Financing entrepreneurship in times of crisis : exploring the impact of Covid-19 on the market for entrepreneurial finance in the UK
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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.
Brown , R , Rocha , A & Cowling , M 2020 , ' Financing entrepreneurship in times of crisis : exploring the impact of Covid-19 on the market for entrepreneurial finance in the UK ' , International Small Business Journal , vol. 38 , no. 5 , pp. 380-390 . https://doi.org/10.1177/0266242620937464
International Small Business Journal
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