Report on the survey of EU start-ups and the COVID-19 pandemic.
Date: 2023-03-09
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs
Subjects: aid to undertakings, coronavirus disease, economic survey, public financing, report, start-up

          
 
                                                   
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Internal market, Industry, Entrepreneurship and SMEs 
Directorate A – Strategy and Economic Analysis 
Unit A.2 – SMEs 
E-mail: GROW-SPR@ec.europa.eu 
European Commission 
B-1049 Brussels 

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Report on the survey of EU start-ups and  
the COVID-19 pandemic 

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LEGAL NOTICE 

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 Table of Contents 

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Introduction 

This  report  describes  the  results  of  the  work  performed  by  the  European  Startup  Network 
(ESN)  in  the  framework  of  the  contract  GRO/SME/22/13030,  awarded  by  the  European 
Commission (EC) for a study to gather information about how the situation of start-ups has 
been evolving following the COVID-19 pandemic. 

The  study  is  composed  of  four  sections.  Section  1  summarizes  studies  conducted  by  ESN 
members to assess the impact of the COVID-19 pandemic on start-ups across the EU. Section 
2 covers the profile of the start-ups that responded to the survey. Section 3 gives an overview 
of the findings from the survey linked to pandemic relief support. Section 4 covers the open 
questions that were posed to the respondents, asking them to elaborate their view on public 
support during crises, the lessons learnt, the current global situation and the challenges their 
start-ups face. 

Executive summary 

The study provides a varied picture in terms of the impact that the COVID-19 pandemic had 
on  EU  start-ups  and  also  provides  some  insights  concerning  the  public  support  during  the 
pandemic as well as the challenges that start-ups face.  

Some interesting outcomes of the study, based on the replies of those who responded to the 
online survey, are:  

•  The  two  biggest  problems  faced  by  the  start-ups  are  “Access  to  finance”  and 
“Regulatory  obstacles  or  administrative  burden”,  pointed  to  by  68%  and  52%  of 
respondents respectively; 

•  A  slight  majority  of  respondents  (54%)  reported  that  their  business  experienced  a 
negative development during the COVID-19 pandemic, while about a quarter of them 
(24%) experienced a positive development and about a fifth of them (19%) said they 
were unaffected by the pandemic; 

•  Among  the  start-ups  who  received  pandemic-related  public  support,  the  two  most 
prominent kinds of support received were “Additional credit lines” (43%) and “Salary 
subsidies for employees” (36%), which markedly outdistance the third most frequent 
kind of support “Compensation payments for foregone business revenue” (18%); 

•  Some  respondents  (15%)  received  public  support  from  public  authorities 

automatically, i.e. without requesting it;  

•  Nearly half of respondents (43%) reported their start-up did not request any public 
support, with – among these –  the most prominent reasons being that the start-up “Did 

6 

 
 
 
 
 
 
 
not need any public support” (30%) and that “Public support measures on offer were 
not useful” (27%), or “The application process was too bureaucratic” (17%), while 
3% of these start-ups did not request public support because they received automatic 
support from public authorities and deemed it to be sufficient;  

•  Of the start-ups that requested public support, 28% did not obtain it. As for the reasons 
for not obtaining the support, the leading cause was “Did not fulfil the conditions” 
(44%).  About  one  third  (36%)  of  respondents  mentioned  “Other”  reasons,  which 
include, for example, the applicant not being a local citizen and the start-up having 
employees residing outside the country in which the support was requested; 

•  Nearly half (48%) of respondents claimed to be either satisfied or very satisfied with 
the  COVID-19  support  they  received,  while  a  quarter  of  them  (25%)  were  either 
disappointed or very disappointed and 24% remained neutral on this, i.e. they were 
neither satisfied nor disappointed;  

•  Among  those  disappointed  with  the  public  support  received,  the  most  mentioned 
reasons  for  disappointment  included  explanations  that  “The  measures  were  not 
appropriate for our business, thus the support did not address the main challenges we 
faced” (45%) and “The process was too bureaucratic” (24%), which were followed by 
“The process was too lengthy and therefore the support did not reach us at the right 
time” (22%); 

