Finance and Financial Management Commons^™

Start-Up Funding Via Equity Crowdfunding In Germany – A Qualitative Analysis Of Success Factors, Martin Angerer, Alexander Brem, Sascha Kraus, Andreas Peter

The Journal of Entrepreneurial Finance

Entrepreneurs often struggle to find sufficient funding for their start-ups. A relatively new way for companies to attract capital is via an internet platform, locating investors who in return receive something in return for their ventures. Equity crowdfunding is one of several types of crowdfunding, and is also known as crowdinvesting in the German-speaking realm. This article predominantly advances the scientific knowledge regarding the success factors of equity crowdfunding for German start-ups. The study conducted nine qualitative interviews with start-ups and crowdinvesting platforms. Its first result is that German start-ups select crowdinvesting because (1) it is a funding opportunity and …

On The Behavior Of Entrepreneurial Factor Supply To The Firm, Nicos Zafiris

The Journal of Entrepreneurial Finance

This paper draws on an existing, but little used, approach to the choices governing the supply of ‘entrepreneurial’, in the sense of ‘residually remunerated’, resources to an enterprise, especially post start up. It focuses in particular on the hybrid ‘own factor demand/supply curve’ to the firm of Bronfenbrenner (1960), but attempts to treat such supply in conjunction with ‘contractual’ employment of resources, thus making use of gearing and portfolio concepts. To achieve this, it is found necessary for the hybrid schedule to be reinterpreted and recast as the locus of the relevant utility maximising choices. A model is presented which …

Commercial Bank Small Business Lending Pre And Post Crisis, Kevin T. Jacques, Richard Moylan, Peter J. Nigro

The Journal of Entrepreneurial Finance

We analyze small business lending at U.S. commercial banks, how it has changed over time and how it differs by bank size. Specifically, we examine the impact of government policy intervention on small business lending in the aftermath of the financial crisis. We find several important results. First, we find that the Troubled-Asset Relief Program’s (TARP) $200 billion Capital Purchase Program (CPP) had little impact on the banks that received capital injections’ small business lending. Second, the Small Business Loan Fund (SBLF) lending program appears to have been a success as banks participating in the loan fund increased their lending …

Risk Management In The Venture Capital Industry: Managing Risk In Portfolio Companies, Dorian Proksch, Wiebke Stranz, Andreas Pinkwart, Michael Schefczyk

The Journal of Entrepreneurial Finance

Managing risk is one of the main activities of venture capital companies. Despite the fact that this topic is of high practical relevance, only little research was published on risk management performed by venture capital companies in their ventures. Hence, we conducted a structured literature review which was the basis for developing five hypotheses concerning measures to decrease failure risk in venture capital-backed ventures. We tested these hypotheses with an empirical data set of 93 venture capital-backed ventures in Germany using original deal data from nine different venture capital funds using a structural equation model. We showed that the experience …

Pass-Through Valuation, Robert M. Hull, David P. Price

The Journal of Entrepreneurial Finance

Noted scholars argue that (1) economic models of capital taxation have been inadequately adapted to owner-managed enterprises and (2) capital structure researchers have used the wrong models while also improperly measuring key variables. Thus, a model that can overcome these problems should be of interest to academics when teaching capital structure theory and practitioners when determining optimal debt levels. This paper contributes to capital structure practice by using a model that is adaptable to owner-managed enterprises like pass-throughs while also containing relevant variables that are measurable. This paper should be valuable to academics and practitioners in the following ways. First, …

Investors Dilemma, Adam R. Marasco

Walk the Talk Case Writing Competition

The case shows an ethical dilemma with Angel investor Arthur Vandelay. His Angel fund has the choice to invest in two different businesses. One was started by a Stanford MBA who may have obtained the idea for the business unethically. The other is run by a hardworking man from Pittsburgh who needs this money to keep his business alive and provide for his family. The Stanford MBA clearly has the better business and Vandelay is the deciding vote. He faces a dilemma on whether to invest with his head or go with his heart.

