One thing venture capitalists can offer is money. Y Combinator, the Valley’s most prominent business incubator, said it pulled together more than $30 million from a consortium of investors to put in coronavirus-related startups. (Willett Advisors, the investment arm for the personal and philanthropic assets of Michael Bloomberg, the founder and majority owner of Bloomberg LP, is an investor in Y Combinator startups.)
Early-stage fund 50 Years earmarked $1 million for investments related to Covid-19 in $25,000 uncapped convertible notes, a form of financing many VCs reject because it’s akin to writing a blank check. “We wanted to push companies to go faster,” said co-founder Seth Bannon. “This is a wake-up call, especially in Silicon Valley, where life is pretty good and everyone gets paid a lot, that we’ve lost focus on what matters.”
Some of Bannon’s investments are heeding the call. Helix Nanotechnologies Inc., a startup that was focused on cancer therapeutics, is now trying to develop a Covid-19 vaccine. Chemicals maker Solugen Inc. is mixing hand sanitizer. To encourage lasting habits, there’s an app called Covid Promises that asks people to record the behaviors they pledge to change and will send them reminders after the health crisis subsides.
“When someone works on something truly important, it’s hard to go back to something like ad tech, because squeezing more dollars out of ad clicks suddenly feels empty,” said Bannon. How long will this sense of purpose last? “Maybe 20% of people in Silicon Valley don’t go back to frivolous stuff?”
This article was provided by Bloomberg News.