A majority of US startups (52 per cent) are now ‘very optimistic’ about the next 12 months, despite 62 per cent seeing business growth negatively impacted by the pandemic.
This was a key finding of a new study of US startup sentiment coming out of the pandemic, by Angel Investment Network (AIN), the world’s largest online angel investment platform. The study of 1,205 US based startups found 76 per cent expressed optimism overall with 19 per cent quite optimistic and 52 per cent very optimistic, versus just 24 per cent who were pessimistic.
The results show the extent to which confidence has returned to early stage businesses, who are emerging strongly from the downturn. Of the 62 per cent of respondents who revealed they had been negatively impacted by Covid, 37 per cent had been ‘very negatively impacted’. Meanwhile 63 per cent of those who had been planning to raise funds said they had delayed a raise as a result of Covid.
Top strategies to mitigate the impact of stalled fundraising were: Focusing more on networking, favoured by 46 per cent of respondents, holding off launch plans (38 per cent) and bootstrapping instead (32 per cent), with a similar number delaying marketing.
Entrepreneurs were also asked what their biggest challenges were going forward. The top result given was raising investment (84 per cent), hiring/recruiting the right talent (22 per cent) and product development (22 per cent). Ongoing Covid issues were a problem for 13 per cent of those polled.
US startups also believe more Government action is needed to encourage investment and help startups flourish. 57 per cent favour making tax relief more generous to boost angel investment, 32 per cent making R&D tax relief more generous and 22 per cent lowering corporation tax. 70 per cent of respondents are confident the US will retain its place as a startup hub.
AIN has seen surging growth on its platform with connections between entrepreneurs and investors up by 23 per cent since the start of the year. Meanwhile revenues have increased by 40 per cent to a new record, indicating the huge pent up demand from startups now seeking funding.
According to Mike Lebus, founder of AIN, says: “It is encouraging to see how US startups have shown their mettle to ride out this really difficult period and emerge battle tested and with high levels of confidence. Many have been negatively impacted but have used their time wisely to build up their pipeline of contacts and bootstrap their businesses as far as they can go. RaIsing investment remains the biggest challenge going forward and as the world’s largest angel investment platform, we have been encouraged by seeing a record number of connections between investors and startups.”
