Entrepreneurial finance: new frontiers of research and practice

Abstract

The proliferation of new sources of entrepreneurial finance potentially makes it easier for ventures to raise capital and grow. To date, entrepreneurial finance literature has developed a rich tradition of research on venture capital and angel finance. However, the emergence of "new" sources of finance, such as crowdfunding and the limited attention paid to "traditional" debt financing and financial bootstrapping, offers opportunities to explore, from different points of view and theoretical perspectives, the challenges that ventures face. The objective of this Special Issue is to explore these new and traditional sources of finance and suggest how these phenomena can extend entrepreneurial finance literature and guide new theory building. This paper outlines the new sources of entrepreneurial finance, and in comparing them with more traditional sources, we propose theoretical and empirical challenges that these new and traditional sources present to entrepreneurship scholars. We also provide a brief summary of papers in the Special Issue and outline promising avenues for future research.

Working the crowd: Improvisational entrepreneurship and equity crowdfunding in nascent entrepreneurial ventures

“…2 In contrast to this definition stressing the role of small or retail investors, it is important to note that crowd-investors encompass non-specialist, professional and institutionally based actors (Nesta, 2016;Wright et al, 2015b). Therefore, we propose the following definition of equity crowdfunding as "a funding process whereby entrepreneurs sell an equity stake in their venture 1 In contrast, with a few exceptions (Lin and Viswanathan, 2015) researchers have tended to overlook debt-based or lending-crowdfunding models despite being the biggest part of the crowdfunding market (Bellavitis et al, 2017). 2 This definition seems somewhat misleading because technically "bonds" are a form of long-term debt in which the issuing company promises to pay the principal amount at a specified end date.…”

“…In recent years, it has become firmly established as a key alternative financial instrument for new ventures (Moritz et al, 2015;Block et al, 2016), allowing entrepreneurs to tap the crowd instead of relying on banks or other specialised investors (Belleflamme et al, 2014). Accordingly, it "represents a potentially disruptive change in the way that new ventures are funded" (Mollick, 2014, p. 14), with the potential to radically transform the market for entrepreneurial finance (Cordova et al, 2015;Bellavitis et al, 2017).…”

Quo Vadis? – innovative and alternative sources of financing

“…Jak twierdzi Bellavitis ze swoim zespołem (Bellavitis, Filatotchev, Kamuriwo, Vanacker, 2017) koncepcja cyklu finansowania przedsiębiorstwa powinna obecnie zostać ponownie przemyślana w kontekście dokonujących się zmian. Nowo powstające źródła finansowania, przy swoich wadach i zaletach, po pierwsze mogą być stosowane w różnych momentach cyklu rozwoju przedsiębiorstwa.…”

Does Love Money Affect Vocational Behavior? Empirical Evidence from Italian Entrepreneurs

“…In reference to the influence that external factors can have on entrepreneurs, a topic that still seems to be underexplored concerns the impact that love money -briefly defined here as the financial resources provided by family, friends, and fools (Ang, 1991(Ang, , 1992Brinlee et al, 2004;Austin et al, 2006;Kotha & George, 2012;Frid, 2014;Au et al, 2016;Bellavitis et al, 2017;Sieger & Minola, 2017) -can have on vocational behavior.…”