•  The start-up respondents were more likely to obtain public support if they had a higher 

number of employees and/or if they were rather older than younger; 

•  The majority of respondents (66%) reported the overall strength and performance of 
their  regional  business  environment  to  be  good,  while  the  dimensions  of  business 
environment  deemed  to  be  poor  are  “Access  to  private  and  public  finance”  (58%), 
“Availability  of  support  to  help  enterprises  become  more  sustainable”  (52%)  and 
“Legal and administrative environment” (51%);  

•  The start-up respondents also pointed out that the public support during crises needs 
to be provided fast, as time really matters, and the lessons learnt need to be used in 
other crisis, such as related to the Russian war or aggression against Ukraine, which 
also affected start-ups to various degrees, as quite some of them prospered during the 
last couple of years while quite some others have struggled to survive. 

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1.  Summary of the studies conducted by ESN members to assess the 
impact of the COVID-19 pandemic on start-ups across the EU 

In  most  EU  countries  today,  start-ups  are  significant  drivers  of  economic  growth  and  job 
creation. According to the research conducted by Dealroom and Sifted and supported by the 
EC, European start-ups have provided millions of jobs and have become a leading job growth 
engine1. Additionally, start-ups frequently act as a catalyst for ground-breaking innovation 
and sustainable economic growth. However, the COVID-19 pandemic has severely tested the 
adaptability of the entire European start-up ecosystem. The tremendous disruption brought on 
by the pandemic significantly decreased the revenue of many start-ups while putting venture 
capital investors on edge. Start-ups often experienced cash flow problems, which forced them 
to pause hiring activities and apply for support, such as for government-backed loans.  

COVID-19  also  created  a  new  context  for  start-ups:  it  somehow  split  the  businesses  into 
“winners”  and  “losers”,  based  on  the  availability  of  their  goods  or  services  during  the 
pandemic restrictions and lockdowns. For instance, start-ups from travel, mobility, and real 
estate  industries  were  negatively  affected  during  the  COVID-19  pandemic,  while 
telemedicine, collaboration and streaming services prospered.  

Start-ups  that  ultimately  emerged  as  “winners”  responded  to  the  pandemic  quickly  and 
flexibly and have supported the transition to fully digital work, education, and health services. 
A  few  examples2  include  introducing  “no-contact”  food  delivery,  launching  a  variety  of 
digital  health  services,  such  as  COVID-19  trackers,  remote  patient  monitoring  and  remote 
consultations  tools,  and  offering  remote  working  tools,  as  well  as  online  learning  and 
entertainment platforms, in some cases for free.  

Before being impacted by the crisis, the European start-up ecosystem was going through a 
positive evolution, as evidenced by the breakthrough of 2019, when European start-ups raised 
€38.8  billion  in  venture  capital,  up  42.6%  from  €27.2  billion  in  2018,  according  to 
DIGITALEUROPE’s  study3.  Therefore,  with  digital  adoption  accelerating,  the  ecosystem 
being well-capitalised, and government institutions in place to offer help when necessary, the 
European start-up ecosystem went into the crisis in a good shape - and  numerous national 
start-up ecosystems are a great example of managing the crisis successfully - Austria, Estonia 
and France are among them.  

According  to  the  study  conducted  by  the  Austrian  Startups4,  the  majority  of  start-ups  in 
Austria  initially  experienced  negative  effects  from  COVID-19  in  terms  of  turnover  and 
growth.  Most  businesses  saw  a  decline  in  their  turnover  compared  to  what  they  had 

1 https://europeanstartups.co/uploaded/2020/06/European-Startups-Launch-Report.pdf  
2 https://sifted.eu/articles/startup-initiatives-coronavirus/  
3 https://www.digitaleurope.org/events/european-start-ups-in-the-aftermath-of-covid-19-2/  
4 https://austrianstartups.com/think-tank/startup-monitor/  

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anticipated; about 29% of start-ups reported sales losses of 50% or more. Austrian start-ups 
faced problems such as worsened access to finance and issues with intermediate inputs from 
non-EU suppliers. At the start of the crisis, it was expected that most start-ups would also 
have to either cut their staff or freeze hiring. The report from 2021, however, reveals that 
despite the COVID-19 pandemic, eight out of ten Austrian start-ups intended to increase their 
staff  over  the  course  of  the  following  year,  which  would  result  in  the  creation  of  roughly 
10,000 new jobs. The Austrian public authorities put in place several support programs. In 
2021, the Investitionsprämie (a support to investments) was accessed by 27% of the start-ups 
that took part to the study, while the Fixkostenzuschuss (a subsidy covering fixed costs) was 
accessed by 16% of them and 38% of the respondents stated that the support on offer was 
unsuitable for them. 

