Keep your eyes peeled, the global epidemic has brought out the true colors of everyone. A particular group that has been exposed to current circumstances are venture capital firms.

There are a lot of people out there that believe VC’s and businesses are one and the same. This is not entirely true and now we see exactly how their motives differ more than ever!

For instance, VC’s are holding on to their money pretty tightly these days and it’s not because COVID has wiped them out of business. That’s right, just when startups needed them the most, the well went dry. But why? Aren’t these guys just sitting on capital?

 The short answer is yes. However the issue is their interest in start-ups is rapidly declining due to the risk posed during this crisis. In fact, start-ups in telehealth, video streaming, online education and other similar industries  are the only reasons investment transactions are happening at this time.

The increasing demand of these products/services have piqued the interest of investors. Other than that, you can forget about funding from VC’s at the moment especially if your business falls within an industry negatively impacted by Coronavirus. Unless, of course, you’re one of their precious unicorns and even their patience for them is wearing thin at this point.

VC’s are not only holding out on funding startups, but they are also tightening up on their criteria of later-stage funding. Investments in the near future will be extremely rare except for start-ups that provide products or services that fulfill the unique needs created by the outbreak. 

This may come as a slap in the face for businesses that thought they had a good relationship with VC’s, but hey, that’s business. I’ve said it once and I’ll say it again, business isn’t for the overly-sensitive. 

It’s been said that venture capitalists are sitting on $120 billion in funds, but even if they are, that still wouldn’t be enough to keep all their businesses afloat. However, they could do much better in determining where these funds are allocated. As small businesses continue to furlough, layoff and even close due to the lack of financial backing by their VC’s, you tell me, does it seem like the venture capitalists are loyal to the small businesses that are the backbone of the American economy? Or are they simply loyal to their own wallets? 

So far amid this crisis, they haven’t really shown that they are motivated by helping small businesses and creating jobs. The number one motivation thus far has been money. So this brings us back to the question, are businesses and venture capitalists one and the same? I’ll leave that up for you to decide.