Work from home amenability and venture capital financing during COVID-19

Srivastava Jagriti () and Balagopal Gopalakrishnan
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Srivastava Jagriti: Indian Institute of Management Kozhikode

No 458, Working papers from Indian Institute of Management Kozhikode

Abstract: This paper examines the impact of COVID-19 on venture capital financing of firms. We find a significant shift in the profile of firms that obtain venture capital financing during the pandemic-induced economic crisis. Firms in industries that are more amenable to work from home obtain greater amounts of financing. Growthstage firms operating in amenable industries are able to obtain higher financing than early-stage firms. The higher financing obtained by firms in amenable industries is driven by venture capital funds focused on the domestic market. Additionally, the higher financing is obtained from a single venture capital investor rather than a consortia of investors. Taken together, the preference of venture capital funds indicate a less risk-averse behaviour in financing firms amenable to remote working. The findings of our study using monthly firm-level data provide insights on venture capital financing during the pandemic.Length: 43 pages

Keywords: COVID-19; Venture capital; financing; work from home (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-cfn and nep-fdg
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