1st Edition

Entrepreneurial Finance

Edited By Darek Klonowski
    1706 Pages
    by Routledge

    It is axiomatic that entities which bring together the factors of production play a vital role in any national economy. But, while entrepreneurial ventures may be a source of growth and innovation, they also face many challenges. In particular, access to finance can place particular constraints on a young firm’s ability to flourish and develop. Moreover, entrepreneurial firms are often operated in a haphazard manner; their internal processes are unsystematic. Planning, forecasting, and budgeting processes are either not well developed or, in some cases, non-existent.

    Now, to help advanced students and researchers make sense of an enormous—and growing—corpus of scholarship and practical thinking on the principles that underpin entrepreneurial finance, and the many associated issues and controversies that this topic generates, Routledge announces Entrepreneurial Finance, a new addition to its acclaimed Critical Concepts in Finance series. Edited by Darek Klonowski, Professor of Business Administration at Brandon University and a private-equity professional, this four-volume set is a ‘mini library’ that brings together the foundational and the very best cutting-edge research.

    Furnished with a comprehensive introduction, newly written by the editor, which places the assembled materials in their historical and intellectual context, Entrepreneurial Finance is an essential collection, and is certain to be recognized as a vital one-stop resource.


    Entrepreneurial Finance Ecosystem

    1. Bernard S. Black and Ronald J. Gilson, ‘Venture Capital and the Structure of Capital Markets: Banks Versus Stock Markets’, Journal of Financial Economics, 1998, 47, 3, 243–77.

    2. John Armour and Douglas Cumming, ‘The Legislative Road to Silicon Valley’, Oxford Economic Papers, 2006, 58, 4, 596–635.

    3. Olav Sorenson and Toby E. Stuart, ‘Syndication Networks and the Spatial Distribution of Venture Capital Investments’, American Journal of Sociology, 2001, 106, 6, 1546–88.

    4. Gordon C. Murray, ‘Evolution and Change: An Analysis of the First Decade of the UK Venture Capital Industry’, Journal of Business Finance and Accounting, 1995, 22, 8, 1077–106.

    A Puzzle of Liquidity Constraints for Entrepreneurial Firms

    5. David S. Evans and Boyan Jovanovic, ‘An Estimated Model of Entrepreneurial Choice and Liquidity Constraints’, Journal of Political Economy, 1989, 97, 4, 808–27.

    6. Erik Hurst and Annamaria Lusardi, ‘Liquidity Constraint, Household Debt and Entrepreneurship’, Journal of Political Economy, 2004, 112, 2, 319–47.

    Entrepreneur’s Preparation for Funding

    7. Colin Mason and Matthew Stark, ‘What Do Investors Look for in a Business Plan? A Comparison of the Investment Criteria of Bankers, Venture Capitalists and Business Angels’, International Small Business Journal, 2004, 22, 3, 227–48.

    8. Oskari Lehtonen and Tom Lahti, ‘The Role of Advisors in the Venture Capital Investment Process’, Venture Capital: An International Journal of Entrepreneurial Finance, 2009, 11, 3, 229–54.

    Entrepreneur and Pursuit of Financing

    9. Albert V. Bruno and Tyzoon T. Tyebjee, ‘The Entrepreneurs Search for Capital’, Journal of Business Venturing, 1995, 1, 1, 61–74.

    10. Gavin Cassar, ‘The Financing of Business Start-ups’, Journal of Business Venturing, 2004, 19, 2, 261–83.

    11. Nancy M. Carter, Candida G. Brush, Patricia G. Greene, Elizabeth Gatewood, and Myra M. Hart, ‘Women Entrepreneurs Who Break Through to Equity Financing: The Influence of Human, Social, and Financial Capital’, Venture Capital: An International Journal of Entrepreneurial Finance, 2003, 3, 1, 2–28.

    12. Zhenyu Wu, Jess H. Chua, and James J. Chrisman, ‘Effects of Family Ownership and Management on Small Business Equity Financing’, Journal of Business Venturing, 2007, 22, 6, 875–95.


    Bootstrapping: Creative Entrepreneurial Finance

    13. Joakim Winborg and Hans Landstrom, ‘Financial Bootstrapping in Small Businesses: Examining Small Business Manager’s Resources Acquisition Behavior’, Journal of Business Venturing, 2000, 16, 3, 235–54.

