NFX —an early-stage venture firm based in San Francisco— surveyed 451 seed-stage and Series A Founders and 141 VCs in June 2020 to capture sentiment data during the COVID-19 crisis. The VC & Founder Sentiment Survey is an ongoing initiative to track how early-stage Investors and Founders are reacting to the COVID-19 crisis. The goal is to provide a reference point to the community in the midst of one of the most unpredictable climates we’ve seen.

1. JUNE 2
2020
Part II

2. NFX is an early-stage venture firm based in San Francisco that
is transforming how true innovators are funded. As founders
ourselves, we built 10 network effect companies with more
than $10 billion in exits across multiple industries and
geographies.
We believe that creating something of true significance starts
with seeing what others do not.
www.nfx.com @nfx

3. Introduction
About the Survey

4. The VC & Founder Sentiment Survey is an ongoing
initiative to track how early stage Investors and
Founders are reacting to the COVID-19 crisis.
The goal is to provide a series of reference points over
time to the community, in the midst of one of the
most unpredictable climates we will ever face.
Part I of The Sentiment Survey was conducted on April 3rd, 2020.
This is our June 2020 check-in with VCs and Founders
to see how they are feeling and responding
nearly 2 months later.
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5. Sentiment Survey #2 - June 2, 2020
451 Seed-Stage & Series A
Founders
141 VCs
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6. The survey data captures how both tech VCs and startup Founders
feel about the COVID-19 pandemic, including:
● How VCs and Founders are grading the Federal Government's
handling of the pandemic?
● How VCs and Founders really feel about remote work, once
the quarantine is over?
● What tech startup valuations are looking like now, several
months into the pandemic?
● Which tech markets are seeing significant revenue gains vs.
revenue losses?
● How VCs really feel about funding companies that are fully
remote, going forward?
● At what rate are VCs investing compared to pre-COVID-19?
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7. Key Findings
1. Startup Valuations Continue Dropping
○ 60% of VCs have seen valuations drop by 20-30% so far as a result
of COVID-19. They predict additional decline in valuations over the
next 12 months, adding up to an average predicted decrease of
40.1% in valuations.
2. VCs Find Remote Companies Less Attractive As Investments
○ Though 74% of Founders plan to move to majority or fully remote
work, nearly 60% of VCs report that remote teams are less
attractive as investments.
3. VC and Founder Predictions for Economic Recovery Are Getting
Worse, Not Better
○ Founders remain much more optimistic than VCs about how long
it will take for the economy to recover. Still, Founders and VCs alike
have revised their predictions for the worse.

8. Key Findings (cont’d)
4. Startups May Have A Competitive Advantage In Their Speed To
Adapt To Changing Market Conditions.
● 40% of tech founders have reported no change to revenues; and
20% have reported an increase in revenues.
5. Startups Are Still Hiring (And Getting Talent For Less $$)
● 60% of Founders are still hiring (some slower than usual; some
playing offense and hiring more aggressively).
● Of those companies hiring, 50% report lower salary
requirements for new hires than before the pandemic.
6. 60% of Tech Startup Founders give the Federal Government’s
handling of the COVID-19 pandemic a D or F failing grade.

9. VC & Founder
Survey Data

10. 8

33. NFX is an early-stage venture firm based in San Francisco that
is transforming how true innovators are funded. As founders
ourselves, we built 10 network effect companies with more
than $10 billion in exits across multiple industries and
geographies.
We believe that creating something of true significance starts
with seeing what others do not.
www.nfx.com @nfx