Venture Capital and the Financial Crisis: An Empirical Study Across Industries and Countries

D. Cumming (ed.), The Oxford Handbook of Venture Capital, Oxford University Press, pp. 37-61

30 Pages Posted: 26 Jan 2010 Last revised: 28 Jun 2015

See all articles by Jorn H. Block

Jorn H. Block

University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)

Geertjan de Vries

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Tinbergen Institute

Philipp G. Sandner

Frankfurt School of Finance & Management

Date Written: January 24, 2010

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.

Keywords: Venture capital, financial crisis, innovation finance, entrepreneurial finance, recession

JEL Classification: L26, G24, O30

Suggested Citation

Block, Jorn Hendrich and de Vries, Geertjan and Sandner, Philipp, Venture Capital and the Financial Crisis: An Empirical Study Across Industries and Countries (January 24, 2010). D. Cumming (ed.), The Oxford Handbook of Venture Capital, Oxford University Press, pp. 37-61. Available at SSRN: https://ssrn.com/abstract=1541602

Jorn Hendrich Block (Contact Author)

University of Trier - Faculty of Management ( email )

D-54296
Germany

Erasmus University Rotterdam (EUR) - Institute of Management (ERIM) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Geertjan De Vries

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Tinbergen Institute ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Philipp Sandner

Frankfurt School of Finance & Management ( email )

Sonnemannstraße 9-11
Frankfurt am Main, 60314
Germany

HOME PAGE: http://www.philipp-sandner.de

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