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Young companies and organizations looking for early-stage funding might have reasonably concluded that the Covid-19 pandemic was going to kick plans back months, if not years.

Nope.

Instead, data analyzed by ZoomInfo generally indicates that firms seeking angel or seed funding, private equity, or Series A or B investments have seen an increase in action during the period from April 2019 through April 2020.

Those results may seem counterintuitive considering the turmoil world financial markets were in, but such situations also provide opportunities for investors.

While the stock market plummeted during the pandemic, fiscal stimulus packages and interest from investors boosted stock performance back to 2019 levels by July 2020, CNBC reported. However, a recent rise in Covid-19 infections and an expected volatile presidential election create potential setbacks.

Figure 1: Early-stage investments generally showed an uptick from April 2019 to April 2020. Source: ZoomInfo.

All that said, an unstable market doesn’t equate to limited investments.

“While it’s likely that startups will need extra support, it’s also well known that some of the best venture-backed businesses were founded and funded in recessionary times,” David Blumberg, founder and managing partner at Blumberg Capital, wrote for Crunchbase News in May 2020. “Examples include Facebook, Microsoft, Nutanix, and Electronic Arts.”

As a quick refresher, seed and angel rounds are small amounts and help a startup get off the ground. Private equity is funding from an equity firm or hedge fund, while series A and B are early-stage rounds that help startups obtain more customers or increase operations.


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About the author

Scott Wallask

Scott Wallask is Director of Content at ZoomInfo, the leading business contact database and sales intelligence solution.

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