Financing entrepreneurship in times of crisis: Exploring the impact of COVID-19
on the market for entrepreneurial finance in the United Kingdom
#MMPMID38602995
Brown R
; Rocha A
; Cowling M
Int Small Bus J
2020[Aug]; 38
(5
): 380-390
PMID38602995
show ga
This commentary explores the manner in which the current COVID-19 crisis is
affecting key sources of entrepreneurial finance in the United Kingdom. We posit
that the unique relational nature of entrepreneurial finance may make it highly
susceptible to such a shock owing to the need for face-to-face interaction
between investors and entrepreneurs. The article explores this conjecture by
scrutinising a real-time data source of equity investments. Our findings suggest
that the volume of new equity transactions in the United Kingdom has declined
markedly since the outbreak of the COVID-19 pandemic. It appears that seed
finance is the main type of entrepreneurial finance most acutely affected by the
crisis, which typically goes to the most nascent entrepreneurial start-ups facing
the greatest obstacles obtaining finance. Policy makers can utilise these
real-time data sources to help inform their strategic policy interventions to
assist the firms most affected by crisis events.
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