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Small Business Owner Satisfaction With Financial Performance: A Longitudinal Study, Shanan G. Gibson, William C. Mcdowell, Michael L. Harris

New England Journal of Entrepreneurship

This exploratory study examines the financial performance satisfaction of small business owners at two time periods: (1) nearing the end of the Great Recession and (2) three years into economic recovery. In addition to considering small business owners in general, special attention has been paid to women and minority owners. Using independent samples t-tests, results indicate that business owners are more satisfied with their financial performance in 2012 than they were in 2009. However, results were not consistent for all subgroups of the population; differences exist between men and women owners and between Caucasian and minority owners. Whereas men mirrored …

Corporate Or Network Governance? The Case Of The Italian Productive Chains And Their Scaffolding Finance Approach., Guido Max Mantovani, Teresa Guidone

The Journal of Entrepreneurial Finance

We investigate and find out the inner differences between stand-alone firms and those participating to Productive Chain Networks (PCNs) as far as ownership and corporate governance characteristics are concerned. PCNs are typical Italian economic realities made of small and medium enterprises (SMEs) which behave like a unique meta-firm. Different clusters are found from an empirical analysis: firms outside PCNs, leaders in PCNs and suppliers participating to PCNs. The clusters differentiate on corporate governance practices and the consequent capability to attract funding from financial institutions. The inner differences in governance structure relate to the underpinnings of the competitive advantage of the …

Ethics And Market Economic System: A General Review And A Survey, Reza G. Hamzaee

International Journal of Applied Management and Technology

Recent global recession has motivated this predominantly historical and exploratory research of thoughts and perceptions. A continuous planning of governmental correction of any market failure, such as various types of externalities and information asymmetry, has been strongly recommended by the pioneers of free enterprise systems. Capitalism—in which private ownership of means of production, physical capital, human capital, financial capital, brand-name capital, social capital, land, and mineral deposits are all protected by law without implementation of a series of certain evolving ethical standards and principles—may not continue to be the same efficient system as implied to be by the cost-benefit balancing …

Women As Leaders In Differing Microfinance Models, Rae M. Randleman

Journal of Interdisciplinary Feminist Thought

One of the original microfinance institutions (MFIs) is Grameen Bank in Bangladesh and the founder of the bank is Muhammad Yunus (2007). Yunus (2007) initiated a discourse that stated that microloans granted to women resulted in, among other things, increased female empowerment. Much of the global microfinance industry (MFI) has mimicked Yunus’ focus on women and thus created a global master narrative which stated that the capitalist system of credit provided to marginalized women can alleviate poverty and empower women. Other development organizations contend that by itself microfinance cannot empower women; empowerment also requires long-term efforts to influence change in …

Bootstrapping Techniques And New Venture Emergence, John T. Perry, Gaylen N. Chandler, Xin Yao, James Wolff

New England Journal of Entrepreneurship

Among nascent entrepreneurial ventures, are some types of bootstrapping techniques more successful than others? We compare externally oriented and internally oriented techniques with respect to the likelihood of becoming an operational venture; and we compare cash-increasing and cost-decreasing techniques with respect to becoming operational. Using data from the first Panel Study of Entrepreneurial Dynamics, we find evidence suggesting that when bootstrapping a new venture, the percentage of cash-increasing and cost-decreasing externally oriented bootstrapping techniques that a venture’s owners use are positive predictors of subsequent positive cash flow (one and two years later). But, internally oriented techniques are not related to …

Financing Maine’S Food Enterprises, Ron Phillips

Maine Policy Review

There is a need to rebuild and retool the food system as the emphasis turns to more local and regional approaches. There is an abundance of social capital to make this happen and more and more financial capital. Ron Phillips provides an overview of the various ways Maine’s food-production and processing enterprises are financed and the critical components needed for financing to be secured. Two small businesses are profiled: MOO Milk, an organic dairy cooperative, and Look’s Gourmet Food of Washington County.

