Five Essays On Entrepreneurial Finance Exploring New Ventures Financing Sources
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Five Essays On Entrepreneurial Finance Exploring New Ventures Financing Sources
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Author : Elmar Lins
language : en
Publisher:
Release Date : 2016
Five Essays On Entrepreneurial Finance Exploring New Ventures Financing Sources written by Elmar Lins and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Five Essays On Entrepreneurial Finance Exploring New Ventures Financing Sources
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Author : Elmar Lins
language : en
Publisher:
Release Date : 2016
Five Essays On Entrepreneurial Finance Exploring New Ventures Financing Sources written by Elmar Lins and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Essays In Entrepreneurial Finance
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Author : Ramana Nanda
language : en
Publisher:
Release Date : 2007
Essays In Entrepreneurial Finance written by Ramana Nanda and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
There is growing belief that countries with better financing environments are associated with higher economic growth because they facilitate entrepreneurship and hence the Schumpeterian process of 'creative destruction'. This dissertation explores this hypothesis in more detail by understanding how the financing environment for new ventures impacts outcomes such as individuals' decision to become entrepreneurs, their sources of financing and the growth and survival of their firms. Rather than performing cross-country analyses however, the approach used in this dissertation is to perform within-country studies that shed more light on the mechanisms through which the financing environment impacts entrepreneurial activity. The first two essays in the dissertation exploit institutional reforms - one in Denmark and another in the US - that changed the financing environment for new businesses to study how they impacted individuals' entry and survival. These natural experiments are supplemented with detailed and comprehensive micro data that allow me to both explore and the refine the mechanisms at play in more detail. The final paper is more descriptive in nature and examines how the variation in entrepreneurs' use of Diaspora networks in developing countries is related to the financing and networking environment of the city in which they are based.
Essays In Entrepreneurial Finance
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Author : Roy Kenneth Roth
language : en
Publisher:
Release Date : 2019
Essays In Entrepreneurial Finance written by Roy Kenneth Roth and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
In this dissertation, I study how the structure and conventions of the venture capital market affect the behavior of both investors and entrepreneurs. The venture capital market is characterized by high-risk investments with the potential for extreme rewards. The current structure and conventions of the market have developed at least in part to mitigate the level of risk faced by the investors. Characteristics of the market include convertible preferred securities, staged investment and board representation for investors among other features. In the first chapter of this dissertation, I study the effects of stage financing on effort provision and firm value, weighing the advantages of upfront financing against the incentive to misuse the capital for personal reasons. In the second chapter, I study how the use of convertible preferred securities and board representation affect the level of risk chosen by venture capital-backed firms. Both chapters primarily deal with the market structure as given, thus, the focus of this dissertation is on understanding the effects of the current market structure on real decision-making, rather than providing justification for observed conventions. In so doing, I uncover insights not previously available and meaningfully contribute to the existing literature. In the first chapter, I explore the optimal staging path for venture capital-backed companies. Staging investment allows a portion of the risk inherent to financing new ventures to be mitigated, as some portion of the needed funds can be withheld until after initial progress is realized. As a result, companies that show poor intermediate signals can be abandoned, saving investors from likely losses. Additionally, despite investors' representation on the board of directors, some misbehavior by the entrepreneur may not be preventable ex-post. Hence, there is value in limiting the amount of capital that the entrepreneur has access to while the firm is young and opaque, as this limits the amount that can be misused. These factors create a motive for stage financing. However, providing a larger amount of capital upfront can also provide flexibility and operational efficiencies that increase the potential value of the project. Weighing these effects against each other leads to an internal optimum level of staging, where some capital is provided upfront but a portion is withheld until further information