For startups, camels are a more appropriate mascot. Camels adapt to multiple climates, survive without food or water for months, and when the time is right, can sprint rapidly for sustained periods of time. Unlike unicorns, camels are not imaginary creatures living in fictitious lands. They are real, resilient and can survive in the harshest places on Earth. While the metaphor may not be as flashy, these startup camels prioritize sustainability, and thus survival, from the get-go by balancing strong growth and cash flow.
Financial Distancing: How Venture Capital Follows the Economy Down and Curtails Innovation
Although late-stage venture capital (VC) activity did not change dramatically in the first two months after the COVID-19 pandemic reached the U.S., early-stage VC activity declined by 38%. The particular sensitivity of early-stage VC investment to market conditions—which we show to be common across recessions spanning four decades from 1976 to 2017—raises questions about the pro-cyclicality of VC and its implications for innovation, especially in light of the common narrative that VC is relatively insulated from public markets. We find that the implications for innovation are not benign: innovation conducted by VC-backed firms in recessions is less highly cited, less original, less general, and less closely related to fundamental science. These effects are more pronounced for startups financed by early-stage venture funds. Given the important role that VC plays in financing breakthrough innovations in the economy, our findings have implications for the broader discussion on the nature of innovation across business cycles.
In times of great uncertainty, people, naturally, tend to “fold in” and contract. They reduce their personal spending and cut their corporate budgets. It’s obvious that money will be hard to come by. This article shares five critical steps that leaders can take to protect their companies.
Entrepreneurs beware: you’ll have to work extra hard and take extra painful decisions for your startup to survive the coronavirus crisis. The warning comes from Elaia, a venture capital firm based in Paris, who like several European investors isn’t sugar-coating its message to entrepreneurs on the kinds of challenges the coronavirus pandemic poses for startups.
Down rounds raise a number of delicate and important issues for companies and investors, including impacts on employees and investors; fiduciary duty considerations for the company's board (and others), along with a heightened risk of stockholder litigation; and oftentimes complex structuring considerations. In this alert, we provide an overview of such issues—to serve as a refresher for those who have been through down rounds in the past and as a primer for those who have not—as well as practical steps and suggestions in navigating a down round.
Viola Data: Coronavirus and its Impact on the Israeli Tech Ecosystem
In an attempt to quantify the effects of the Coronavirus on the Israeli tech ecosystem, Viola Group sent out surveys to their forums of HR and C-level professionals. With a combined total of more than 150 responses, the data set shows that the virus is already affecting major business decisions, including hiring policy, travel policy, demand generation, deal close, and more.
What Advice Are Venture Capitalists Giving To Startups In Light Of The Coronavirus Crisis?
The coronavirus pandemic is broadly affecting businesses globally, but it is affecting startups particularly hard. In this article, I have gathered some key advice to startups from leading venture capitalists and others connected to the venture industry.