9 Items

Book - VDM Verlag Publishing

Entrepreneurial Finance: Financing of Young Innovative Ventures

| April 2009

This book aims to better understand the process of the funding of young innovative ventures, and how a deeper understanding of this process can help public policy to better stimulate entrepreneurial firms—especially in high-technology industries.

These essays, complemented by a comprehensive introduction, are essential for scholars, researchers, policymakers, and entrepreneurs wishing to advance their understanding of this important and expanding field of study.


Labor Regulations and European Industrial Specialization: Evidence from Private Equity Investments

| May 2008

European nations empirically substitute between employment protection regulations and labor market expenditures like unemployment insurance benefits in the provision of labor market insurance to workers. While perhaps substitutes from a worker's perspective, employment regulations more directly tax firms making frequent labor force adjustments. These labor adjustments are especially important for the portfolio companies of both venture capital and buy-out investors. European nations providing worker insurance through labor market expenditures developed stronger domestic private equity markets over the 1990-2004 period than those nations favoring employment protection. These patterns are further evident in US-sourced private equity investments into Europe. Moreover, tests for industry specialization suggest that countries with more flexible labor markets tend to specialize in sectors characterized by high labor volatility. These results are relevant to the literature examining the impact of labor market regulations on entrepreneurship and productivity growth due to reallocation across firms and sectors.

Click here for the full text.

Book - Edward Elgar Publishing, Inc.

Financing Entrepreneurship

| May 2008

This important collection comprises foundational papers which offer an understanding of the conceptual and historical substructure of entrepreneurial finance and more recent seminal works about entrepreneurs and the obstacles that they systematically seek to overcome. Further articles describe the variety of institutional forms that have evolved to address the challenges inherent in entrepreneurial finance and the role of government in the process of innovation, entrepreneurship and the financing of new ventures. These papers, complemented by the editors' comprehensive introduction, are essential for scholars, researchers, policy makers and entrepreneurs wishing to advance their understanding of this important and expanding field of study.

Paper - Harvard Business School

Bundling the Contracts: TA-Energy

| December 1, 2006

Stimulates discussion of entrepreneurship in emerging economies, especially for entrepreneurs returning to their home countries to start businesses with global technologies and partners. Focuses on the partnership tensions between global firms and local family-dominated conglomerates. Addresses new venture financing in an asset-intensive business through the assembly of strategic contracts. More broadly, highlights the opportunities and challenges for returnee entrepreneurs. Designed for entrepreneurial and international business courses.

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Paper - Harvard Business School

Labor Market Regulation and European Venture Capital Investment

| August 31, 2006

Venture capital investment is a significant factor in explaining the entrepreneurial and innovative successes of the U.S. over the past three decades. VC investment in most European regions, however, has been much slower to develop. This paper identifies the institutional factors and government policies that have inhibited this funding historically, discusses recent advances made in several European regions to attract domestic and foreign investors, and documents current investment levels.

Journal Article - Economics of Innovation and New Technology

Who Funds Technology-Based Small Firms? Evidence from Belgium

| April 2008

Using an original survey sample of 103 unquoted Belgian technology-based small firms (TBSFs), we examine the capital structure of start-up companies during their consecutive development stages. We find that internal funds, either alone as personal savings or in combination with family and friends, to be the primary source of financing. Personal funds of the founders are used to finance the start of 82% of TBSFs. Commercial bank and government funds are the most important sources of external finance for TBSFs subsequent to start-up. Most founders agreed that business angels and venture capitalists play a greater role at later stages. However, once granted, more substantial amounts of funding come from venture capitalists. There is also evidence that suggests a change in the mix of internal and external sources of finance. Finally, our findings based on founders' scores in raising external funds suggest a call for urgent policy action to improve access to and availability of early-stage entrepreneurial finance in Belgium. We discuss our findings in light of the capital structure of small firms relating to TBSFs.

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Book Chapter

The Financial Architecture of Technology-Based Small Firms in Belgium: An Explorative Study

The evidence accumulated in this paper is consistent with the theoretical arguments that start-up companies face crucial difficulties in accessing external finance at early stages. We find that personal funds of the founders are the primary source of seed financing in 82 percent of the cases. Government subsidies of all kind and commercial bank loans are the primary external source of capital during early stages while business angels and venture capitalists play a greater role in later stages of development. There is also evidence that suggests an evolution of the mix of internal and external sources of capital. We find that the proportion of funds from internal sources declines while the proportion from external debt and equity sources increases with firms' age. Our findings based on entrepreneurs' scores in raising external sources of capital signal an equity gap rather than a management gap.