NFX, a seed-focused venture firm, surveyed its founder and VC network of 286 founders and 114 VCs, who provided their insights about how startups are responding to the impact of the COVID-19 pandemic.
Startup reaction to the downturn has been swift, less than two weeks from the first shelter-in-place order in California on March 19. Of those surveyed, 24 percent of pre-Series A companies had already made layoffs. Venture firms generally advise their startups to respond quickly to a crisis, and make the cut once, so the rest of the team can focus on going forward without further impact to team morale.
The three areas startup founders will focus on to reduce spending are: cut office expenditures (52 percent), cut marketing costs (39 percent) and institute a hiring freeze (38 percent), according to respondents.