Estonian start-ups have done reasonably well during the pandemic, as reported by start-up 
Estonia, with 36% of them having seized the opportunity to grow their business during the 
crisis5,6. However, most of them still faced challenges such as the need to proceed with cutting 
costs (65%), decreasing salaries (34%), and laying people off (19%). Moreover, 40% of start-
ups  had  difficulties  with  funding  as  a  result  of  investors  cancelling  transactions  and 
fundraising plans. Nevertheless, even though it has been difficult to match pre-crisis growth 
rates,  Estonian  start-ups  have  generally  done  very  well  in  adjusting  to  the  pandemic.  The 
report of 2022 shows that the turnover of start-ups is marked by a robust 68% increase since 
mid-2021. Additionally, investments in Estonian start-ups have surpassed the benchmark of 
1 billion euros, and these companies employ close to 10,000 people. 

In France7,8, despite the pandemic, 2020 was a record year for digital start-ups. According to 
EY’s annual barometer, mentioned by France Digitale, on the social and economic success of 
French digital start-ups, in 2020, they recorded nearly 7 billion euros in revenue. The report 
also  revealed  that,  compared  to  2019,  French  start-ups’  global  revenue  increased  by  15%. 
Concerning challenges, just over a third of entrepreneurs said that the pandemic had no impact 
on their financing. However, the survey revealed that 21% of the start-ups claimed they were 
expected to take out a loan within the next 12 months and 29% were “probably considering 
it”. According to the survey, despite the COVID-19 crisis, a majority of start-ups expected 
revenue growth between 26% and 50% in 2022. 

In the Netherlands, funding became critical during the pandemic, as highlighted by 47% of 
respondents to Techleap’s survey9,10,11. In 2020, 30% of Dutch start-ups had funding delayed 
or cancelled, showing that these high-potential companies were seen by investors as ‘at risk 

5 https://startupestonia.ee/blog/recap-of-the-third-quarter-of-the-estonian-startup-sector-growth-through-crisis  
6 https://startupestonia.ee/blog/impact-of-covid-19-to-estonian-startups-a-survey  
7 https://francedigitale.org/combat/covidtechtrends2020/  
8 https://www.euronews.com/next/2021/09/23/record-year-for-french-start-ups-despite-covid-but-but-not-enough-
women-at-the-top  
9 https://www.techleap.nl/reports/the-dutch-tech-ecosystem-and-covid-19-impact-report  
10 https://www.techleap.nl/reports/col-final-data-report-november-2021  
11 https://www.techleap.nl/reports/col-impact-survey-report-june-2021  

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of not reaching potential’ due to COVID-19. Other challenges that Dutch start-ups had to face 
were intensive cost cutting, reduction in capacity and logistical issues. All the issues slowed 
down  milestone  delivery  for  16%  of  companies.  Regarding  government  support,  most 
respondents pointed out that bridge loan funding and structural funding and liquidity were 
two kinds of support measures they needed the most. Every third start-up did not use any 
support options provided by the government. 

Another example is Germany. About 72% of German start-ups in 2020 and 51.2% in 2021 
responded that the pandemic had harmed them economically, even though it had contributed 
to improve the work environment12. The main problems for German start-ups were customer 
acquisition (65.3%), product development (47.6%) and capital raising (36.1%). Regardless of 
the fact that capital procurement continues to be an important obstacle, this problem is getting 
less problematic each year. In contrast, it is now reported to be harder to find employees than 
in 2021, with an increase from 17.0% to 26.6% in the percentage of respondents claiming this 
to be a problem. In 2021, 23.8% of German start-ups responded that they felt no impact of 
COVID-19 and 25.0% reported a positive development in business activity – almost twice as 
many as in the previous year. 

