Small businesses are hurting everywhere and the pain is only going to intensify. What about new businesses? Will anyone start a new company during the COVID-19 crisis and emerging recession?
History says yes: several years ago we did an analysis at the Kauffman Foundation that found that over half the companies on the Fortune 500 list had been founded during a recession or bear market. We updated those numbers a few times and the finding was consistent.
There’s a caveat, of course: with one exception, those prior recessions and bear markets didn’t occur during a pandemic. (There was a recession from August 1918 to March 1919, overlapping with the Spanish flu.) So maybe this time is different.
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