SINK OR SWIM Inside the Covid-19 Impact on Philadelphia’s Startups, Investors
Running a startup is hard. Talk to any founder and they’ll have a story about hard-fought survival and how grit or a few strokes of luck meant the difference between shutting their company’s doors or raising that next round of cash. During the Covid-19 pandemic, their jobs – and the work of investors who back them – is getting even harder.
Leaders in Philadelphia’s entrepreneurial ecosystem say there’s no doubt some startups won’t survive the financial pressures caused by the coronavirus and widespread stay-at-home orders. Venture capital dollars will be harder to come by.
The effects are showing already, according to data from Pitchbook and the National Venture Capital Association. In the first quarter, 44 venture capital deals were completed in the Philadelphia region, the lowest count since the fourth quarter of 2016. The deals totaled $151.75 million, about half the total amount raised in each of the prior eight quarters. The economic impact of coronavirus didn’t even hit the U.S. until the last month of the quarter, foreshadowing even worse numbers for the second quarter.
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