The COVID-19 pandemic has caused unprecedented business interruption across nearly all industries, with tech startups facing some of the greatest challenges. Venture capital funding has quickly become more selective, which can hurt companies dependent on a steady infusion of capital. Some startups are seeing dramatic revenue reductions because existing customers are either unable or unwilling to pay on time. Revenue is falling short of pre-COVID-19 financial projections because prospective customers are tightening their belts. Supply chain disruptions have left a few startups unable to manufacture or sell their goods, and even though employees are largely working remotely, commercial landlords have taken firm positions with respect to rent. To top it off, insurers have been unreceptive to force majeure claims.

It has not all been bad. On the positive side, tech startups are relatively well situated to adapt to remote working arrangements. Also, the interruption has directly benefited companies offering online services, cloud infrastructure and automation technologies. COVID-19 may increase demand for cutting-edge and disruptive services. In the meantime, a number of tech startups have pivoted to create offerings related to COVID-19, such as diagnostic and therapeutic tools and solutions.

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