Insight

COVID-19 and the VC markets

Explore first-quarter venture capital (VC) market results to find out how companies and investors responded to the immediate impact of COVID-19.

Conor Moore

Conor Moore

Partner, National Leader, KPMG Private Enterprise, KPMG US

+1 415-335-8401

Salvatore Melilli

Salvatore Melilli

Partner, National Audit Leader, KPMG Private Enterprise, KPMG US

+1 212-872-6030


 

The VC market in the U.S. was quite robust pre-COVID-19. Valuations were high. Dollar amounts were high. It remains to be seen how much multistate lockdowns impede deal-making in Q2, though the extent is likely to be considerable.
– Conor Moore, National Leader, KPMG Private Enterprise, KPMG LLP

How has COVID-19 impacted U.S. venture capital (VC) markets? 

Q1’20 was unlike any quarter on record. The emergence of the novel coronavirus COVID-19 derailed all expectations for the year, putting previous trends and concerns—such as Brexit and the U.S.-China trade tensions—on the backburner.

The relatively long lead times for deals helped keep the VC market on an even keel even as the effects of the global pandemic began to make waves in the U.S. economy and public markets. Looking ahead, however, we see a number of challenges that could depress the VC markets until at least the end of 2020.

In this edition of Privately Speaking, we dig into the first-quarter results to see how the VC markets responded to the immediate impact of COVID-19. And we offer some insights and opinions on how the experience has changed future investment flows.

In the second quarter, we can expect VC investors to become more selective and focus their investments on established companies that have long-term growth potential and the proven ability to withstand a global crisis.
– Sal Melilli, National Audit Leader, KPMG Private Enterprise, KPMG LLP

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