Entrepreneurial uncertainty during the Covid-19 crisis: Mapping the temporal dynamics of entrepreneurial finance

By Ross Brown, A. Rocha. Journal of Business Venturing Insights, 2020

258 citations recorded by the source corpus.

This paper illustrates how chronic uncertainty caused by crisis events affects the availability of entrepreneurial sources of finance for start-ups and small and medium-sized enterprises (SMEs). To explore this line of argument, this paper examines Crunchbase real-time data examining entrepreneurial finance investments in China during unfolding Covid-19 crisis. The paper shows that these equity investments slumped dramatically in the immediate aftermath of the Covid-19 virus, resulting in a year on year decrease of 60% in the total volume of investment raised between quarter 1 in 2019 and quarter 1 in 2020. Importantly, the paper found early-stage seed investments falling the steepest, suggesting nascent start-ups are those most heavily affected by the crisis. While the global financial crisis heavily hit debt markets, the relational nature of equity investments may mean entrepreneurial finance is even more susceptible to major upheaval caused by the Covid-19 crisis. Overall, enterprise policy makers need to become better attuned at monitoring real-time data sources to mitigate chronic entrepreneurial uncertainty via strategic policy responses.

Subfields: Accounting, Management Information Systems

View Paper: https://www.semanticscholar.org/paper/57409542f118463cdbcc8c8a8ef41d67dd8233d1

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Citations in the corpus

The Effectiveness of Russian Government Policy to Support SMEs in the COVID-19 Pandemic (2020, background): “It is worth noting that, as a whole, so far, scholars have considered and described the anti‐crisis package to support SMEs in different countries, such as tax holidays [25,48,54,57,58]; moratorium on conducting business audits [58,59]; insurance premium reduction and holidays [58,59]; cre”
The coronavirus (COVID-19) pandemic: challenges among Iranian startups (2020, background): “Now, think that investors were taking their steps back and avoiding further investment, the market would ne tricky, and the uncertainty level would remain quite high (Brown and Rocha 2020).”
Corporate Social Responsibility and Organizational Resilience to COVID-19 Crisis: An Empirical Study of Chinese Firms (2020, background): “Since its outbreak in December 2019, the COVID-19 pandemic has hit the global economy with an unprecedented crisis with respect to its cause, scope and severity [1,2].”
Staying alive during an unfolding crisis: How SMEs ward off impending disaster (2020, background): “That said, policy-makers would need to evaluate to what extent such investments should be funded by the government and/or by the firms, while monitoring the availability of entrepreneurial financing following the crisis (Brown and Rocha, 2020).”