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The new normal

Written by Hum Capital

Introducing the New Normal Index from the Intelligent Capital Market

Economic stress creates opportunity

We are at an unprecedented moment in history. The COVID-19 crisis has exposed big vulnerabilities in our interconnected world and our modern economy. We expect the pandemic’s effects to be long-term and far-reaching, causing many disruptive changes in how people do business and interact with each other, even after a vaccine is available. But along with the economic harm caused by COVID-19, we are also seeing emerging signs of hope. Business leaders are moving forward with new ways of adapting their operations and rethinking their systems, and fundamentally reshaping their business models. Together we can pioneer a “New Normal” that will reshape the world for the better.  

Rather than tightening our purse strings, as a society, we must invest to bring this New Normal to life, and at Hum Capital, we want to support innovative companies that will be at the forefront of driving systemic change. By providing non-dilutive growth capital to ambitious companies who are ready to embrace the opportunities to invest into a crisis at this strategic time, we think we can help position them to be the market leaders of the future. Think Facebook when everyone started chronicling their lives online, or Uber when ride sharing became a new mode of everyday transit. We at Capital have been challenging ourselves to imagine what life is going to look like going forward and have created what we call The New Normal Index: businesses that are made for this unique moment, businesses that we believe are poised to remake our world if they strike while the iron is hot.

Here are the key categories and business models that are part of our New Normal Index:

The New Normal Index

Prior to COVID-19, all of the above business categories were benefiting from secular trends already in process. Their management teams could envision an eventual tipping point, but they had not yet found the right catalyst for rapid adoption and widespread acceptance. That catalyst is occurring right now, as COVID-19 has driven unprecedentedly rapid shifts in consumer behavior and upended business models. We have created The New Normal Index to track businesses in these categories so that we can quickly and efficiently deploy capital into them to help them accelerate their growth. 

We think the businesses that are best positioned to lead the way in the New Normal are the ones that can significantly grow their customer bases without a commensurate increase in sales and marketing spend. For businesses in the index, we have seen that the cost to acquire customers has already on average fallen in half, leading to extremely profitable revenue growth and the possibility of rapid market leadership.

A chart that shows return on customer acquisition spend for a New Normal Index company.
A chart that shows customer acquisition costs spend for a New Normal Index company.
A chart that shows revenue growth for for a New Normal Index company.

How we can help your business embrace the New Normal

First, we would love to work with ambitious CEOs and CFOs to identify whether your business has the right patterns and potential mentioned above to qualify for inclusion in The New Normal Index. If it does, now is the time to invest heavily in growth. Over the next year or two, your business has the opportunity to rapidly accelerate and acquire market recognition and a durable set of customers that could catapult you to incumbent status. We’d like to help you with the following:

  1. Use the Intelligent Capital Market, our proprietary AI-driven platform, to analyze your business performance and measure whether you are poised for catalyst-driven growth in light of accelerated secular trends. 
  2. Provide non-dilutive debt financing to you to fund customer acquisition.
  3. Monitor your spending for one to two months to ensure your churn does not linearly increase with growth. It is key to prove that your growth is as durable now as it was before this economic turbulence.
  4. Support you going to market for equity financing at a valuation driven by your post-COVID-19 growth rate, which could unlock dramatically lower cost R&D capital to expand and fortify your business.

We believe that this moment is an ideal opportunity to invest in growth for the right companies in the right categories that are well-positioned to serve the New Normal of consumer behavior and business operations in the post-COVID world. We are honored to be able to support ambitious companies with non-dilutive growth capital as they make the New Normal a reality. Remember, it’s confidence in times like this and the hard work of businesses that moves our economy forward.

A chart that shows the population by income over time, facilitated by a New Normal.

Thinking about fundraising? Sign up for a free account on Hum’s Intelligent Capital Market, and learn what kind of financing your company might be qualified for today.