Many startups in the Brainport region have an urgent need for emergency financial aid as a result of the corona crisis. These startups cannot call on existing emergency aid as announced by the Dutch government, states Brainport director Paul van Nunen in the local newspaper Eindhovens Dagblad.
To qualify for the current aid system, companies must show that they’re facing a sudden drop in turnover. Van Nunen explains that dozens of startups within his region are unable to do so, as they’re hardly making any money at all. Still, these companies experience financial problems due to the corona crisis. Investors are withdrawing or suspending their support, often because they need these financial resources to keep their own businesses afloat.
Without financial aid, the crisis could cause several promising companies to collapse. Van Nunen hopes to prevent this. “Together with the municipality of Eindhoven, the regional government, the province and the banks, we’re looking into creating an emergency solution for these startups as well, just as for the self-employed, the hotel and catering industry and small and medium-sized enterprises,” he told ED.
Het Financieele Dagblad reports that startups in Silicon Valley are facing a similar problem. They’re experiencing a significant reduction in available venture capital. Most investors prefer to help out companies in which they’ve already invested.