Venture capital investments under financing constraints: evidence from the 2020 pandemic crisis

Abstract

This paper employs the 2020pandemiccrisis as an empirical setting to analyze how venture capitalists investments react under financing constraints. In particular, this paper examines how the amount per round received by a start up from venture capital funds is affected by the COVID-19 outbreak and if there are particular sectors that are benefitting from the situation. The empirical findings show that in 2020 the average amount per round raised is higher than it was in the past years and that VCs have preferred to invest more money for younger new ventures belonging to Information Technology and Medical/Health/Life Science sectors.