Financing Small Businesses: From Venture Capital to Crowdfunding

Open access

Abstract

Startups and small businesses are facing many challenges in terms of financing their activities. These types of companies do not have the possibility to access capital market or to make IPO or to borrow money from banks like big, mature or well-known companies (who were at their beginnings startups or small businesses). They have to find different sources for financing their ideas/products/services that are in many cases very risky, hazardous or to ambitious. But, fortunately, the financing alternative for these companies have evolved during the last post crisis years. They have possibility to find some investors that are willing to invest in a non-name company by accessing crowdfunding platforms, impress angel investors, or attracting venture capital. All that in order to develop their business and to become a unicorn or to have a great exit.

Agrawal, A., Catalini, C., & Goldfarb, A. (2014). Some simple economics of crowdfunding. Innovation Policy and the Economy, 14(1), 63-97.

Ahlers, G. K., Cumming, D., Günther, C., & Schweizer, D. (2015). Signaling in equity crowdfunding. Entrepreneurship Theory and Practice, 39(4), 955-980.

Belleflamme, P., Lambert, T., & Schwienbacher, A. (2014). Crowdfunding: Tapping the right crowd. Journal of business venturing, 29(5), 585-609.

Bernstein, S., Giroud, X., & Townsend, R. R. (2016). The impact of venture capital monitoring. The Journal of Finance, 71(4), 1591-1622.

Block, J., & Sandner, P. (2009). What is the effect of the financial crisis on venture capital financing? Empirical evidence from US Internet start-ups. Venture Capital, 11(4), 295-309.

Brown, K. C., & Wiles, K. W. (2015). In Search of Unicorns: Private IPOs and the Changing Markets for Private Equity Investments and Corporate Control. Journal of Applied Corporate Finance, 27(3), 34-48.

Croce, A., Martí, J., & Murtinu, S. (2013). The impact of venture capital on the productivity growth of European entrepreneurial firms: ‘Screening’or ‘value added’effect?. Journal of Business Venturing, 28(4), 489-510.

Cumming, D. J., Grilli, L., & Murtinu, S. (2017). Governmental and independent venture capital investments in Europe: A firm-level performance analysis. Journal of Corporate Finance, 42, 439-459.

De Prijcker, S., Manigart, S., Collewaert, V., & Vanacker, T. (2017). Relocation to get venture capital: a resource dependence perspective. ENTREPRENEURSHIP THEORY AND PRACTICE.

Devece, C., Peris-Ortiz, M., & Rueda-Armengot, C. (2016). Entrepreneurship during economic crisis: Success factors and paths to failure. Journal of Business Research, 69(11), 5366-5370.

Gerber, E. M., Hui, J. S., & Kuo, P. Y. (2012, February). Crowdfunding: Why people are motivated to post and fund projects on crowdfunding platforms. In Proceedings of the International Workshop on Design, Influence, and Social Technologies: Techniques, Impacts and Ethics (Vol. 2, p. 11).

Global Corporate Venture Capital Report (2016), CBInsight, Gompers, P. A. (1995). Optimal investment, monitoring, and the staging of venture capital. The journal of finance, 50(5), 1461-1489.

Gompers, P. A., & Lerner, J. (2004). The venture capital cycle. MIT press.

Gompers, P., & Lerner, J. (2001). The venture capital revolution. The Journal of Economic Perspectives, 15(2), 145-168.

Harrison, R. (2013). Crowdfunding and the revitalisation of the early stage risk capital market: catalyst or chimera?. Venture capital, 15 (4), 283-287

Harrison, R. (2013). Crowdfunding and the revitalisation of the early stage risk capital market: catalyst or chimera?. Venture capital, 15 (4), 283-287.

Hellmann, T., & Puri, M. (2002). Venture capital and the professionalization of start‐up firms: Empirical evidence. The journal of finance, 57(1), 169-197.

Hellmann, T., & Thiele, V. (2015). Friends or foes? The interrelationship between angel and venture capital markets. Journal of Financial Economics, 115(3), 639-653.

Hsu, D. K., Haynie, J. M., Simmons, S. A., & McKelvie, A. (2014). What matters, matters differently: a conjoint analysis of the decision policies of angel and venture capital investors. Venture Capital, 16(1), 1-25. https://techcrunch.com/unicorn-leaderboard/exited/

Ibrahim, D. M. (2008). The (not so) puzzling behavior of angel investors. Vand. L. Rev., 61, 1405.

Kaplan, S. N., & Lerner, J. (2010). It ain't broke: The past, present, and future of venture capital. Journal of Applied Corporate Finance, 22(2), 36-47.

Kortum, S., & Lerner, J. (2001). Does venture capital spur innovation?. In Entrepreneurial inputs and outcomes: New studies of entrepreneurship in the United States (pp. 1-44). Emerald Group Publishing Limited.

Kuppuswamy, V., & Bayus, B. L. (2015). Crowdfunding creative ideas: The dynamics of project backers in Kickstarter.

Madill, J. J., Haines, Jr, G. H., & RIding, A. L. (2005). The role of angels in technology SMEs: A link to venture capital. Venture Capital, 7(2), 107-129.

Mollick, E. (2014). The dynamics of crowdfunding: An exploratory study. Journal of business venturing, 29(1), 1-16.

Nanda, R., Samila, S., & Sorenson, O. (2017). The Persistent Effect of Initial Success: Evidence from Venture Capital. Harvard Business School, Working Paper 17-065.

Ryan, P. K. (2012). How venture capital works. The Rosen Publishing Group.

Sahlman, W. A. (1990). The structure and governance of venture-capital organizations. Journal of financial economics, 27(2), 473-521.

World Economic Forum (2016). Alternative investments 2020. The Future of Capital for Entrepreneurs and SMEs.

Zider, B. (1998). How venture capital works. Harvard business review, 76(6), 131-139.

Zvilichovsky, D., Inbar, Y., & Barzilay, O. (2015). Playing both sides of the market: Success and reciprocity on crowdfunding platforms.

Journal Information

Metrics

All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 669 669 68
PDF Downloads 317 317 53