In 2019 investors poured $136 billion into U.S. startups. Many of which were chasing revenue with little regard for profit. The mentality, per an article in the WSJ citing one such founder was “if you throw enough capital at it, you eventually figure it out.”
Investors were losing their patience with cash burning startups before the coronavirus crisis. Pressure to rethink infrastructure and move towards profitability has grown far more intense in the wake of the pandemic. The quote continues:
“When you have an overabundance of capital, you don’t have to prioritize as ruthlessly. They have to make really hard decisions now.”
It will be interesting to see what this funding figure looks like at the conclusion of 2020, and to see which companies adapt quickly enough to survive.