Since the beginning of the year, Chinese venture capital deals have fallen over 50%. If a similar magnitude is applied globally, a whopping $28 billion in investment will vanish in this year alone according to Startup Genome. COVID-19 stands to be an extraordinary challenge for all businesses. Silicon Valley, where leading edge technology and the hottest startups have made their home for decades are facing the biggest crisis they’ve ever seen.
Despite the challenges the pandemic has brought upon them, risk taking and resilience are inherent to entrepreneurs. They are using their inventiveness to respond and adapt to the crisis. Startups play a critical role in economic growth by creating jobs and injecting innovation and competition into the market; they are the core economic drivers not just to the tech heartland but the global economy. Technologies like Zoom and Slack have made it possible for the world to carry on and remain at some level of productivity during COVID-19. Startups are also at the front line in pinpointing the creating solutions to the problems brought by COVID-19. A great example would be the digital health startup Velmio. The company uses AI and lifestyle tracking to assess the risks of possible complications for mothers-to-bes. The company recently pivoted their technology and came up with a ‘coronavirus tracker’ to analyzes user symptoms and estimate their COVID-19 risk level and to the nearby locations.
Startups are essential to the longer term success of our economy. Regardless of the magnitude of the pandemic, policy and actions need to be implemented to protect the startup ecosystem. Government leaders need to take immediate actions because startups will end up saving your economy in the long run.