The investment environment for VCs has changed substantially. These are very uncertain times for business models and are challenging for fundraising. VCs need to re-evaluate everything in this context. Customer revenues likely will be slower to ramp up, follow-on investments will be harder to obtain and will take longer to accomplish and exits – whether through mergers and acquisitions or IPOs – will be delayed. Therefore, all companies need to husband their cash and hunker down to manage during this crisis.
“Companies active in the fight against COVID-19 will have plenty of funding, and those targeting severe unmet needs will weather the storm better than others. But, for the rest, it will be rough for the next 12 months,” said Otello Stampacchia, founder of Omega Funds.