The  COVID-19  pandemic  has  also  affected  the  regions  outside  the  EU.  According  to  the 
Peterson Institute for International Economics13, despite a health catastrophe and one of the 
worst economic downturns in modern history, the number of start-ups grew in the United 
States (US) – from 3.5 million in 2019 to 4.4 million in 2020, a 24% increase. This is the 
largest  increase  of  any  country  in  the  Organization  for  Economic  Cooperation  and 
Development  (OECD)  or 
in 
entrepreneurship were also recorded in Turkey (23%), Chile (14%) and the United Kingdom 
(9%).  Other  economies  were  not  so  vibrant,  for  example  with  new  business  formation 
declining by a quarter in Russia. Also, start-up activity in China barely budged during the 
first year of the pandemic, growing by 3% in the first three quarters of 2020 relative to 2019. 

the  G20  with  available  data.  Significant 

increases 

There are three hypotheses that have been suggested to explain the unequal growth of new 
businesses in the early stages of the pandemic-related economic recovery.  

The first one is changing customer preferences during COVID-19 that created opportunities 
for some entrepreneurs. In the United Kingdom for example, 20% of new businesses created 
in the third quarter of 2020 were in retail. The growth in new retail businesses could reflect 
the increase in online shopping during COVID-19, when internet sales as a share of all retail 
in the United Kingdom jumped from 19% prior to the pandemic to 33% in May 2020. Besides 
retail,  industries  that  are  adaptable  to  remote  work,  such  as  back-office  services,  also 
represented a larger share of business formation in the United Kingdom in 2020 than before. 

12 https://deutscherstartupmonitor.de/  
13 https://www.piie.com/blogs/realtime-economic-issues-watch/startups-boom-united-states-during-covid-19  

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The  second  hypothesis  is  that  economies  with  the  simplest  administrative  processes  for 
starting a business have the highest growth in terms of creating new companies. Businesses 
have  been  more  likely  to  emerge  and  even  prosper  during  the  pandemic  in  countries  with 
easier business registration procedures and lower administrative and regulatory burdens. 

Finally, entrepreneurship out of necessity is a third explanation for why business formation 
increased  in  several  economies  during  the  pandemic.  According  to  Fairlie14,  higher  local 
unemployment rates signalled an upcoming boost in the US entrepreneurship during previous 
downturns.  It  is  possible  that  the  shrinking  of  opportunities  in  the  job  market  encouraged 
entrepreneurship out of need. 

Anyway,  we  may  conclude  this  general  overview  by  acknowledging  that  the  COVID-19 
pandemic  had  quite  varied  impacts  on  start-ups  across  the  globe,  as  quite  some  of  them 
prospered during this period while quite some others struggled to survive. 

14 Fairlie, R. W. 2013. Entrepreneurship, Economic Conditions, and the Great Recession. Journal of Economics & 
Management Strategy 22 (2): 207-231. 

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2.  Survey and start-up profiles 

2.1 Survey approach 

The data were collected through an online survey (using the EU Survey tool) aimed at any 
start-ups in the EU, hence those recently established and up to those that are already scaling-
up. The survey opened in mid-July 2022 and the last entries were accepted in early December 
2022.  The  survey  collected  350  responses  from  27  countries  (the  EU27  Member  States). 
Certain limitations to the study must be taken into account when drawing conclusions from 
the findings. For example, this study did not have the ambition to have a full coverage of all 
the startups in Europe, which, needless to say, outsize the sample by at least one order of 
magnitude. The start-ups that participated in this study are presented in more detail in the next 
section  of  this  report;  they  are  up  to  10  years  old,  their  headcount  does  not  exceed  250 
employees and they are concentrated in some countries while mostly operating in the digital 
industrial ecosystem.                                                                                             

2.2 Profile of the start-up respondents to the survey 

As shown in Figure 1, around half of the surveyed start-ups are up to 4 years old and mostly 
located in Spain (24%), Belgium (15%) and Italy (11%).  

