Why the crisis forces startups to rethink
The recent collapse of the Silicon Valley Bank, that focused on financing tech companies and start-ups, has put even more pressure on an already struggling startup sector. With venture capitalists already exercising caution, the liquidity bottlenecks caused by the collapse have further threatened the scene. Though authorities and investors are working to limit the damage and save parts of the institution, SVB, which collapsed just over a week ago, the increased nervousness on capital markets in Europe and elsewhere is making life even harder for young companies.
Unfortunately, this comes at a time when startup financing is already much more difficult to obtain than it was until the middle of last year. In Austria, for example, startup financing has plummeted by about 86 percent since mid-2022 and has yet to recover in the current year. As a result, the scene is facing another twelve challenging months.
According to reports from the industry, the coming months are unlikely to bring any relief to the struggling startup sector. With interest rates on the rise and a challenging year for investments such as stocks and bonds, capital providers are becoming more risk-averse and less liquid. However, this is only part of the story, as the lack of venture capital in Austria was already a problem before the current crisis.
Our Managing Partner (CEO) Berthold Baurek-Karlic gave his statement to Austrias Newspaper “Die Presse” on this subject.
You can find the full article (in german) here: https://www.diepresse.com/6265069/warum-die-krise-start-ups-zum-umdenken-zwingt?from=rss