When the economic environment gets more challenging, you’d think there would be fewer opportunities to invest in game-changing, innovative companies, right?

Now, this might surprise you.

Some of best-known businesses backed by venture capital were formed in the doom and gloom of uncertain periods.

There’s Zoopla, Uber, and Airbnb. They all flourished in the wake of the 2008 financial crisis.

So, what’s going on?

Periods of recession bring about difficult conditions for all businesses. Some will fail. Unemployment rises. These are well-documented effects of a slowing economy.

What you might not realise is that for investors in early-stage businesses, these very same conditions can also create compelling conditions for entrepreneurs.

Seizing the moment

Malcolm Ferguson, a fund manager at Octopus Ventures, explains:  “We may be in the best period in over a decade to start, and therefore invest into, a new company.”

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