The coronavirus pandemic is causing heavy financial losses across industries — but that doesn’t mean entrepreneurs need to hold back until the economy recovers.

“Don’t assume there’s not any money out there,” said Kathryn Stewart, founder and managing director of early-stage venture capital investment firm Cranbrook Capital. “It kind of depends, but [the situation is] not all dire.”

She said some of the companies in her portfolio, primarily tech and software firms, “have had the best weeks and months they’ve ever had.”

According to Stewart, about $314 billion in early-stage VC funding is currently available, an amount she described as “great coffers.” While the number of deals has been declining, the amount of money per deal is not. This is a time when “you can get good resources at decent value,” she noted.

Stewart spoke during a recent Wharton panel discussion, “COVID-19 and Beyond: Entrepreneurship and Innovation in a Recession,” which was moderated by Wharton management professor Mauro Guillen. His book, 2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything, is forthcoming in August.

Guillen asked panelist Michael Vaughan, former Venmo chief operating officer and now executive in residence at VC firm Oak HC/FT, about entrepreneurs who may be seeing a number of business opportunities right now. In such an uncertain and constantly changing environment, how should they evaluate and prioritize them?

Vaughan acknowledged that it’s tough to assess how much of the current environment is temporary, and that some companies will experience a permanent shift in how they do business. He shared how some firms have reinvented themselves to survive, such as a tech business he knew of that managed the supply chain to restaurants. “Restaurants go to zero, the business goes to zero,” he said.

“Don’t assume there’s not any money out there.” –Kathryn Stewart

But the company quickly switched to a direct-to-consumer model involving the delivery supply chain for groceries. “In 60 days, they pivoted the business and raised a new round of $36 million in funding on the new business model,” he said. “They just decided, ‘You know what, I can’t wait this out.’”

Vaughan cautioned that this type of shift isn’t the best course for every startup. In his view, much depends upon a firm’s growth stage.

For the tech company he referenced, which he described as being at a later stage of funding, he said that waiting until they “got to the other side” could have been a death sentence if the economic crisis lasts too long, so their actions made sense. However, for a pre-launch company that has just raised a round of financing, for instance, Vaughan’s advice was, “Put your head down, build your product…. You see where the world is in 12 months when you launch, and then you go. It’s dangerous to start to react at that early stage.”

A Survival Technique: Business Partnerships

Davis Smith is a serial entrepreneur who is founder and CEO of outdoor apparel and gear brand Cotopaxi. He previously started, an award-winning baby care online retailer in Brazil. Smith told how his company has adapted during the pandemic by forming partnerships. A relatively young company founded six years ago, Utah-based Cotopaxi has faced challenges this year as Americans cut back drastically on travel and on purchasing travel-related items.

Smith described how he reached out to a local company that makes emergency kits and survival gear because its orders had been going through the roof. (“We just did our last year’s revenue in the past few weeks,” Smith quoted the other CEO as saying.) He initiated a deal that benefited both firms: The emergency-kit business would rent some of Cotopaxi’s unused warehouse space and employ some of Cotopaxi’s workers to pack and ship its flood of orders. Smith noted that a product collaboration between the two firms was also in the works.

A second collaboration involves the state government of Utah, Smith explained. In a public-private partnership, Cotopaxi is converting one of its factories that makes jackets into one that makes face masks in order to generate half a million masks for vulnerable populations. The company also sells masks directly to consumers.

Guillen asked Smith if he thought mask production would be a permanent diversification for the company. He answered, “I think [masks] are going to be part of our normal lives, for at least the rest of this year. So, this is likely going to become a product line that we’ll be doing at least for the foreseeable future.”

Smith agreed with Stewart that there are more funding opportunities out there than one might assume. “It’s a stressful time and businesses have been deeply impacted. It’s also a time where, if you’re looking to be creative, you can oftentimes find ways to do something that maybe you never would have thought of.”

Guillen asked Smith if entrepreneurs who are seeing the demand for their consumer products falling because of the crisis should consider substantial price cuts. Smith said that the decision to slash prices is difficult to recover from and damages the brand. A better idea is to change the product mix. He gave the example of a popular Cotopaxi travel bag: “It’s been our hero product, but no one’s traveling anymore,” he said. Instead, the company is focusing on its hiking gear and day packs as people hit trails and take other brief expeditions closer to home.

“Some of the biggest companies in the world happened in 2001 and 2002, and then in 2008 and 2009. It’s never a bad time to join startups.” –Michael Vaughan

Guillen noted that in speaking with entrepreneurs and business owners in the past few months, he has noticed significant concern about receiving payment from other businesses along the supply chain. “[Business owners] are saying, ‘Yes, I can sell more, I can deliver more now during this crisis… but the challenge is going to be getting paid later.’”

Vaughan agreed. “I think in this unusual period of time, you’re going to have a lot of people having to make decisions of, ‘Do I do the right thing and support my clients not knowing if I’m going to get paid?’” He believes the pandemic will result in wider adoption of digital payments, digital invoicing and what he calls more creative financial solutions for business payments.

“It’s astonishing to see how much there is in delays and unpaid invoices just in normal times, not even now,” he said. “And if you think about ways to improve how people get paid, I think that’s one of the hopes for blockchain: building financial contracts where services get delivered or goods are provided and payment is automatically made when [they’re] delivered.”

Lucrative Sectors for Entrepreneurs

The pandemic is presenting new or increased opportunities for entrepreneurs in certain sectors, according to Stewart. She discussed areas she said look promising now and speculated that they will remain viable beyond the pandemic. For example, there is a renewed spotlight on telemedicine. Stewart said one company in her portfolio, whose business was to improve medication adherence, was approached by Johns Hopkins University to help remotely monitor whether the institution’s front-line physicians and nurses were showing signs of COVID-19.

With the widespread necessity of remote work, other burgeoning areas include business intelligence software and cybersecurity, she said. Companies are boosting efforts to track and analyze employee productivity, and they also require increased firewall protection from hackers and viruses because employees are spread out over many locations. Stewart said that, based on the companies she comes in contact with, working remotely from home will “probably pretty much stay.”

An audience member asked the panel whether joining a startup was a smart idea for new business school graduates at this time. Smith and Vaughan said yes.

“[Look at] the startups that came out of the last few crises,” Vaughan said. “Some of the biggest companies in the world happened in 2001 and 2002, and then in 2008 and 2009. It’s never a bad time to join startups.”