COVID-19 quickly put the stock exchange in the ICU, with indications of unprecedented volatility and decreases. Nevertheless, the market’s resilience and speedy action by the Fed made this down spiral short-term. The Russell 2000 Index, a benchmark for small-cap stocks, is one of numerous indices that highlights this.
Within a one-month period from late February into March, The Russell 2000 Index was down more than 40%, signaling completion of a long bull market and entryway into bear territory. Two months later, at the end of May, the Index is up over 35% from its low. In the private market, the impact of volatility on healthy, pre-COVID-19 software company assessments is much easier to track. As SaaS creators consider their financing alternatives, the picture might be a bit less glum than they may envision.
Still going strong
Modifications to personal market appraisals frequently lag behind what transpires in the public markets. Fundraising cycles for private business usually take 2-3 months from start to close. Unlike the 2000 dot-com crash and the 2008 Great Recession, where assessments dropped for extended amount of times, personal company assessments, for the most part, have not had time to adjust for the volatility seen in the general public markets.
If thinking about a capital raise in the current environment, Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.