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University of Michigan Law School

Banking and Finance Law

Entrepreneurship

Michigan Business & Entrepreneurial Law Review

2013

Articles 1 - 2 of 2

Full-Text Articles in Law

Incubator Cities: Tomorrow's Economy, Yesterday's Start-Ups, Abraham J.B. Cable Jan 2013

Incubator Cities: Tomorrow's Economy, Yesterday's Start-Ups, Abraham J.B. Cable

Michigan Business & Entrepreneurial Law Review

Venture development funds (“VDFs”) are products of state and local government law that use public funds to invest in local start-ups, in the hope that these companies will then attract venture capital investment. Existing analysis by legal scholars largely assumes that establishing a private venture capital market is essential to encouraging entrepreneurship. This article challenges that assumption. It argues that VDFs and other policies focused on encouraging venture capital are outmoded and inconsistent with the ultimate economic development goals of state and local governments. In many industries, entrepreneurs can now get by with less capital because the cost of developing ...


Should Angel-Backed Start-Ups Reject Venture Capital?, Darian M. Ibrahim Jan 2013

Should Angel-Backed Start-Ups Reject Venture Capital?, Darian M. Ibrahim

Michigan Business & Entrepreneurial Law Review

The conventional wisdom is that entrepreneurs seek financing for their high-growth, high-risk start-up companies in a particular order. They begin with friends, family, and “bootstrapping” (e.g., credit card debt). Next they turn to angel investors, or accredited investors (and usually ex-entrepreneurs) who invest their own money in multiple, early-stage start-ups. Finally, after angel funds run dry, entrepreneurs seek funding from venture capitalists (VCs), whose deep pockets and connections lead the startup to an initial public offering (IPO) or sale to a larger company in the same industry (trade sale). That conventional wisdom may have been the model for start-up ...