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Coronavirus is extra tough on entrepreneurs

The global Corona pandemic threatens a large number of Nordic start-ups and entrepreneurs and their very existence. A new survey from Danske Bank shows exactly how the start-up environment feels exposed.

In addition to declining sales, the global economic downturn triggered by the spread of the virus means that companies in the start-up and growth phase are facing difficulties obtaining the necessary funding to escalate continued growth.

Via the Hub- the largest start-up portal in the Nordic region, facilitating recruitment of employees and investors - Danske Bank has investigated how the start-up environment feels exposed during the Corona crisis. The answers show that the biggest and most pressing concern is declining sales in general, which trigger a lower revenue. In addition, business owners are particularly concerned about the current and future funding opportunities and the risk of them as founders having to staff down among their employees.

“For many start-ups, this is the first time they are facing a financial crisis and therefore their experience to draw on here is zero. In addition, many do not operate assisted by professional specialist, which is why all decisions must be taken by the founders themselves", says Klavs Hjort, Head of Growth & Impact, Danske Bank and continues: 

"In many cases, their financial situation is already fragile, so liquidity shifts – even though for just a few months - can be very critical. Finally, the opportunity to raise venture capital may be limited during an economic crisis, with investors focusing primarily on their existing investments.” 

Image: Klavs Hjorth, Head of Growth & Impact, Danske Bank

The study from TheHub also shows that more than every third start-up is forecasting the need to reduce staffing during 2020 as a direct consequence of the Corona crisis.

“We need to make sure that the crisis in relation to COVID-19 does not remove the basis of existence for these companies, meant to secure growth and jobs in our society both now and in the future. In Danske Bank, we want to be visible and active both by helping - financially and through counselling - during the crisis and after the crisis, so that growth for these companies can be restored as quickly as possible," says Klavs Hjorth.

Facts about the survey

  • The survey has been running since March 18 via The Hub and is still running.
  • The purpose is to get the start-ups themselves out into words how the Corona crisis is actually affecting their business.
  • The article is based on responses from 468 participating start-ups in four countries: Denmark, Norway, Finland and Northern Ireland.