Table of contents
Table of contents 2
Executive Summary 3
I: Key financial trends 4 Global Financial Crisis 4 European Sovereign Debt Crisis 6 Tighter financial regulation 8
II: Impact on entrepreneurial start-ups 9 Investment and valuation decisions 9
References 15
Appendix A: Effects of recession on entrepreneurial start-ups 17 Appendix B: New trend – business incubators 23 Appendix C: Valuation methodology 25

Executive Summary
The Global Financial Crisis (GFC) is widely seen as the worst financial crisis since the great depression in the 1930’s. It negatively impacted global financial markets, led to the collapse of major financial institutions, the nationalisation of banks and caused a deep global recession. From its beginnings in the United States, networked financial institutions quickly led to international contagion and the European sovereign debt crisis.
In response, the G20 officially endorsed Basel III – a new global standard to reduce systemic risk through stronger capital bases designed to act as a buffer during periods of financial instability and avoid bailouts.
Sustained European government efforts to reduce debt through austerity have largely failed, and focus is now shifting to growth strategies. Entrepreneurial start-ups are a key route to driving long-term sustainable growth, but have been hit hard by sluggish consumer demand, tightening credit and scarce, expensive capital.
This report discussed some of the implications for both entrepreneurs and Venture Capital funds, including flight-from-risk, fewer opportunities for profitable exits, lower funding levels and reduced number and diversity of VC funds. Exciting new opportunities have also emerged in new types of business incubators and alternative funding structures.

I: Key financial trends
This section will focus on three major trends and events that have had a