Quest Ventures partner Jeffrey Seah described the wage relief as a huge lifeline for startups in Singapore. Startups typically raise money for 12 to 30 months’ runway, he explained. Well-run companies might see that runway halved under current conditions, while the more average ones might see it cut to less than six months.
But the well-managed startups can potentially extend their runway by up to 12 months at this moment by cutting costs and finding more capital, while those that are over-valued and facing collection issues will struggle to get additional funding, Seah said.
Saving three-quarters of wages is, therefore, significant.
“It allows startups to conserve cash, not just to keep their staff, but to direct them to capability building work to return stronger-moated to the market when COVID-19 is finally managed,” Seah said. “This is life-saving for all the startups domiciled and staffed in Singapore. It is a deliberate and resolute demonstration of the Singapore government’s determination to preserve the (commercial and) startup hub that is Singapore.”