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Entrepreneurs bloom as COVID-19 fuels start-up surge

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Yahoo Finance’s Dani Romero breaks down the surge in start-up businesses amid the coronavirus pandemic.

Video Transcript

KRISTIN MYERS: Well, the pandemic fueled a surge of startups as entrepreneurs began new businesses, just at a time when so many businesses were shutting down. We have Yahoo Finance's reporter Dani Romero here with all of the details. Hi, Dani.

DANI ROMERO: Hi. Well, believe it or not, many are attributing it to the shutdown. While so many of us were locked away for months, some thought it was a great opportunity to jumpstart a new business. And I spoke with two entrepreneurs in San Francisco that say even though they were not-- first of all, they were not discouraged, even though amidst the uncertainty-- an entrepreneur, Ruben Stack, who started his business this year selling a functional workspace desk called Work Wall wanted to offer a solution for the modern day student and the work-from-home employee.

Stack himself was also working from home using his kitchen tables, so he understood the need for a functional desk as employees continue to work from home. And what's interesting is according to Goldman Sachs analysis, the number of active small businesses is only 4% below pre-pandemic level, while the number of total small businesses is up. And not only that, 4.3 million new business applications were filed last year in 2020, which is 1 million more than in 2019.

ALEXIS CHRISTOFOROUS: You know, Dani, of course, it's great news when you see these startups and entrepreneurial spirit alive and well, but you sort of wonder how much of that was just, you know, in the moment decision-making, and that these entrepreneurs don't really have what it takes to have the momentum to continue with their businesses when we're on the other side of this pandemic.

DANI ROMERO: You know, that is the big question, right-- will they survive post-pandemic? But from what I'm hearing from entrepreneurs is that they're hoping to go against all the odds. A San Francisco entrepreneur I spoke with says, quote, "I'm all for just risking everything, because otherwise you never know if you just don't take that risk and really just go for it," end quote. But there have been some challenges for the small business owners as well-- from funding their startup to getting permits approved by the city.

So it hasn't been smooth sailing either for them during the pandemic. However, there are studies that show more new businesses have been started by women and people of color. Last year, 11% of new business owners were Black. And 49% were women. So although there is that uncertainty, they're really hoping to beat the odds.

KRISTIN MYERS: All right. And of course, that story can be read on YahooFinance.com. Thanks so much, Dani Romero, for bringing us that story.