Startups in the COVID-19 Funnel

Abstract

Venture capital (VC) investments are pro-cyclical in nature, making it much more difficult for startups to attract investments during periods of economic recession than during economic growth. To mitigate the negative effects of the coronavirus crisis on the economy, countries are being forced to invest an unprecedented amount of financial resources in the economy, which in turn requires certain priorities. Therefore, in this article, we will look at which startup categories countries should support first during this crisis and what support instruments should be used for this purpose.

Keywords: Startups, COVID-19, venture capital investment, state support

JEL Classification: G24, G28, G32, D81