is revealed and the firm matures. The entrepreneur's preferred level of capital raised initially exceeds the level that maximizes the value of the firm. I further explore how the solution changes when the entrepreneur disagrees with investors over the likely value of the project. Specifically, I study how the solution is affected when the entrepreneur is more optimistic about the distribution of project outcomes than are investors. This creates two separate effects that oppose each other. On one hand, optimistic entrepreneurs are less likely to misbehave and waste capital, lowering the cost of providing capital upfront and increasing the optimal amount raised initially. On the other hand, optimists believe that the price they can get for their equity will be higher in the future, increasing the perceived cost of upfront financing and decreasing its optimal level. I illustrate that in low information settings the former effect dominates while in high information settings the latter dominates. These findings provide insight into the staging decision not previously available. In Chapter 2 I focus on the incentives for risk-taking facing both entrepreneurs and investors. In venture capital financing, investors take convertible preferred stock which is senior to the common stock held by the entrepreneurs. Traditional economic logic would then imply that the entrepreneur has a stronger incentive for risk-taking than does the investor, by virtue of the security design. However, I show that this is not always the case. I explore how the incentives of the decision-making investors, the general partners of venture capital funds, are affected by the fact that they manage funds of other peoples money. Hence, their compensation profile is not linearly related to fund value. In particular, general partners are compensated with a mixture of fixed and performance sensitive income. I show that the performance sensitive component, carried interest, introduces a kink into the payoffs of the general partners which induces a preference for risky strategies in certain situations. My model predicts two key scenarios where, despite holding a senior security, general partners are more risk-seeking than entrepreneurs. First, general partners are risk-seeking late in the life cycle of their funds if prior performance has been poor. This is similar to the "gambling for resurrection'' effect in firms near default. Furthermore, in many cases, the possibility of future poor performance is sufficient to induce the GP to prefer high-risk strategies even early in the life of the fund, before intermediate progress has been realized. These findings are empirically relevant and shed light on which parties are the driving forces behind the level of risk selected by startup firms.
Entrepreneurial Finance
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Author : Cristiano Bellavitis
language : en
Publisher: Routledge
Release Date : 2019-07-23
Entrepreneurial Finance written by Cristiano Bellavitis and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-07-23 with Business & Economics categories.
This book examines the proliferation of new sources of entrepreneurial finance and how these sources have the potential to make it easier for ventures to raise capital and grow. To date, entrepreneurial finance literature has developed a rich tradition of research on venture capital and angel finance. However, the emergence of ‘new’ sources of finance – such as crowdfunding – and the limited attention paid to ‘traditional’ debt financing and financial bootstrapping offer opportunities to explore, from different points of view and theoretical perspectives, the challenges that ventures face. The objective of this book is to explore these new and traditional sources of finance; suggest how these phenomena can be better understood conceptually; and guide new ways of understanding the topic in future, especially for researchers. The introduction outlines the new sources of entrepreneurial finance, and in comparing them with more traditional sources, proposes challenges in our conceptual understanding of these new and traditional sources. The subsequent chapters deal with important topics, including looking at the way different funding sources may interact; factors that impede family firms from getting external funding; how best to succeed with equity crowdfunding by looking at pre-selection processes; considering differences in perceptions towards funding sources arising from whether entrepreneurs are native born or immigrants; factors to consider when funding specialized assets in high uncertain sectors such as biotechnology; and the internationalization of business angel activity. This book was originally published as a special issue of the Venture Capital journal.
Advances In Entrepreneurial Finance
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Author : Rassoul Yazdipour
language : en
Publisher: Springer Science & Business Media
Release Date : 2010-12-17
Advances In Entrepreneurial Finance written by Rassoul Yazdipour and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-12-17 with Business & Economics categories.
