Global startup accelerator Techstars is set to waive specific financial debts and compensate accelerator delays in new commitments during the coronavirus pandemic.
In a statement on Sunday, Techstars announced maturity dates for outstanding convertible notes will be automatically extended to portfolio companies, so that none come due for the next 12 months. Currently, Techstars has approximately 1,000 convertible note investments outstanding.
Further, Techstars committed to funding $20,000 upfront if the startup accelerator delays any program in 2020 due to the crisis.
“While these commitments won’t solve all the challenges we face together and individually in this turbulent time, we hope that they can offer some comfort and relief” — Techstars
The announcement comes as startups worry about the rising economic uncertainty that comes with a pandemic. The United Nations (UN) has warned that the outbreak could cost the global economy $1 trillion this year alone, and tech leaders from top firms including Sequoia Capital and Founder Institute are providing advice to startup founders about bracing ourselves for turbulence.
“With so much uncertainty facing all of us, it’s important to consider all the ways in which we can help each other. Networking, resources, and moral support are critical elements, but so is financial support,” Techstars said in the statement.
“While these commitments won’t solve all the challenges we face together and individually in this turbulent time, we hope that they can offer some comfort and relief. We will continue to do everything we can to support our network and the startup community. The world needs your innovations and solutions more than ever.”
Importantly, Techstars accelerator investment terms will not change. Techstars commits to not adversely alter its investment terms for any of its more than 50 accelerators globally for the remainder of 2020. “Our accelerator deal remains the same as it was before the crisis,” the statement said.
The Bill & Melinda Gates Foundation, Mastercard and Wellcome are also trying to make funding more accessible to companies working on treatment options.
The three organizations recently announced the launch of the COVID-19 Therapeutics Accelerator backed by $125 million in seed funding.
Meanwhile, the European Commission has urged startups and small companies with technologies and innovations that could help in “treating, testing, and monitoring” the coronavirus outbreak to apply for fast-track funding.
The bloc’s call for applications is part of its multimillion-euro European Innovation Council Accelerator program.
Disclaimer: This article includes a client of an ESPACIO portfolio company.
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