Financing entrepreneurship in times of crisis: exploring the impact of Covid-19 on the market for entrepreneurial finance in the UK

Ross Brown, Augusto Rocha, Marc Cowling

Research output: Contribution to journalArticlepeer-review

34 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)380-390
Number of pages10
JournalInternational Small Business Journal
Volume38
Issue number5
Early online date6 Jul 2020
DOIs
Publication statusPublished - 1 Aug 2020

Keywords

  • Entrepreneurship
  • Covid-19 crisis
  • Entrepreneurial finance
  • Seed finance

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