Venture capital investors are used to dealing with plenty of risk and uncertainty—so how have they fared amid the risks and uncertainties caused by the COVID-19 pandemic?

Not that badly, actually.

That’s what Harvard’s Paul Gompers, University of British Columbia’s Will Gornall, Chicago Booth’s Steve Kaplan, and Stanford’s Ilya A. Strebulaev find in a survey of more than 1,000 venture capitalists.

COVID-19 hit VCs along with the rest of the business world, as pandemic lockdowns crippled many companies and even entire industries. VCs slowed their investment pace by nearly 30 percent in the pandemic’s early months, and some of their portfolio companies were slammed, the researchers find.

But it could have been far worse. VCs themselves issued dire predictions when pandemic-related closures took effect in the United States in March 2020. Sequoia Capital warned investors that “coronavirus is the black swan of 2020,” and Angular Ventures declared that “the global VC market has completely locked up.” Considering the role of the $130 billion-a-year VC industry in powering innovation and high-growth companies, the researchers’ findings are good news for an economy battered by COVID-19.

The team conducted their survey in June and July 2020. The bulk of the VCs in the sample worked as private fund managers with early-stage startup companies. The researchers were able to compare responses with findings from a similar survey they conducted in 2016.

VCs’ investment pace slowed to 71 percent of normal expected activity in the first half of 2020, the research demonstrates. Respondents said they expected to invest at only 81 percent of their normal pace in the coming year. Two-thirds of the VCs were making fewer investments, according to the survey. This may be because the pandemic made it more difficult for them to travel and have the kind of in-person meetings they’d usually hold before investing in a company.

The industry itself seems to have fared better during the pandemic than during the aftermath of the 2008–09 financial crisis or the 2001–02 bursting of the dot-com bubble, according to the researchers. While the pandemic and its accompanying uncertainties are far from over, the researchers say that the responses suggest the VC industry has been “more resilient than many other sectors of the global economy.”

Why? The researchers speculate that VC-backed companies may have been spared the worst of the effects of lockdowns because they were able to switch to remote work more easily and because they tend to have ample cash and not much debt. The economy’s volatility amid the pandemic may also have helped some VC companies, the researchers suggest. To the extent that VC-backed businesses tend to focus on innovative technologies and business models, some may actually benefit in a volatile environment.

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The VCs surveyed also said 10 percent of their portfolio companies were “severely” hurt by the pandemic, with an additional 38 percent injured but not in “critical condition.” Those numbers are “substantially more positive than we had expected,” the researchers write.

VCs expect the pandemic to have only a small negative effect on their profits, reducing internal rates of return by 1.6 percent, the researchers report. But they caution that the aggregate numbers may hide the fact that there have been some big winners and some big losers that have averaged out.

Industry participants are optimistic about their future performance, the researchers say: 91 percent of institutional VCs said they expected to outperform the stock market, and almost 75 percent predicted that the industry as a whole would do so. To the extent that COVID-19 has crimped their investment pace, VCs expect the impact to be “relatively short-lived.”

Two quarters after the survey, it looks like the VCs were right. With the revival of the stock market—particularly for tech companies—not to mention the stunning resurgence of the IPO market, VC returns are likely to have surged in the pandemic.

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