    14. Jay Ebben and Alex Johnson, ‘Bootstrapping in Small Firms: An Empirical Analysis of Change Over Time’, Journal of Business Venturing, 2006, 21, 6, 851–65.

    15. Richard T. Harrison, Colin M. Mason and Paul Girling, ‘Financial Bootstrapping and Venture Development in the Software Industry’, Entrepreneurship & Regional Development, 2004, 16, 4, 307–33.

    16. Tom Vanacker, Sophie Manigart, Miguel Meuleman, and Luc Sels, ‘A Longitudinal Study on the Relationship Between Financial Bootstrapping and New Venture Growth’, Entrepreneurship & Regional Development, 2011, 23, 9–10, 681–705.

    Angel Investors: Non-Institutional Entrepreneurial Finance

    17. Lisa Feeney, George H. Haines, and Allan L. Riding, ‘Private Investors’ Investment Criteria: Insights from Qualitative Data’, Venture Capital: An International Journal of Entrepreneurial Finance, 1999, 1, 2, 121–45.

    18. Diamanto Politis, ‘Business Angels and Value Added: What Do We Know and Where Do We Go?’, Venture Capital: An International Journal of Entrepreneurial Finance, 2008, 10, 2, 127–47.

    19. Peter Kelly and Michael Hay, ‘Business Angel Contracts: The Influence of Context’, Venture Capital: An International Journal of Entrepreneurial Finance, 2003, 5, 4, 287–312.

    20. Colin M. Mason and Richard T. Harrison, ‘Is It Worth It? The Rates of Return from Informal Venture Capital Investments’, Journal of Business Venturing, 2002, 17, 3, 211–36.

    21. William R. Kerr, Josh Lerner, and Antoinette Schoar, ‘The Consequences of Entrepreneurial Finance: Evidence from Angel Financing’, Review of Financial Studies (forthcoming).

    Debt Financing, Capital Structure, and Relationship Lending

    22. Alicia M. Robb and David T. Robinson, ‘The Capital Structure Decisions of New Firms’, Review of Financial Studies (forthcoming).

    23. Allen N. Berger and Gregory T. Udell, ‘Relationship Lending and Lines of Credit in Small Firm Finance’, Journal of Business, 1995, 68, 3, 351–81.

    24. Massimo G. Colombo and Luca Grilli, ‘Funding Gaps? Access to Banks Loans by High-tech Start-ups’, Small Business Economics, 2007, 29, 1/2, 25–46.

    Alternative Types of Entrepreneurial Finance: From Government Funding to Crowdfunding

    25. Josh Lerner, ‘Government as Venture Capitalist: The Long-run Impact of the SBIR Program’, Journal of Business, 1999, 72, 3, 193–235.

    26. Gary Dushnitsky and Michael J. Lennox, ‘When do Incumbents Learn from Entrepreneurial Ventures? Corporate Venture Capital and Investing Firm Innovation Rates’, Research Policy, 2005, 34, 5, 615–39.

    27. Lloyd Steier, ‘Variants of Agency Contracts in Family-Financed Ventures as a Continuum of Familial Altruistic and Market Rationalities’, Journal of Business Venturing, 2003, 18, 5, 597–618.

    28. Paul Belleflamme, Thomas Lambert and Armin Schwienbacher, ‘Individual Crowdfunding Practices’, Venture Capital: An International Journal of Entrepreneurial Finance (forthcoming).


    Venture Capital and its Impact

    29. Michael Gorman and William A. Sahlman, ‘What do Venture Capitalists do?’, Journal of Business Venturing, 1989, 4, 4, 231–48.

    30. Sampsa Samila and Olav Sorenson, ‘Venture Capital, Entrepreneurship and Economic Growth’, Review of Economics and Statistics, 2011, 93, 1, 338–49.

    31. Samuel Kortum and Josh Lerner, ‘Assessing the Impact of Venture Capital on Innovation’, RAND Journal of Economics, 2000, 31, 4, 674–92.

    32. Thomas Hellman and Manju Puri, ‘The Interaction Between Product Market and Financing Strategy: The Role of Venture Capital’, Review of Financial Studies, 2000, 13, 4, 959–84.

    Venture Capital Firms: Organization, Economics, and Investment Process

    33. Andrew Metrick and Ayako Yasuda, ‘The Economics of Private Equity Funds’, Review of Financial Studies, 2010, 23, 6, 2303–41.

