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Photo: iStock
Photo: iStock

Opinion | Startup trouble

The pain itself isn’t surprising, given the economy-wide impact covid and the ensuing lockdown have had, but the extent of it is worrisome.


Another group of businesses could end up as casualties of our covid crisis: startups. A survey by Nasscom has revealed that nine-tenths of them have seen revenues fall, more than a third have suspended or are shutting operations, and more than two-thirds are precariously placed, with cash to survive for less than three months. The pain itself isn’t surprising, given the economy-wide impact covid and the ensuing lockdown have had, but the extent of it is worrisome.

Since such ventures lack the wherewithal of established businesses, they are especially vulnerable to such crises. Many operate on shoestring budgets, and while official schemes do exist for their funding, they depend on business accruals and tranches of venture capital to keep going. If their odds of success are seen to diminish, their supply of money often gets cut off. Entrepreneurs, of course, are no strangers to risk. But it would be unfortunate if a lot of dreams are wiped out by the circumstances that prevail. Perhaps the debt-averse among them could turn to banks, but would bankers be as receptive to innovative ideas—that most startups typically bet on—as risk-happy venture capitalists?

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