Figure 1: Frequency distribution of the year of foundation and most frequent locations  

Year of foundation 

Geographical location   
(top 10 countries)  

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

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Figure  2  on  the  industrial  ecosystems  (with  multiple  replies  possible,  as  some  start-ups 
operate  in  more  than  one  ecosystem)  shows  that  the  industrial  ecosystem  by  far  the  most 
represented in the survey is the “Digital” ecosystem (46%). This is followed by Other” (18%), 
chosen  by  respondents  who  claimed  their  start-up  does  not  pertain  to  any  of  the  14  EU 
industrial ecosystems, and “Health” (16%). As concerns “Other”, this category includes a mix 
of sectors/areas stated by some of the start-ups concerned, and the three most mentioned are 
“Consultancy” (2.3%), “Finance” (2.3%) and “Biotech” (1.1%). 

Figure 2: Share of start-ups per industrial ecosystem and list of “Other” 

Industrial ecosystems 

Distribution of 
sectors/areas in “Other” 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

Nearly half of the respondents report that their start-up is not a member of any industry cluster 
or another SME business support organisation in the region (see Figure 3). 

Figure 3: Share of start-ups being a member of an industry cluster or another SME business 
support organisation in the region 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

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Figure 4 shows that founding a start-up is mostly a cooperative endeavour: only around 18% 
of the respondents reported that their start-up was founded by a single founder, with most of 
the start-ups founded by a group of two to four people. However, more than half of the start-
ups do not have any female founders. 

Figure 4: Frequency distribution of the total number of founders and of the number of 
female founders 

Share of start-ups per number of founders 

Share of start-ups per number of female 
founders 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

A large majority of respondents reported their start-up to be of a very small size in terms of 
headcount (see Figure 5), with the highest share (16%) reporting their start-up does not have 
any employee, and with a combined share of around 60% of respondents reporting their start-
up has between one and ten employees. Furthermore, 30% of the start-ups report not to have 
any female employees.  

Figure 5: Frequency distribution of the number of employees and female employees 

Share of start-ups per number of employees 

Share of start-ups per number of female 
employee 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

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The  majority  of  respondents  (66%)  reported  the  overall  strength  and  performance  of  their 
regional business environment to be either “Fairly good” (50%) or “Very good” (16%) (see 
Figure 6). As concerns the specific dimensions of the business environment that they were 
asked to rate, most of the dimensions showed the most frequent rating to be “Fairly good”, 
with “Infrastructure for businesses” showing a large majority of respondents who rated this 
dimension either “Fairly good” (44%) or “Very good” (38%). The only two dimensions whose 
most frequent rating is “Fairly poor” are “Availability of support to help enterprises become 
more sustainable” and “Access to private and public finance”.   

Figure 6: Rating of the business environment  

Overall strength and performance of your 
regional business environment 

Quality of support services for businesses provided by 
private and public actors 

Legal and administrative environment 

Availability of support to help enterprises become more 
sustainable 

Availability of staff with the right skills, 
including managerial skills 

Infrastructure for businesses (available office space, 
internet connectivity, etc.) 

Access to private and public finance 

Access to and collaboration with business partners.15 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

15 Such partners include other enterprises, public sector, educational institutions, research organisations, etc. 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As  concerns  the  growth  plans,  most  of  the  respondents  seem  optimistic  about  the  future, 
claiming their start-up plans to grow and/or has a growth plan, even though the specificity of 
these  plans  varies  across  respondents  (see  Figure  7,  multiple  replies  were  possible).  For 
instance, not surprisingly, a smaller share of respondents reports to be planning to grow in 
non-EU countries (41%) than in the country in which the start-up is currently located (45%) 
or in other EU countries (61%). Only 2% of the start-ups in this survey said that they did not 
plan to grow. 

Figure 7: Growth plans 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

Finally, with respect to the biggest problems the start-ups are facing, the two most prominent 
ones  are  by  far  “Access  to  finance”  (68%)  and  “Regulatory  obstacles  or  administrative 
burden” (52%) (see Figure 8, whereas up to three options were possible to be selected). In the 
category  “Other”,  various  issues  such  as  concerning  marketing  and  sales,  the  lack  of 
appropriate support by public authorities and frictions in the supply chain were mentioned. 

