Silicon Valley investors and start-ups are stuck in limbo due to the coronavirus.
Private deals are being held up thanks to new economic risks and “shelter in place” restrictions making it impossible to evaluate start-ups in person. Tech valuations, which rely on future growth, may also take a hit.
“I don’t see too many term sheets being issued in the next two to three weeks until there’s more clarity,” said Ryan Gilbert, general partner at Propel Ventures. “It’s certainly drying up — people are worrying more about themselves and their families than they are about pitching VCs.”
The coronavirus outbreak has sent global markets into a tailspin. On Wednesday, the S&P 500 closed nearly 30% below a record set last month as it sank further into bear market, and economists have slashed U.S. and global GDP forecasts.
Meanwhile, major cities are on lockdown. San Francisco and the greater Bay Area — the epicenter of venture capital — are in the midst of a “shelter in place” order. New York City is expected to go the same direction and some international travel bans are still in effect. Read the full story here.