Venture capital in a time of crisis
- On January 8, 2021
- By GrowthInvest Marketing
In March 2020 we were on the verge of launching an green EIS impact fund called OnePlanetCapital. After 8 months of planning, sourcing partners and developing the game plan we were literally days from going live and starting to raise funds….and then Covid19 struck. The excitement of being about to launch a new venture and the real motivation of that being an environmental impact fund was immediately replaced with the realization that nothing in the investment world would be normal for a long time.
EIS funds are obviously reliant on investors, and most investors will be badly affected by the pandemic in terms of their portfolios and their general investment holdings. This will obviously make high risk and early stage investments less attractive right now. Many start-ups will have problems deploying their businesses at this time anyway. The effect is a deep freeze on start-up funding in most cases.
The other thing that is clear – any VC with exposure to early stage companies has to protect their existing portfolio first and foremost. Cash runways have to be extended, revenues will largely be down, and any fund has to back its strongest investments at this time.
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