Local And Regional Food Systems: A Usda Priority, Virginia Manuel

Maine Policy Review

Virginia Manuel gives examples of innovative Maine food production, distribution and processing projects and businesses and the ways USDA rural development is financing them.

Proof Of Concept Fund Approach To Small And Medium Enterprise Franchising And Marketing Research Findings., Omolara O. Akanji

Bullion

Over the past 20 to 25 years small scale enterprises have exploded in the informal sector of the Nigeria's businesses. The informal sector study (CBN, NISEK 2000) showed that over 25,000 small scale enterprises were in existence in the agro industrial production sector of the economy during the year 2000. This paper proffers a model of funding called "Proof of Concept Fund" as a bridging credit facility to research institutes and small scale industrialist who would want to patent/franchise budding research findings to commercialization. The study reveals that there are substantial empirical studies of countries that have used the Proof …

Entrepreneurial Financing—Alternatives For Raising Capital, Paul Broude, Joseph E. Levangie

New England Journal of Entrepreneurship

Most entrepreneurs are continually concerned about their finances. Their companies perhaps not yet profitable, they may have a fear of “running out of dry powder.” These entrepreneurs often have fallen in love with their company’s technologies, products, and potential markets, but they require more resources. Invariably these emerging ventures shroud their fear of the grueling capital raising marathon by presenting voluminous business plans to potential investors. They often flaunt their “optimized business models.” Investors, however, typically want to know why the potential investment is such a good deal. The entrepreneur often wants guidance regarding what to say to whom in …

Preparing Your Business For Valuation, Margaret D. Nowicki, Eric E. Lewis, Jeffrey W. Lippitt

New England Journal of Entrepreneurship

There is a tremendous need for the valuation of small businesses. Oftentimes, small businessowners do not have the wherewithal to gather the data and keep it up to date for use in situations that require valuation. Formal valuations are necessary because they provide objective evidence of value, in contrast to value set by markets on which public companies are traded. This article focuses on some factors that impact the valuation of the business and will help small businessowners feel more comfortable talking with financial professionals about how the business might be valued.

A System Dynamics Approach To Assessing Public Policy Impact On The Sustainable Growth Rate Of New Ventures, Jeff W. Trailer, Kuau Garsson

New England Journal of Entrepreneurship

The growth of firms is fundamentally based on self-reinforcing feedback loops, one of the most important of which involves cash flow. When profit margin is positive, sales generate cash, which may then be reinvested to finance the operating cash cycle. We analyze simulations of a sustainable growth model of a generic new venture to assess the importance of taxes, and regulatory costs in determining growth. The results suggest that new ventures are particularly vulnerable to public policy effects, since their working capital resource levels are minimal, and they have few options to raise external funds necessary to fuel their initial …

Creating An Enabling Environment For Small-Scale Industries., K. M. Obitayo

Bullion

This paper explores how to create enabling environment for the development of small-scale industries (SSIs) which are globally noted for their immense contributions to development process and as engine of economic growth. The rest of the paper is divided into five sections. Section ll reviews the definition of SSls and highlights some relevant economic significance of SSls, Section lll reflects government's past efforts in supporting the developments of SSIs in Nigeria. Section lV discusses SSls constraints while Section V dwells on the key policy issues for creating an enabling environment for SSls. Finally, Section Vl, provides the concluding remarks and …

Economics Of Vine Growing, K R. Rutter

Journal of the Department of Agriculture, Western Australia, Series 4

Heavy demands are made on capital and labour recources throughout the five year dvelopment phase of a vineyard.

Labour and capital requirements vary considerably, but the following gives a look at one example of the costs involved.

Last Resort Loans For Farmers, J Ripley

Journal of the Department of Agriculture, Western Australia, Series 4

Several sources of finance are available to help fsrmers survive through a crisis.

One source of last resort is Rural Adjustment Authority.