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

This article analyzes the effect of the 2007-2009 financial crisis on the venture capital market. It shows 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 United States than in other countries. The article suggests that the crisis has led to a severe "funding gap" in the financing of technological development and innovation.

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