One quarter of those surveyed believe this is a period of opportunity for tech companies wishing to fundraise.
A further 30% expect the forthcoming period to be very challenging for tech companies looking to raise funds.
Horizon
Partner Robert Dickson said: “The operating environment for businesses has been challenging, but there are many opportunities for tech companies on the horizon.
“As we become more reliant than ever before on technology because of the pandemic, we are seeing tech companies innovating and creating products that provide solutions to real-life problems.
“Investors are attracted by this innovation and creativity.”
Funding transactions during lockdown faced challenges, but these were not insurmountable.
Only 7% had no issues during lockdown while 7% found business extremely challenging.
“This reflects what we have been seeing with our own clients,” said Anne Harkin of MH&C LLP.
Workarounds
“There have been challenges, but generally all parties have been able to find satisfactory workarounds in order to get deals over the line.”
And 44% said their greatest challenge was protracted negotiations over deal terms while 39% faced difficulties completing due diligence.
According to the survey, straight equity investment is the most common form of fundraising for tech businesses (48%), followed by equity/debt hybrid at 39%.
And 12% stated that venture debt is the most common for them, while no one reported using alternative lending.
Extra time
“As we get to grips with the new environment, tech companies continue to raise funds, however, allow for extra time to get the deal done,” said Robert Dickson.
“Funders may also have more of a focus on how a business can scale and grow in the medium to near-term, so tech entrepreneurs will need to demonstrate this effectively.”