U.S. market.

When asked what were the reasons for economic downturns, Hsieh gave two examples, comparing the current downturn to that of 2000 and 2008. Prior to these recessions, and today, according to Hsieh, there were stark rises in Wall Street companies that focused on growth only, rather than their ability to turn a profit. Additionally, in 2008 and in recent years, derivatives gained popularity.

Both of these phenomena contributed to the overgrowth of the market, and eventually, available funds on the market fail to support the size of the market. The bubble thus will inevitably burst, Hsieh concluded.

Hsieh added that during an economic downturn, it is important for startups to cut back on costs, reconsider the prioritization of their resource allocation, and be aware that getting investments and funding may not be as easy as it was before. Startups should also remember to involve their existing investors in discussions and updates about their companies’ operations and plans.

Jan focused on the relationship between Taiwan’s and Silicon Valley’s information, technology, and medical industries, highlighting several specific fields in each industry that may present opportunities for Taiwanese startups. One major issue that Taiwan startups face is the scale of capital available in the country and the breadth of investors’ capabilities.

Regarding how the current economic downturn might affect startups, Jan said early-stage startups will struggle through the next couple of years as investors will be especially conservative when it comes to companies with immature business models or are not yet turning a profit. As for later-stage startups or companies that have already found success in the market, this is a good opportunity to accelerate.

Many companies that became some of the world’s biggest, such as Alibaba, Facebook, Google, AirBnb, and Dropbox, were founded before economic downturns and took off after surviving the crisis, per Jan.