Start-ups have emerged in the last years as key drivers of economic growth and job creation. Their businesses are based on technology and innovation and they play a key role in the economy.
The COVID-19 crisis hit everywhere. As opposed to big companies that have more resources to hold their financial balance, Start-ups are more vulnerable. The lack of financial support could put their survival in danger, which affects a large number of people.
They have a significant role in the economy not only because they employ lots of young people, but also because they develop new technologies and innovative products or services. This is one of the reasons why Starts-up should receive some support through special policies. The crisis is reducing the creation of new firms, challenging the current ones' survival and limiting their growth.
Start-ups have shown that they can quickly adapt their business to the current situation. They've brought big innovations to many fields: telemedicine, remote personal care, medical equipment, home delivery, food processing, teleworking, and online education.
If Start-ups get the right stimulus, they can show their best skills and play a significant role in the community. Sometimes, a crisis helps to sharpen creativity. In fact, many successful businesses emerged as Start-ups during a crisis, like Dropbox, Uber, Airbnb, WhatsApp, Groupon, and Pinterest, all founded during or just after the global financial crisis.
In order to give them opportunities for growth, there should be some policy intervention. In the short-term, there should be financial help with minimal bureaucracy, and promotion in investments in skills and online training. During the crisis, it'll help to keep current employers updated, and encourage the upskilling of start-up workers.
Policymakers should also take into consideration the short-term liquidity and the availability of funding. Available fundings are key for innovative start-ups at all stages of their development. The government could provide additional public funds to public venture capital umbrella-fund-investors, which can be used in co-investment with private investors for financing start-ups.
Finally, entrepreneurs should receive the right incentives in the easiest way. It's never comfortable to face red tape, but during the crisis, it's much worse. Administrative burdens and complex procedures discourage any initiative, and Start-ups already face enough significant challenges during COVID-19.