Funds
‘The Runway Fund’ Looks to Provide Relief for Start-ups Impacted by COVID-19
Help is On the Way
COVID-19 has had its way with the global economy over the past few weeks, resulting in unprecedented levels of hardship for most of the world.
A select group of start-ups have just been provided a potential lifeline, though. A new fund was recently established with the specific goal of providing promising start-ups with the runway needed to outlast the pandemic.
This is known as ‘The Runway Fund’, and is comprised of a current $10 million – with more on tap if required.
While COVID-19 may be the cause of the world's current disarray, another reason The Runway Fund was established is due to the nature of stimulus packages announced, thus far. When speaking with Forbes, Hasson elaborated by stating,
“There is a lot of talk of big stimulus and even helicopter-style money drops…But it’s evident that neither the banks nor the government will be stepping in to assist entrepreneurs as their focus is on big corporations. We’re also hearing that VCs are re-negotiating terms and of delays in providing capital.”
At the Helm
The Runway Fund is the brainchild of the cofounders behind OnChain Capital – a blockchain investment firm. The Runway Fund is, however, its own endeavour, and separate from OnChain Capital.
Both Neuner and Hasson are fully enveloped in the world of blockchain and capital generation. This can be seen through their current work at Onchain Capital, and through past works. For example, Neuner is the host of CNBC Africa segment, ‘Crypto Trader’, while Hasson is the previous MD of Techstars.
Broadening Scope
While OnChain Capital maintains a focus on blockchain based endeavours, The Runway Fund is not restricted solely to those within the sector. It is open to start-ups of any kind, providing they meet pre-set requirements
Decrypt reports that within the first hours of The Runway Fund going live, 5 deals were already under discussing – of these, 3 are blockchain focused outfits.
Terms of the Deal
For those interested in potentially making use of the Runway Fund, don’t get TOO excited. There are parameters surrounding eligibility. They are, however, reasonable and expected.
- In operation with fixed run costs
- Previous capital generation round
- Up to date pitch deck
Providing the company is directly affected by COVID-19, and these three boxes are checked, SMEs in need of help may now have access to a new lifeline.
For those that do qualify, The Runway Fund is flexible in how it can help. Perks go beyond financials, with both Neuner and Hasson intending to take on mentorship roles for fund participants.
From a financial standpoint, The Runway Fund can take shape in the following ways, allowing for participants to choose the option best suited for them.
- Equity Funding
- Convertible Loans
Commentary
The duo behind this newly established fund took the time to elaborate on their motives. The following is what they had to say on the matter.
“Having lived through the 2008 financial crisis ourselves, we saw firsthand how it impacted our companies.
Whether you were about to close a funding round, or sign your first revenue deal, we know that COVID-19 has caused unanticipated disruptions and delays that may force you to take some tough decisions and maybe even to shut down.
Our goal is to help you through this tough time and to maximize your chances of survival.”
In Other News
Over the time that COVID-19 has been running through the global population, it has managed to disrupt, both, the economy and development of tech. We recently took a look at a few ways COVID-19 has influenced the blockchain sector as a whole. Make sure to peruse the following article to learn more.
