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How hard has the COVID-19 situation been on start-ups?

How hard has the COVID-19 situation been on start-ups?

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42% have less than a 3-month runway.

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But there are more worrying facts.


38% of them are already out of funds.

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This means - 80% of start-ups would have run dry if something big does not happen.


How are they planning to respond?

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Shut-down, for good: 14%

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Scale-down, operations: 35%

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Pump-up, the growth engines: 35%


& 16% don’t really know what to do.


Currently proposed solutions petitioned:

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Solution 1: Many of these start-ups petitioned for bailouts from the Govt.

My 2 cents: This is just not going to happen – simply because an agreeable democratic distribution is impossible for economic bailouts.

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Solution 2: Get banks to lend more.

My 2 cents: A vast majority of banking is run by/ like the private sector with shareholders. Govts could see the move as a band-aid on a deep wound as defaults will rise if recovery takes longer. Capital would erode in both primary & secondary markets. Also, Govt bodies just don’t have the float to cover nationwide lending.


Is there a solution you see? I would love to know.



Source:

LocalCircles

Survey of 8,400 start-ups & entrepreneurs



2 Comments


Pradyumna Nag
Pradyumna Nag
Jun 19, 2020

Very true Prem.


I think customer love is what will define businesses that make through tough times.

Like

Prem Kumar
Prem Kumar
Jun 19, 2020

Customers current and potential you will be surprised how much help you can get from them if you really add value

Like

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