Survey shows startups worry about runway, cut staff amid pandemic

Startups are struggling to survive the COVID-19 pandemic, and about four in 10 startups suggest they have three months or less of runway. That’s one of the key findings of a new global survey conducted by Startup Genome, a research and advisory organization focused on startup ecosystems.

Those three-month projections assume companies’ revenue and expenses remain steady, and that the startups don’t raise any additional capital. In December, about three in 10 startups said they would go out of business in three months.

Some startups that were in the process of raising new funding before the pandemic hit are now seeing those investment prospects jeopardized. Of startups that had term sheets before the crisis, 20% have seen deals cancelled by the investor, according to the survey, and 53% of have seen a significant slowdown in the funding process. Only 28% have continued to move forward with agreements normally or received funds.

COVID-19 has caused the majority of startups to cut jobs. Globally, 74% of startups have terminated full-time employees, according to the survey. In North America, that figure rises to 84%.

According to the survey, about three in four startups have seen revenue decline since the onset of the pandemic. Conversely, about one of every 10 startups has experienced revenue growth.

The survey consisted of 1,070 respondents across 50 countries between March 25 and April 17, according to Startup Genome. The startups come from every sub-sector, various markets and different funding and lifecycle stages.


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