More like, the startups that are saved will be a mixed bag of worthwhile startups and dead-end startups. Meanwhile some worthwhile ones will sadly be left behind with the dead-end ones.
If the business is profitable, it will survive.
If its still relying on free money to pay the bills, its time to make it profitable.
The most bestest startup in the world would still be relying on investor's money to pay the bills if it's just starting to build its product and the time to make it profitable will come in a year or two or more (e.g. a biotech startup can take many, many years until the product gets approved for patients and earns its first cent).
Yes, if a business has "grown up" from being a startup and is fully self-funding not only its operations but also its growth, then it will survive, but the definition of a startup is something that's still trying to reach that stage and isn't there yet.
For the past 10 years or so none of the "successful wrothwhile startups" have positive cash flows, and those that seemingly do still manage to post hundreds of millions of dollars in losses yera after year after year.
The whole modern startup business is either "work at a loss until a successful exit for the founders" or "work at a loss forever with no expectation of profitability for some reason".
None of them are worthy.
A start-up that fails because of this mismanaged their treasury, didn’t pull money in time, couldn’t borrow against their claims and couldn’t convince anyone to advance payroll. That’s reflective on leadership. It’s a teachable moment. But it points to deeper naivety.
Aside from that timing is always a thing. There's certainly a company out there that is 8 months away from proving the soundness of their idea that now only has six months of funding, or whatever.
The idea that in every case, "the market" or whatever will arrive at the most perfectly correct conclusion is silly at any time, but particularly in one of uncertainty and upheaval.
Indeed, I think there's good reason to expect it to be more just given that what we're talking about is mostly a short-term cash crunch that's easily explained. E.g., one company is raising $1 bn for bridge loans: https://techcrunch.com/2023/03/11/brex-ceo-is-trying-to-rais...
That kind of support is not something marginal startups have access to in normal times.
Running a startup means time is never on your side. If you are still 8 months away from proving "soundness" of your idea then you are already too late.
Is it? I thought it was that startups with exciting books and good networks get a chance to ratchet into the next round of funding.
Great startups drown all the time for not being a VC rocketship, when they they could have grow into a perfectly successful cruiseliner under traditional fundraising or bootstrapping.
If investors are “nah pass”, it’s more about making a quick decision about near-term finance opportunities than the mid-term or long-term strength of the underlying business. VC investors inherently care more about 10x exits than sound business practices.