Advances in Entrepreneurial Finance brings together contributions from researchers from the fields of entrepreneurship, behavioral finance, psychology, and neuroscience to shed new light on the dynamics of decision making and risk taking by entrepreneurs and venture capitalists (VCs). Every new venture requires access to capital at competitive interest rates, and much has been written on general entrepreneurship by management scholars and financial contracting by financial economists using traditional finance theory with all its highly restrictive assumptions regarding decision makers’ cognitive capabilities and behavior. But recent developments in behavioral finance can now be applied to understand how entrepreneurs and VCs perceive risk and uncertainty and how they decide and act accordingly. Showcasing the latest research, this volume demonstrates that findings from the behavioral and neuroscience arenas can and do explain decision making by entrepreneurs and venture investors in the real world. Consequently, such findings have practical implications not only for entrepreneurs, venture capitalists, and their advisors, but also all government agencies and NGOs that want to support product and technological innovation, capital formation, job creation, and economic development.
Financing Entrepreneurship
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Author : Philip E. Auerswald
language : en
Publisher: Edward Elgar Publishing
Release Date : 2008
Financing Entrepreneurship written by Philip E. Auerswald and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Business & Economics categories.
Auerswald and Bozkaya have edited this collection of 24 papers about entrepreneurial finance, and the role the government takes in financing and motivating these concerns. These papers emphasize how entrepreneurs have taken advantage of a globalized economy to achieve unprecedented and accelerated success. Topics include the role of private equity and debt markets, entrepreneurial survival tactics and the relationship between entrepreneurs and bureaucrats. Written for business students and modern entrepreneurs, this large reference volume also discusses the debate between self-financing vs. the use of lending institutions.
Advanced Introduction To Entrepreneurial Finance
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Author : Hans Landström
language : en
Publisher: Edward Elgar Publishing
Release Date : 2017-06-30
Advanced Introduction To Entrepreneurial Finance written by Hans Landström and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-06-30 with Entrepreneurship categories.
This book synthesises and stretches our knowledge on entrepreneurial finance and will be invaluable for high level MBA students. It reviews the state-of-the-art and the context of entrepreneurial finance, before outlining the entrepreneur's perspective on the demand for capital, the financier's perspective on its supply and the future direction of research in the area.
Entrepreneurial Finance In Emerging Markets
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Author : Darek Klonowski
language : en
Publisher: Springer Nature
Release Date : 2020-08-10
Entrepreneurial Finance In Emerging Markets written by Darek Klonowski and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-08-10 with Business & Economics categories.
This book presents a wide range of tools and techniques used in entrepreneurial finance in emerging markets. Among them, venture capital is perhaps the best known, understood, and researched mode of entrepreneurial finance. However, a significant focus of the book is dedicated to other modes of entrepreneurial finance such as ‘bootstrapping,’ angel financing, bank financing, and other alternative means of financing, which could include government assistance programs, business incubation, technology parks, or family financing. In addition, the book highlights how new and innovative financial technologies (comprised of software, business processes, and other modern technologies), known under the term of FinTech, may support, enable, and enhance the provision of different modes of entrepreneurial finance in emerging markets. The book also discusses entrepreneurial finance in emerging markets in the context of women entrepreneurs. A comprehensive analysis of entrepreneurial finance in emerging market countries, this book will appeal to academics, researchers, and students of entrepreneurial finance, venture capital and private equity, entrepreneurship, and international business.
How To Raise Capital
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Author : Jeffry A. Timmons
language : en
Publisher: McGraw Hill Professional
Release Date : 2004-10-21
How To Raise Capital written by Jeffry A. Timmons and has been published by McGraw Hill Professional this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-10-21 with Business & Economics categories.
The entrepreneur's step-bystep guide to venture capital--where to find it, how to secure it, and what to do with it Fewer than 40 percent of entrepreneurs seeking new business funding each year actually get that funding. How to Raise Capitalimproves those odds, providing prospective as well as current business owners with the knowledge they need to prepare an effectiveloan proposal, locate a suitable investor, negotiate and close the deal, and more. The all-star team of entrepreneurial experts behind How to Raise Capital gives readers top-level educational theory with hands-on, real-world knowledge. This thorough examinationof the inner workings of the venture capital industry explores: Resources available to entrepreneurs, from SBA loans to angel investors Proven strategies for identifying and approaching equity sources Characteristics of a "superdeal"--from the investor's perspective