The New York Times has published an interesting (if also bleak) article exploring the challenges that the coronavirus pandemic is presenting for tech startups in particular. It’s a good read, especially for people within the music industry who work with music-tech startups.
One Silicon Valley exec who specialises in restructuring failed startups describes the current period as “the great unwinding” in terms of startups having to suddenly cut costs, lay off staff and in some cases rethink their entire product suddenly. “In just a few weeks, more than 50 start-ups have cut or furloughed roughly 6,000 employees, according to a tally by The New York Times. Plans for initial public offerings are on hold. And funding is drying up for many young tech companies,” explained the piece.
The latter point is worth remembering from a music perspective: some of the brightest startups around our industry could be facing big trouble now, if their business plans involved funding rounds later in 2020.
Veteran VC Bill Gurley of Benchmark offers a quote on how funding can suddenly disappear. “Risk on happens slowly. Risk off happens overnight.”
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