As the country most certainly heads into a sharp and sudden COVID-19–driven recession, many start-ups are concerned about the impact on the appetite for early-stage investment. According to a survey of early-stage investors by 500 Startups, 83% said the COVID-19 crisis is having an impact on their investing activities.

“In the immediate term, entrepreneurs need to cut their burn, raise money if they can and reset expectations around valuation. Assets are worth less than before,” Robert Siegel, a lecturer at the Stanford University Graduate School of Business and investor, told Crunchbase. “Right now, an entrepreneur’s job is survival, and if they’ve got 18-24 months cash in the bank, that’s great. If they don’t, they’re going to have to figure out how to get there.”

The Numbers from 500 Startups Survey (139 early-stage investors participated):

• 53% of respondents will invest in the same stage as planned prior to the pandemic.
• Investor interest is rising in healthcare (47%) and remote work solutions (42%).
• The majority of investors think COVID-19 will have a negative (32%) or somewhat negative (36%) impact on early-stage investment activity in 2020.
• 63% expect the startup and early-stage investment community will experience an impact for 1-2 years.
• Most respondents agree on the advice to startups—decrease costs, increase runway, and focus on the consumer.

The general consensus in the investment community is that deals will continue to get done with businesses that have solid brand propositions and good unit economics. The days of “growth at all cost” are gone. Investors want businesses with sustainable growth with a clear path to profitability.