The Short-Run Effects of GDPR on Technology Venture Investment

Abstract

The General Data Protection Regulation (GDPR) was enacted in the European Union in April 2016 and went into effect in May 2018. We study its impact on investment in new and emerging technology firms. Our findings indicate negative post-GDPR effects after its 2018 rollout on European ventures, relative to their counterparts in the US and the rest of the world, and considerably lesser effects after its 2016 enactment and before implementation. The negative effects manifest in the number of and amounts raised in financing deals, and are particularly pronounced for newer, data-related, and business-to-consumer ventures.

Keywords: Data, Regulation, GDPR, Investment, Venture Financing

JEL Classification: L13, D8, L5, L15, D43