Likewise, companies must decide whether to raise money now or delay fundraising plans. Companies must make these decisions, and investors must make their investment decision, without significant time for deliberation and must consider the company’s current funding needs, any actual or potential market liquidity constraints, extended sales and payment cycles, and the economic outlook postpandemic. To assist companies and investors evaluating funding decisions in the era of COVID-19, this article addresses how investors might seek to protect their investments, as well as what terms new investors in a company may expect (or even demand) as a condition to investing, if private financing markets do not return to their activity and/or valuation levels prior to the pandemic.1 We use the term “venture” in this article to encompass both earlier-stage venture investments and later-stage investments, which are sometimes referred to as “growth” investments. Some of the potential changes to investment terms discussed in this article are more applicable to later-stage growth investments than those in early-stage companies.
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