April 28, 2020
Source: Mark Coggins, Wikimedia Commons
Good morning! This Tuesday, NVCA thinks a capital crunch is coming, tech CFOs are feeling a little better, and Bloomberg Beta wants you to prepare for the worst. Want Index in your inbox each morning? Subscribe here.
As of 4:10 a.m. PDT: Nasdaq Futures: 1.11% | Euro 600: 1.51% | Nikkei: -0.06% | Hang Seng: 1.22%
We all know things aren't great in the funding ecosystem, but just how bad are they? According to a new whitepaper from the National Venture Capital Association … pretty awful.
Speaking of which, turbulent stock markets are bad news, because they mean IPOs will be delayed. "Delayed exits will make liquidity harder to come by," NVCA says, "requiring VCs to stretch their dry powder further."
The upshot? NVCA thinks things are about to get really, really bad. "The reality is that companies will shut down — at a higher rate than what is inherent to this risky industry — and there will be waves of layoffs," it writes. "It's going to be a bumpy ride."
In some corners of the tech industry, things are looking a little sunnier. According to a new survey from PwC, tech CFOs are increasingly confident that their businesses can withstand coronavirus.
M&A sentiment also remains strong in tech.
But some things will change.
Tech could see windfalls, though: 40% of all CFOs surveyed said they now plan to accelerate automation and new ways of working.
You've probably never heard of Accesso, but if you've been to Legoland (which happens to be my favorite place in the world) you may have used its virtual queuing system. Turns out that theme park tech is a terrible business to be in right now, especially if you're paid each time a rider buys a fast track pass: Accesso's April revenue is "expected to be down by 72% year-on-year." But its CEO thinks it may be poised to win whenever we all start riding roller coasters again: If traditional lines are deemed too dangerous, virtual queues might become a new norm.