41 percent of startups globally have three months or fewer of runway

Updated on

To better understand the impact of the COVID-19 crisis on startups globally and equip governments with tools and actionable insights to support their innovation ecosystems, Startup Genome launched the world’s first global startup survey on the topic. This continues our broader initiatives on the impact of COVID-19 on global startup ecosystems, like Global Policy Knowledge Base and our ongoing Research Series.

Key findings from this global survey analysis are:

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Covid-19 Crisis On Startups

Covid-19 Crisis Impact On Startups: Capital

  • 41 percent of startups globally are threatened in what we call “red zone”: they have 3 months or fewer of runway. Many very young startups live with only a few months in cash—29 percent were in that situation already before the crisis—but the crisis put 12 percentage points more of them in that precarious position. Focusing on startups that Series A, B, or later rounds, 34 percent have fewer than 6 months worth of cash — a danger zone in the current situation where fundraising is difficult.
  • Of startups that had a term sheet before the onset of the crisis, nearly 20 percent have had the term sheet cancelled by the investor, and 53 percent have seen the process slow down significantly or have faced an unresponsive lead investor. Only 28 percent have had the process continue normally or have gotten the funds.

Covid-19 Crisis On Startups

Talent and Jobs

  • 74 percent of startups have had to terminate full-time employees since the beginning of the crisis. 39 percent of all startups had to lay off 20 percent or more of their staff, and 26 percent eliminated 60 percent of employees or more. When we break down the share of startups that had to terminate full-time employees by the top three continents for startup activity, North America is the place with the biggest share of companies laying off (84 percent), followed by Europe (67 percent) and Asia (59 percent).



  • 74 percent of startups saw their revenues decline since the beginning of the crisis. The most common category for change in revenue is a relatively modest decline. However, a sizable share of companies were very heavily hit: 16 percent of startups saw their revenue drop by more than 80 percent. A major reason for the drops in revenue come from the effect of the crisis on industries those startups serve. 3 out of every 4 startups work in industries severely affected by the COVID-19 crisis.
  • At the same time, a small minority of companies is actually experiencing growth. 12 percent of startups have seen their revenue grow by 10 percent or more since the beginning of the crisis, and 1 out of every 10 startups are in industries actually experiencing growth. Every crisis creates opportunities. For instance, over half of Fortune 500 companies started during a contraction, and over 50 unicorns were created in the Great Recession alone, as Startup Genome data shows. The COVID-19 crisis is no exception.
  • The hurt and the growth are not evenly distributed. B2C startups are about three times more likely to be in industries experiencing growth when compared to B2B startups.


Operations and Management

  • Over two-thirds of startups have reduced their expenses since December 2019, with the lionshare of those doing relatively small cuts. Some companies, however, cut costs very aggressively, with over 1 out of every 10 companies cutting costs by over 60 percent.
  • Nonetheless, tech startups are uniquely situated to continue operating even in lockdown scenarios. Unlike many traditional businesses, 96 percent of startups responded that they have continued working during the crisis, even if there is significant disruption.



  • 38 percent of startups are not helped and do not expect to be helped by policy relief measures related to the crisis, while 16 percent are not currently helped but expect to be helped by a policy measure soon. The remaining 46% of startups are currently being helped.
  • According to founders and startup executives, the top four most helpful policy responses for their businesses would be, in order: #1 Grants to preserve company liquidity (29 percent), #2 Instruments to boost investment (18 percent), #3 Support to protect employees, like payroll supplementation grants (17 percent), and #4 Loans to preserve company liquidity (12 percent).

In the coming weeks and months Startup Genome will continue publishing insights on the impact of the coronavirus crisis on startups, and building tools for governments and ecosystems to support their startups through the crisis. You can sign up here to get it.

If you are a policymaker or ecosystem support organization and would like to deploy the COVID-19 Impact Global Startup Survey in your community and get detailed insights about what is happening on the ground (and how your ecosystem stack up with what is happening globally), please reach out to Adam Bregu ( [email protected] ).

1070 respondents answered the survey, across every continent and in over 50 countries. If you are a startup and want to take the survey to share what is happening in your business and market, you can take it here . Your input is crucial.

See the full report here.