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Over the course of the past several months, we have entered the worst recession in recent history, and the uncertainty is having a ripple effect on entrepreneurs everywhere. Businesses are plotting their next moves and conserving cash in every way possible, hoping to survive the next few months however they can.
The dominos are falling fast. Jobless claims are through the roof, and countless retailers will likely go out of business. It’s not all gloom and doom, though. Venture capitalists are still sitting on record amounts of uninvested cash — an estimated $189 billion as of last summer, to be exact. They are currently holding their money close to their chests, but they will put that capital to work once the dust settles.
A similar phenomenon occurred during the 2008 recession. Seed funding was the first thing to scale back as venture capitalists invested roughly half of what they were investing each quarter just two years prior. The venture market faced depressed valuations for 18 to 24 months, and startup growth slowed because