Figure 8: The biggest problems faced by start-ups 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

16 

 
 
 
 
 
 
 
 
 
3.  Findings from the survey linked to pandemic relief support 

As  shown  in  Figure  9,  the  impact  of  the  pandemic  varied  a  lot  across  start-ups.  A  slight 
majority  of  respondents  (54%)  reported  that  their  business  experienced  a  negative 
development (to different degrees) and ascribed this to several different reasons, with - among 
these  -  “Change  in  customers’  behaviour”  being  the  most  prominent  (26%),  followed  by 
“Lack of access to capital” (17%) and “Forced closure of operations” (16%). Around a quarter 
(24%) of the respondents reported either a positive or a very positive development of their 
business  during  the  pandemic,  with  -  among  these  -  the  most  prominent  reasons  being 
“Increased demand” (29%), “Increased digitalisation” (21%) and their “Adjustment to market 
needs” (21%). About one fifth (19%) said they were largely unaffected by the pandemic and 
able to achieve their objectives. 

Figure 9: Start-ups' development during the COVID-19 pandemic16 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

Overall, 15% of the start-up respondents received automatically (i.e. without requesting it) 
some public support from public authorities (see Figure 10).  

Figure 10: Frequency of respondents having received automatic public COVID-19 support, 
without requesting it 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

16 The percentages reported in the bar graphs refer to the frequency of that reply over the total of replies for that 
question, and the respondents could choose more than one reply. 

17 

 
 
 
 
 
 
 
 
 
 
 
 
 
With  respect  to  the  requests  for  public  support  during  the  pandemic,  43%  of  respondents 
reported their start-up did not request any public support, with – among these –  the most 
prominent reasons being that the start-up “Did not need any public support” (30%) and that 
“Public support measures on offer were not useful” (27%), or “The application process was 
too bureaucratic” (17%), while 3% of these start-ups did not request public support because 
they received automatic support from public authorities and deemed that enough to weather 
the storm (see Figure 11).  

Figure 11: Reasons for not requesting public support 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

As for the nature of support received (both by those that requested it and by those that received 
it automatically), the two most prominent kinds of support received were “Additional credit 
lines” (43%) and “Salary subsidies for employees” (36%), which markedly outdistance the 
third most frequent kind of support “Compensation payments for foregone business revenue” 
(18%) (see Figure 12). 

Figure 12: Nature of public support received17 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

17 The percentages in the bar graph show the proportion of respondents that chose that specific reply, and respondents 
could choose more than one reply. 

18 

 
 
 
 
 
 
                                   
 
 
The  “Assistance  in  re-organising  our  business”  and  “In-kind  assistance  to  respect  sanitary 
requirements” were obtained mainly by smaller start-ups (see Figure 13). However, this could 
be due to several reasons, for example these specific kinds of support being available just for 
smaller (or younger) companies, or smaller companies being the only ones to need them. It is 
worth  noting  that  “Facilitated  access  to  risk  capital”,  while  being  a  kind  of  support  rarely 
obtained, was obtained by start-ups of different sizes, up to about 50 employees. 

Figure 13: Nature of public support received per size of the start-up18 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

Of the start-ups that requested public support, 28% did not obtain it (see Figure 14). As for 
the reasons for not obtaining the support, the leading cause was “Did not fulfil the conditions” 
(44%). About 36% of respondents mentioned “Other” reasons, which include, for example, 
the applicant not being a local citizen, the issuing authority estimating there was no need for 
support,  and  the  start-up-up  having  employees  residing  outside  the  country  in  which  the 
support was requested.  

Figure 14: Request for public support and reasons for not obtaining it 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

18 Each point in the figure represents a received support of the corresponding nature (mentioned on the left) by a start-
up of the corresponding size (mentioned below). 

