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Table 2. Perception of the crisis per main motive of company’s establishment. 
 
Income 
improvement 
Permanent job 
Exploit a business 
opportunity 
Economic 
necessity 
Materialization of business 
idea 
Total 
Opportunity 
2 
6 
6 
4 
13 
31 
Threat 
2 
5 
0 
11 
0 
18 

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49 
Evangelia Fragouli and Nikolaos Giannakovitis: Entrepreneurship and Financial Crisis: A Critical Investigation of
Entrepreneurship Prospects and Opportunities That Lie Behind the Financial Crisis 
As noted, the entrepreneurs who had, as their main motive, 
the materialization of their business idea, as well as to exploit 
a business opportunity, are, by 100%, the perception of the 
crisis as an opportunity. On the other hand, the vast majority 
of entrepreneurs who created their companies out of 
necessity, ve the perception of crisis as a threat, rather than 
an opportunity. 
7. Discussion, Limitations of the Study 
and Future Research Directions 
The main purpose of the current study is the identification 
of the factors which affect the decision of setting up new 
businesses in Greece, as well as identifying the factors 
associated with entrepreneurship, in a changing economic 
environment: Austerity measures have been adopted by the 
government, the banking sector has fewer resources to 
provide liquidity, consumption is decreasing, while 
unemployment remains at high levels. Entrepreneurship, both 
as a concept and as a practice, is a way to boost economic 
activity, in a long-term horizon and in a sustainable way. 
Entrepreneurship is directly connected to innovation, as well 
as to the development and promotion of country’s 
competitive advantage. On the other hand, entrepreneurship 
has, neither as a concept nor as practice, a unique form. 
People can establish a new company not because of a 
business idea or because of an analysis of the environment, 
but out of necessity. This way of entrepreneurship, although 
it solves some problems regarding the employment and is a 
source of potential income, can not guarantee growth in a 
stable and long-term growth. In the current analysis, the 
major findings show that new companies, established after 
the beginning of the crisis, is in the services, which is a non-
tradable sector, so it is extremely hard to improve the 
country’s competitiveness. Entrepreneurs, in a great 
percentage, tend to rely on friends and family, not just as a 
source of capital, but also as a source of business ideas. They 
are underestimating the role of institutions, such as 
universities and clusters on the formation of new business 
ideas. As the primary research shows, only a few 
entrepreneurs are making a business plan, and, at the same 
time, they don’t recognize the role of venture capitals and 
private equities as major sources of capital providers: instead, 
they overestimate the role of own savings, as well as the 
savings of family and friends.
Many new businesses have been established out of need, 
by unemployed or part-time employed people, who could not 
exploit a business opportunity they might prefer more. In that 
sense, they do not feel the need to have a business plan, not 
to actively search for capital. The main sources of capital are 
the friends and family, plus some help from the EU and 
government programs. Although most companies are 
recognizing the role of banks regarding liquidity provision, 
they do not have a business plan, which is essential in order 
to get a banking loan. 
A major issue of the study has to do with the funding 
capital of the new company. The analysis shows that most 
enterprises ignore the existence and the role of private equity, 
hedge funds and business angels. The study of Bamps and 
Schmiemann (2012) shows that there is a decrease of 
banking loans and new forms of financing, such as private 
equities and business angels are gaining share to business 
financing in Europe. Also, Minitti and Levesque (2008) note, 
at the beginning of the crisis, that hedge funds and private 
equities are replacing banks as providers of capital. This 
study shows that this trend has not been followed in Greece, 
something that should change if companies want to have a 
more flexible source of capital. There is a combination of 
factors which sets on overall image of entrepreneurship 
environment in Greece as one of the “necessity 
entrepreneurship”: Many companies have the legal form of 
“Sole Proprietorship”, which is an indication of low capital 
needs. As the main source of capital are being recognized the 
personal savings, accompanied by friends’ and family’s 
savings. Many entrepreneurs took their decision because they 
were unemployed. Many entrepreneurs do not have a 
business plan. Most entrepreneurs are underestimating the 
role of entrepreneurship education, setting it as last in the 
ranking of the important factors of Entrepreneurship. The 
factor of the possibilities of expansion has a low ranking 
among entrepreneurs. 
Although Greece has the second higher ranking among EU 
countries regarding the preference of self-employment, the 
current analysis shows that a big part of the self-employment 
motive is due to the need of entrepreneurship and not due to 
entrepreneurship as opportunity. Another key finding of the 
study is the lack of the involvement of the institutional 
environment, such as clusters and entrepreneurship 
education, to the establishment of new companies. A series 
of analyses (Bowen and De Clercq, 2008; European 
Commission, 2008; Mayjhew et al., 2012; Braunerhjelm and 
Henrekson, 2013; De Hoyos-Ruperto et al., 2013) show that 
the institutional environment, education and the networking 
of companies through clusters are very important elements 
for the successful entrepreneurship; instead, in Greece their 
role has not been acknowledged by entrepreneurs. On the 
other hand, there are clear signals that Greek entrepreneurs 
can be the decisive factor for the country’s progress and 
growth: in the midst of the crisis, people are establishing 
companies, with all and everything they have. They have to 
fight against bureaucracy, the level of tax rate and the 
complexity of the tax system, with the lack of an institutional 
information regarding the economy, sectors and the global 
competition. They have to fight with the decreasing liquidity 
of the banking system. However, instead of giving up, many 
are establishing new companies.