    34. Tyzoon T. Tyebjee and Albert V. Bruno, ‘A Model of Venture Capitalists Investment Activity’, Management Science, 1984, 30, 9, 1051–66.

    35. Ian C. MacMillan, Robin Siegel, and P. N. Subba Narasimha, ‘Criteria Used by Venture Capitalists to Evaluate New Venture Proposals’, Journal of Business Venturing, 1985, 1, 1, 119–28.

    Financial Contracting in Venture Capital: Theoretical and Empirical Considerations

    36. Thomas Hellmann, ‘IPOs, Acquisitions, and the Use of Convertible Securities in Venture Capital’, Journal of Financial Economics, 2006, 81, 3, 649–79.

    37. Catherine Casamatta, ‘Financing and Aadvising: Optimal Financial Contracts with Venture Capitalists’, Journal of Finance, 2003, 58, 3, 2059–85.

    38. Steven N. Kaplan and Per Stromberg, ‘Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts’, Review of Economic Studies, 2003, 70, 2, 281–315.

    Entrepreneur-Venture Capitalist Interaction: Activism and Value-Added

    39. JoshLerner, ‘Venture Capitalists and the Oversight of Private Firms’, Journal of Finance, 1995, 50, 1, 301–18.

    40. Thomas Hellmann and Manju Puri, ‘Venture Capital and the Professionalization of Start-ups Firms: Empirical Evidence’, Journal of Finance, 2002, 57, 1, 169–97.

    41. Thomas J. Chemmanur, Karthik Krishnan, and Debarshi K. Nandy, ‘How Does Venture Capital Financing Improve Efficiency in Private Firms? A Look Beneath the Surface’, Review of Financial Studies, 2011, 24, 12, 4037–90.

    42. Dean A. Shepherd and Andrew Zacharakis, ‘The Venture Capitalist-Entrepreneur Relationship: Control, Trust and Confidence in Co-operative Behavior’, Venture Capital: An International Journal of Entrepreneurial Finance, 2001, 3, 2, 129–49.


    Venture Capital Returns

    43. Steven N. Kaplan and Antoinette Schoar, ‘Private Equity Performance: Returns, Persistence, and Capital Flows’, Journal of Finance, 2005, 60, 4, 1791–823.

    44. Josh Lerner, Antoinette Schoar and Wan Wongsunwai, ‘Smart Institutions, Foolish Choices: The Limited Partner Performance Puzzle’, Journal of Finance, 2007, 62, 2, 731–64.

    45. Douglas Cumming and Uwe Walz, ‘Private Equity Returns and Disclosure Around the World’, Journal of International Business Studies, 2010, 41, 4, 727–54.


    46. Joshua Lerner, ‘Venture Capitalists and the Decision to Go Public’, Journal of Financial Economics, 1994, 35, 3, 293–316.

    47. William L. Megginson and Kathleen A. Weiss, ‘Venture Capital Certification in Initial Public Offerings’, Journal of Finance, 1991, 46, 3, 879–903.

    48. Paul Gompers, ‘Grandstanding in the Venture Capital Industry’, Journal of Financial Economics, 1996, 42, 1, 133–56.

    49. Alon Brav and Paul Gompers, ‘Myth or Reality? The Long-Run Underperformance of Initial Public Offerings: Evidence from Venture- and Non-Venture-Capital-Backed Companies’, Journal of Finance, 1997, 52, 5, 1791–821.

    50. Douglas Cumming, ‘Contracts and Exits in Venture Capital Finance’, Review of Financial Studies, 2008, 21, 5, 1948–82.

    Perpetuation in Entrepreneurial Finance

    51. Paul Gompers, Anna Kovner, Josh Lerner, and David Scharfstein, ‘Performance Persistence in Entrepreneurship?’, Journal of Financial Economics, 2010, 96, 1, 18–32.

    52. Colin M. Mason and Richard T. Harrison, ‘After the Exit: Acquisitions, Entrepreneurial Recycling and Regional Economic Development’, Regional Studies, 2006, 40, 1, 55–73.

    53. Charles Harvey, Mairi Maclean, Jillian Gordon, and Eleanor Shaw, ‘Andrew Carnegie and the Foundation of Contemporary Entrepreneurial Philanthropy’, Business History, 2011, 53, 3, 425–50.


    Edited and with a new introduction by Darek Klonowski, Professor of Business Administration, Brandon University, Canada