19 

 
 
 
 
 
 
 
 
 
 
Of  the  start-ups  that  received  public  support  (both  those  that  requested  it  and  those  that 
received it automatically), 25% were disappointed or very disappointed about it (see Figure 
15), while 48% of them were satisfied or very satisfied (and 24% remained neutral on this, 
i.e. they were neither satisfied nor disappointed). Regarding the reasons for disappointment, 
the  most  mentioned  issues  among  the  start-ups  that  obtained  public  support  were  “The 
measures were not appropriate for our business, thus the support did not address the main 
challenges  we  faced”  (45%)  and  “The  process  was  too  bureaucratic”  (24%),  which  were 
followed by “The process was too lengthy and therefore the support did not reach us at the 
right  time”  (22%).  Among  other  reasons  for  disappointment,  start-ups  reported  that  the 
amount of the financing received from local authorities was lower than they expected. 

Figure 15: Reasons for disappointment with public support received19 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

19 The percentages reported in the bar graphs refer to the frequency of that reply over the total of replies for that 
question, and the respondents could choose more than one reply. 

20 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finally, there seems to be a certain connection between the age and the size of the start-up 
and its chance of obtaining public support. Namely, older firms would tend to be bigger and 
we see that the start-up respondents were more likely to obtain public support if they had a 
higher number of employees and/or if they were rather older than younger (see Figure 16). 

Figure 16: Relationship between age or size of a start-up and share of start-ups obtaining 
public support 

Source: The Survey of EU start-ups and the COVID-19 pandemic, 2022 

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4.  Open questions 

In the framework of the survey, four open questions were posed to the respondents, asking 
them to elaborate their views on public support during crises, the lessons learnt, the challenges 
their start-ups face and on the current global situation. 

4.1 Question 1: “What suggestions do you have for improving public support measures 
for similar pandemic-related or other types of crises in the future? When possible, 
please clarify at which level (i.e. at local/regional, or at national, or at the EU 
institutions level) your specific suggestion should mainly be addressed.” 

Some respondents of the survey mentioned that the reason for not requesting public support 
was that they were unaware of its existence. It was thus suggested that extensive information 
about the available support should be given online, to make this support “more accessible”, 
e.g. by creating a one-stop shop website to “gather all the possibilities” regarding the public 
support measures. 

Some start-ups mentioned that they could not access public support as they did not fulfil the 
conditions for obtaining it. For example, a few start-ups mentioned that they were refused 
support on the grounds of them being “technological companies”, which could in theory work 
remotely. Yet, their business activity was completely paralysed due to their customers being 
traditional economic actors who had to suspend all their activities. Thus, they wish that the 
criteria for obtaining the support would also allow including such specific cases. 

Some respondents considered it erroneous to base support on decrease of sales against the 
previous year. Namely, many young start-ups did not have any sales during the previous year, 
and  were  consequently  refused  any  kind  of  support,  while  their  economic  prospects  had 
clearly  worsened  due  to  shrinking  markets.  Therefore,  these  respondents  suggested  taking 
their specific situation duly into account during the crisis, with adapted criteria for awarding 
public  support  to  them  as  well.  Essentially,  they  asked  for  a  tailored  support  to  start-ups, 
taking into account their specific needs and characteristics, which may differ from those of 
traditional small and medium-sized enterprises, and prioritize automatic allocations, as start-
ups often have limited resources. 

A complex and “highly-bureaucratic” application process has been a reason for some start-
ups not to even bother requesting public support. They claimed that the application for support 
often required the intervention of external consultants who were able to navigate bureaucracy. 
These respondents said that requesting public support should be easier than it was the case 
during the COVID-19 pandemic - and many also said that public support during crises needs 
to be provided fast, as time really matters, in particular for start-ups. 

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Only few respondents clarified at which level (i.e. at local/regional, or at national, or at the 
EU institutions level) their specific suggestions should mainly be addressed. However, some 
praised the EU level approach, e.g. by writing: “We have excellent experience with the level 
of EU institutions, but the local level is inadequate.” and “National financing programmes are 
user-unfriendly  (unlike  SME  Instrument,  H2020  or  Digital  Europe)”  and  “Lack  of 
transparency  when  it  comes  to  accessing  local  or  regional  funds.”  and  also  asked  for  a 
“Clearer communication at local/regional level.” 

