Search results for "Entrepreneurial finance"
showing 8 items of 8 documents
Testing-the-Waters Policy With Hypothetical Investment: Evidence From Equity Crowdfunding
2020
International audience; Digitization has enabled “testing-the-waters” in entrepreneurial finance whereby investors can make nonbinding commitments in equity crowdfunding prior to an actual campaign to ascertain interest in the project. We consider whether these nonbinding equity investment commitments are informative about actual investments during the campaign and, thus, ultimate startup funding success. The data indicate that only 18% of nonbinding commitments are, in fact, invested. The evidence is consistent with hypothetical bias. Hypothetical bias is significantly less pronounced among women and among investors living in higher income areas or in areas with higher levels of education.…
Availability of alternative financial resources for SMES as a critical part of the entrepreneurial eco-system: Latvia and Italy
2015
Abstract The importance of non-traditional alternative/innovative financing is gaining recognition in both developed and emerging economies throughout the world (OECD, 2012; EC, 2013; ECB, 2013; ECB, 2014). SME financing in Europe remains primarily bank based, in spite of the many policies proposed to develop alternative financing instruments (e.g. adopting directives on venture capital, improving the transparency and visibility of SMEs on capital markets, etc.) The paper aims at understanding the availability of alternative resources for SMEs by analyzing them rigorously, understanding the obstacles for the development of non-bank finance and developing recommendations to overcome them. Th…
Determinants of Individual Investment Decisions in Investment-Based Crowdfunding
2017
We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding, using a novel investment-, investor- and campaign-level database. We find that this market is a man's world, with nearly 93% of investments made by men. Consistent with behavioral and finance theories, we find that women invest less in the riskiest investments but more in safer ones. Further analyses show that these findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Investors located in an area considered more "sociable" (socially friendly) also invest more, but only if the investor is a woman. Overall, the findin…
The process of female borrower discouragement
2022
Recent entrepreneurial finance literature identifies ‘borrower discouragement’ as an important phenomenon explaining why female entrepreneurs hold less capital to grow their venture. But how do you become a discouraged borrower? We apply grounded theory to interviews with Tanzanian female entrepreneurs and model the process via which these entrepreneurs become discouraged. Our model suggests that entrepreneurs hold negative perceptions regarding loan application, allocation and payback procedures shaped by both internal and external information sources. We demonstrate that negative perceptions cause an unfavorable attitude towards formal loans which together with entrepreneurs' perceptions …
CROWDFUNDING AND INNOVATION
2018
Entrepreneurs have started relying on crowdfunding to fund their investments. This paper surveys the literature linking crowdfunding with innovation in entrepreneurial firms. Two distinct areas are discussed. First, crowdfunding has the potential to foster innovation by offering new sources of capital to innovation‐driven firms and thereby reduce the funding gap for innovative startups. Second, crowdfunding offers a way for the crowd to participate in the innovation process by providing feedback to the entrepreneur. This feedback can take various forms, including providing ideas on the development of the product during and after the campaign (in the spirit of crowdsourcing), and providing v…
Public Policy and Italian Innovative Startups Financing: Evidences from Case Studies
2015
Since more than two years innovative start up have been receiving in Italy great attention by the lawmaker; the aim is to sustain innovation ecosystem with spill-over effect on the whole economy. In this context financial sources availability plays a critical role; indeed new firms in general, and innovative more than others, complain the lack of capital to fuel their businesses. Heterogeneity of innovative start up makes very complex to address this issue and to target the goal. This research is a very first attempt to understand to what extent startup entrepreneurs have availed of the occasions offered by a recent Italian Law aiming to sustain innovative startups and what underpins their …
Investor Motivations in Investment-Based Crowdfunding
2017
International audience; We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding, using a novel investment-, investor- and campaign-level database. We find that this market is a man’s world, with nearly 93% of investments made by men. We find that women invest less in the riskiest investments but more in safer ones. These findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Investors located in an area considered more "sociable" (socially friendly) also invest more, but only if the investor is a woman. Overall, the findings contribute to our understanding of how investment…
Exploring how social interactions influence regulators and innovators: The case of regulatory sandboxes
2020
Like incubators, regulatory sandboxes constitute a prominent mechanism to enable entrepreneurial activities that guide financial technology (FinTech) firms through regulatory frameworks in the financial industry. Because they are new, there is a lack of research on regulatory sandboxes; most studies have investigated legal aspects while overlooking the management perspective. To address this gap, this paper builds on incubation research studies to explore how social interactions within regulatory sandboxes influence the practices of regulators and regulatees, using social capital theory. An exploratory-abductive approach is adopted, using data collected from 16 semi-structured interviews. T…