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Venture Capitalists and COVID-19

Author

Listed:
  • Gompers, Paul
  • Gornall, Will
  • Kaplan, Steven N.
  • Strebulaev, Ilya A.

Abstract

We survey over 1,000 venture capitalists (VCs) on how the COVID-19 pandemic has affected their decisions and investments. Despite the historical importance of in-person meetings, VCs do not report difficulty finding quality entrepreneurs or major changes in time allocation. They do report difficulty in evaluating deals, more investor-friendly terms, and a decreased investment rate, with about one-sixth of VCs reporting pressure from limited partners to conserve capital. Although aggregate returns are largely unchanged, there is high dispersion both within and across funds. A follow-up survey shows faster-than-expected recovery in deal volume, terms, and returns.

Suggested Citation

  • Gompers, Paul & Gornall, Will & Kaplan, Steven N. & Strebulaev, Ilya A., 2021. "Venture Capitalists and COVID-19," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(7), pages 2474-2499, November.
    • Handle: RePEc:cup:jfinqa:v:56:y:2021:i:7:p:2474-2499_7
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    Cited by:

    1. Bellucci, Andrea & Borisov, Alexander & Gucciardi, Gianluca & Zazzaro, Alberto, 2023. "The reallocation effects of COVID-19: Evidence from venture capital investments around the world," Journal of Banking & Finance, Elsevier, vol. 147(C).
    2. Gompers, Paul A. & Kaplan, Steven N. & Mukharlyamov, Vladimir, 2022. "Private equity and Covid-19," Journal of Financial Intermediation, Elsevier, vol. 51(C).
    3. Matteo Aquilina & Giulio Cornelli & Marina Sanchez del Villar, 2024. "Regulation, information asymmetries and the funding of new ventures," BIS Working Papers 1162, Bank for International Settlements.
    4. Andrea Bellucci & Gianluca Gucciardi, 2024. "A Turning Point For Banking: Unraveling The Changing Landscape Of Banking Activity In Europe Since The Covid-19 Pandemic," Journal of Financial Management, Markets and Institutions (JFMMI), World Scientific Publishing Co. Pte. Ltd., vol. 12(02), pages 1-38, December.
    5. Pontus Braunerhjelm, 2022. "Rethinking stabilization policies; Including supply-side measures and entrepreneurial processes," Small Business Economics, Springer, vol. 58(2), pages 963-983, February.
    6. Zuo, Si & Wang, Haijun, 2025. "Optimal venture capital entry–exit strategy with jump–diffusion risk," The North American Journal of Economics and Finance, Elsevier, vol. 76(C).
    7. Ge, Guoqing & Xue, Jian & Zhang, Qian, 2025. "Syndicate partner composition of governmental venture capital firms: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    8. Andrea Bellucci & Alexander Borisov & Gianluca Gucciardi & Alberto Zazzaro, 2024. "The Staying Power of Face-to-face in the Global Venture Capital Market," CSEF Working Papers 721, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    9. Alekseeva, Liudmila & Fontana, Silvia Dalla & Genc, Caroline & Ranjbar, Hedieh Rashidi, 2022. "From in-person to online: the new shape of the VC industry," SocArXiv 3pc4z, Center for Open Science.
    10. Hidenori TAKAHASHI & Yasuhiro YAMAKAWA, 2022. "The Effect of Uncertainty on Entrepreneurial Activity," Discussion papers 22064, Research Institute of Economy, Trade and Industry (RIETI).
    11. Zhao, Jing & Cao, June & Huang, Jingchang, 2023. "CEO/board medical background and stock returns during the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 127(C).
    12. Marek Kacer & Nicholas Wilson & Sana Zouari & Marc Cowling, 2025. "Entrepreneurial finance and the survival of equity-funded firms in crisis periods: the case of COVID-19," Small Business Economics, Springer, vol. 65(2), pages 837-870, August.
    13. Ding, Na & Feng, Panpan & Liu, Jianjun & Ren, Zhaoyue & Zhang, Xueyong, 2025. "Economic policy uncertainty and covenants in venture capital contracts," Journal of Banking & Finance, Elsevier, vol. 181(C).
    14. Pankaj C. Patel, 2025. "Riding the frontier wave: Unveiling the impact of rugged individualism on small business dynamics during COVID-19," Journal of Evolutionary Economics, Springer, vol. 35(1), pages 1-33, January.
    15. repec:osf:socarx:3pc4z_v1 is not listed on IDEAS
    16. Sorgner, Alina, 2023. "COVID-19 and Entrepreneurship," IZA Discussion Papers 16201, IZA Network @ LISER.
    17. Shai Bernstein & Richard R. Townsend & Ting Xu, 2020. "Flight to Safety: How Economic Downturns Affect Talent Flows to Startups," NBER Working Papers 27907, National Bureau of Economic Research, Inc.
    18. Matteo Ambrois & Vincenzo Butticè & Annalisa Croce & Luca Grilli & Elisa Ughetto, 2025. "The times they are a‐changin’: how venture capital firms change their investment practices under the COVID-19 pandemic," Small Business Economics, Springer, vol. 65(2), pages 871-893, August.
    19. Pelucco, Valerio & Vismara, Silvio, 2025. "Where do angels come from?," Journal of Corporate Finance, Elsevier, vol. 94(C).
    20. Peterburgsky, Stanley, 2024. "An industry-level analysis of a pandemic's impact on stock market risk," International Review of Economics & Finance, Elsevier, vol. 95(C).
    21. Alexander Peter Groh & Christina Guenther & Denis Schweizer & Silvio Vismara, 2025. "Entrepreneurial finance in an extended period of crises," Small Business Economics, Springer, vol. 65(2), pages 763-776, August.
    22. Hirschmann, Mirko & Block, Joern H. & Krlev, Gorgi, 2026. "Trademarks and the innovativeness of social enterprises," Research Policy, Elsevier, vol. 55(1).

    More about this item

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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