4.2 Question 2: “What lessons do you draw for your own business in terms of the 
preparations for similar pandemic-related or other types of crises in the future?” 

Most  of  the  respondents  reported  that  the  COVID-19  pandemic  was  a  period  of  intense 
learning, which taught them lessons that will be highly useful in the future. Many underlined 
how they are now accustomed to a fully digitised work environment, and how hybrid work 
(if  not  completely  remote  work)  has  become  the  norm,  usually  praising  the  flexibility  it 
provides. However, some pointed out that remote work often resulted in a lack of work/life 
balance, which is a fundamental aspect to focus on in the future. 

As concerns business opportunities, many reported that the pandemic pushed them to better 
explore new markets, but also to create better and more resilient value chains in order to be 
able  to  keep  their  business  going  through  the  crises.  Furthermore,  some  stressed  the 
importance of having a diversified customer base, as they found out how risky it is to grow 
reliant on few customers, even if they provide quick opportunities for growth. 

As for the financial aspects of the business, many reported having learnt the importance of 
better  cash  flow  management  and  of  signing  longer-term  contracts.  Furthermore,  they 
emphasised  the  importance  of  building  strong  relationships  with  private  funders,  which 
proved fundamental to ensure the survival of some start-ups during tough periods. Finally, 
some  stressed  the  importance  of  having  sufficient  financial  runway  to  survive  market 
slowdowns, suggesting a runaway of around twelve months to be on the safe side in their 
view. 

4.3 Question 3: “What are the three top challenges for your business’s future over the 
next 5 years (such as investment, talent, geopolitical situation, etc.)?” 

Many respondents reported that a frequent challenge is finding the right skills/talent for their 
start-up, since on top of struggling to find them, it is also hard to offer them an attractive 
salary package due to inflation eroding purchasing power.  

Another  challenge  exposed  is  access  to  financing.  While  some  respondents  await  public 
financing support, others wish to wean themselves off such public support in favour of private 

23 

 
 
 
 
 
 
funding, since they consider public support too complex to apply for. They also point to low 
success rates when asking for public support and some mention that local and national public 
support is easier to get but generally smaller in amount than the support available on the EU 
level. 

Finally,  also  the  importance  of  focusing  more  on  the  EU  single  market,  both  in  terms  of 
customers and in terms of suppliers, was mentioned. Start-ups understand that - no matter 
what may happen in the future - it is likely that EU Member States will strive to ensure a 
continuity in the flow of goods and services throughout the EU. However, some respondents 
stressed  that  growing  their  business  within  the  EU  is  often  hindered  by  differences  in 
languages  and  regulatory  frameworks,  and  they  clearly  pointed  to  the  challenging 
administrative burdens.  

4.4 Question 4: “How is the current global situation, in light of the Russian war of 
aggression against Ukraine, affecting your start-up’s economic performance?” 

Many start-ups reported that the Russian war or aggression against Ukraine is not affecting 
their “day-to-day” operations, but that it could soon become a problem since their clients’ 
budgets  have  been  shrinking  and  there  is  a  risk  of  recession.  Start-ups  have  already  faced 
difficulties,  in  particular  due  to  inflation,  uncertainty,  customers  not  proceeding  with  the 
envisaged projects and a big drop in readiness to invest by venture capital funds and angel 
investors. 

Start-ups reported to be trying to help those affected by the war and also pointed out that the 
displacements as a consequence of the ongoing war made it easier to find workers in the EU 
equipped with the right technical skills.  

Finally, respondents underlined the shortage of supplies, including raw materials that were 
expected  to  be  coming  from  Ukraine  (such  as  steel),  which  pushed  them  to  look  for 
replacements elsewhere, but inevitably causing longer lead times and thus delays. 

*** 

Overall, we can conclude that the COVID-19 pandemic, coupled with the consequences of 
the Russian war or aggression against Ukraine, has had a significant impact on European start-
ups, resulting in various challenges and problems, but also presenting some opportunities, as 
the impacts on start-ups varied a lot. The lessons learnt shall be applied to future crises.  

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GETTING IN TOUCH WITH THE EU 

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