Investors explain COVID-19’s impact on consumer startups

Home fitness and games as gathering places are a few of the startup verticals propelled by unprecedented shifts in behavior due to shelter-in-place orders. We surveyed the top investors in consumer and social apps to learn about 2020’s startup trends, the M&A climate, the threat of incumbents copying new entrants, underserved demographics and which features are poised to be unbundled from the biggest apps.

The Extra Crunch survey series assembles the best minds in different verticals, drawing on investors who’ve backed or worked at the companies defining their industry. For this survey, we asked how COVID-19 was affecting their investment strategies and the operations of their portfolio companies. We also dug into whether founders are more or less hopeful about being acquired, which startup ideas they wish they were being pitched and what age groups or cultures deserve new social products.

Subscribe to Extra Crunch to read the full answers to our questionnaire from funds like General Catalyst, Kleiner Perkins and Sweet Capital.

Here are the 17 leading social network VCs who participated in our survey:

• Olivia Moore, CRV
• Justine Moore, CRV
• Connie Chan, Andreessen Horowitz
• Alexis Ohanian, Initialized Capital
• Niko Bonatsos, General Catalyst
• Josh Coyne, Kleiner Perkins
• Wayne Hu, Signal Fire
• Alexia Bonatsos, Dream Machine
• Josh Elman, Angel Investor
• Aydin Senkut, Felicis Ventures
• James Currier, NFX
• Pippa Lamb, Sweet Capital
• Christian Dorffer, Sweet Capital
• Jim Scheinman, Maven Ventures
• Eva Casanova, Day One Ventures
• Masha Drokova, Day One Ventures
• Dan Ciporin, Canaan

Olivia Moore & Justine Moore, CRV

How much time are you spending on social right now? Is the market underheated, overheated, or just right?

It’s been a tough couple of years for new social startups — but when something hits in this space, it hits big! We’re always spending time looking at consumer social — we have a network of 200+ college scouts at campuses around the country, so we hear about (and try) new apps pretty frequently.

It is difficult for new social startups to reach any kind of meaningful scale. The average person doesn’t download any apps in a given month, and even though younger users may be more willing to try new things, they often face storage or data constraints.

We feel that the market is probably “appropriately heated.” Once a social startup is “working,” it shouldn’t struggle to raise capital, but there are probably fewer investors making large pre-launch social bets because there have been so few breakout hits recently.

How has COVID-19 impacted social startups operationally?

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