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Venture capital and the financial crisis: an empirical study across industries and countries

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  • Block, Joern
  • Sandner, Philipp
  • De Vries, Geertjan

Abstract

This study analyzes the effect of the 2008 financial crisis on the venture capital market. We show that the crisis is associated with a decrease in the number of initial funding rounds as well as with a decrease in the amount of funds raised in later funding rounds. The effects of the crisis differed across industries and were stronger in the US than in other countries. We suggest that the crisis has led to a severe ‘funding gap’ in the financing of technological development and innovation

Suggested Citation

  • Block, Joern & Sandner, Philipp & De Vries, Geertjan, 2010. "Venture capital and the financial crisis: an empirical study across industries and countries," MPRA Paper 20287, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20287
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    References listed on IDEAS

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    Cited by:

    1. Michaelides Marios & Davis Scott, 2020. "From unemployment to self-employment: The role of entrepreneurship training," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-35, March.
    2. Alperovych, Yan & Groh, Alexander & Quas, Anita, 2020. "Bridging the equity gap for young innovative companies: The design of effective government venture capital fund programs," Research Policy, Elsevier, vol. 49(10).
    3. Suret, Jean-Marc, 2010. "Le financement des entreprises en démarrage et en croissance : le point de la situation," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(3), pages 385-411, septembre.
    4. Blaseg, Daniel & Koetter, Michael, 2015. "Friend or Foe? Crowdfunding Versus Credit when Banks are Stressed," IWH Discussion Papers 8/2015, Halle Institute for Economic Research (IWH).
    5. Richard T. Harrison & Rob Baldock, 2015. "Financing SME growth in the UK: meeting the challenges after the global financial crisis," Venture Capital, Taylor & Francis Journals, vol. 17(1-2), pages 1-6, April.

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    More about this item

    Keywords

    Venture capital; financial crisis; innovation finance; entrepreneurial finance; recession;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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