100X.VC, the first Indian venture capital fund to invest in early stage startups using India SAFE Notes, has come up with a study titled ‘India Sentiment Outlook Survey’ which analyzes the impact of COVID-19 on investors and founders. Among the highlights of the in-depth study are:
A large majority of the founders and investors feel that the Indian economy will recover within 12 months and subscribe to the view that there will not be a ‘prolonged winter’ of recovery ahead.
Around half the founders and 60% of the investors show signs of worry in the present crisis.
The major worry of founders seems to be declining revenue, cash blowout and handling the current crisis. They see 3 areas of cost cutting – marketing, office and salaries.
Around two-thirds of investors say they will be shifting their investment strategy. One-fourth are planning to change the strategy significantly, while more than one-third are not planning any change.
More than 70% of the investors who responded say they are seeking lower valuations from founders and 86% of the investors will now look at industries which are positively impacted by the crisis.
As much as 91% of investors will delay their investments in early stage startups, adopting a wait-and-watch attitude, while only a miniscule (7%) have stated they will not invest at all.