This is how hard the pandemic hit founders

The crisis has discouraged people from starting up, and men in particular have shied away. Women, on the other hand, are more crisis-resistant and have adapted their business model. In addition, twice as many start-ups gave up as in 2019.

The Corona pandemic is costing Germany many start-ups: 68,000 fewer people became self-employed in 2020 than in 2019, and the number of full-time start-ups fell by 12 percent to a low point in the surveys. These are the results of the KfW start-up monitor for 2020. The outlook for 2021 is positive: the study assumes that start-ups postponed in 2020 have caught up, and in addition, the forecasts of the economy are positive.

According to the study, there were 537,000 start-ups in 2020. This corresponds to a start-up rate of 104 start-ups per 10,000 people aged 18-64, in contrast to 117 start-ups in 2019. At the same time, the pandemic discouraged men in particular from starting up: 58,000 fewer of them founded a business in 2020, while among women the number fell by only 10,000 start-ups. Moreover, women reacted faster to the crisis: they made changes to their business model due to the Corona pandemic in 52 percent of cases, but only 39 percent of male founders adapted their company. Proportionally, women accounted for 38 percent of the total number of start-ups.

Financially, it was mainly the founders themselves who raised money: 55 percent of the start-ups used their own funds, while external funds from investors were only used in 12 percent of the cases.

Where the pandemic is particularly evident: The number of abortions of startups that were no more than five years old doubled compared to 2019. In 56 percent of the terminations, the pandemic was declared as the reason; here, it was primarily uneconomicalness that was cited.