The role of venture capital in the development of the SME sector

Abstract

Abstract:Entrepreneurs as well as SMEs, regularly face the problem concerning access to finance. Entrepreneurial firms face two major problems. The first concerns access to finance, which places particular restraint on a firm's ability to increase the level of technology in their business. The second problem is access to know-how. The subject of this survey is the role of venture capital funds in the development of newly established companies and its potential application in the Republic of Srpska. In the Anglo-Saxon countries, newly emerged enterprises that start their business from scratch are called start-up companies. The assumption that venture capital financing can give newly established companies bigger chances of succeeding in their start-up stage is made. It is known that our companies provide capital through bank loans which have lately become less available especially to early stage businesses. Therefore, in order for companies to achieve their goals and develop their projects they must finance their business through venture capital funds that are willing to invest in start-up companies.

Financing Small and Medium-Sized Enterprises and Enhancing Quality: Private Equity Insights

“…This resource is still underrepresented in Europe (Rupeika-Apoga and Danovi, 2015; Abbasi et al, 2017). Venture capitalists are investors who tend to invest in startup companies in developing markets (Djalic et al, 2017;Rupeika-Apoga, 2014). Interestingly, apart from the majority of other financing sources, they tend to influence decision making process and business development planning.…”

“…Interestingly, apart from the majority of other financing sources, they tend to influence decision making process and business development planning. As this method of financing is related to high risk investments, it also aims to achieve high profits (Djalic et al, 2017). Although SMEs represent an economic engine of many countries, they still encounter many challenges obtaining financing.…”

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“…Đalić Irena et al (2017), comentan en su publicación sobre la investigación realizada en los países anglosajones, que tanto los empresarios como las PYME se enfrentan habitualmente al problema del acceso a la financiación. Las empresas emprendedoras se enfrentan a dos problemas importantes.…”

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