General Business Resource Materials

Entrepreneurship Law Editorial Team


Philip J. Adelman & Alan M. Marks, Entrepreneurial Finance (6th ed. 2013).

Abstract (from publisher): For many, starting a business can be an overwhelming experience. Understanding the financial aspects of running a business can be even more daunting. Entrepreneurial Finance, Sixth Edition was written to help a broad range of U.S. business owners understand the financial aspects of entrepreneurship. Unlike traditional corporate finance books, this text explains the financial topics most important to running a profitable small business such as inventory control, time value of money, working capital management, and forecasting. Updated to reflect recent economic trends, this edition also shows how two popular business tools (excel and TI BA II Plus calculator) can assist business owners in problem-solving and decision-making.

Judith Albers & Thomas R. Moebus, Entrepreneurship in New York: The Mismatch between Venture Capital and Academic R&D (2014).

Abstract (from  The Entrepreneurship in New York study is a joint venture of the SUNY Levin Institute, the Research Foundation of SUNY, and SUNY Geneseo. This study shows that New York now commands a larger share of national venture investment than in past studies. Although, within this picture a significant disconnect is revealed. New York’s strong performance in academic R&D in the sciences stands in contrast with the relatively modest amounts of private investment available to move these innovations forward commercially. In 2012, 85% of the venture capital invested in New York State firms was invested in information technology and creative and commerce services, while 15% was invested in the life and physical sciences. By contrast, 89% of academic R&D expenditures in New York State were in the life and physical sciences, with only small amounts invested in IT.


Abstract (from publisher):  This book is a comprehensive look at dozens of options for financing a new or growing company. It discusses how to obtain financing through each route and the benefits of each method.

Ralph Alterowitz & John Zonderman, FINANCING YOUR BUSINESS MADE EASY (2007).

Abstract (from publisher):  Financing Your Business Made Easy offers myriad ideas to get financing. The authors discuss the benefits and pitfalls of borrowing from family and friends, with tips on how to keep business relationships separate from personal ones. Dozens of government loan sources are explained in detail. Drawing on their insider knowledge of venture capital firms and angel investors, the authors reveal how to maximize your chances of success. Plus, they provide innovative financing ideas, such as borrowing from suppliers and customers, taking advantage of credit cards, and raising money from employees.

David B. Audretsch & Albert N. Link, Valuing an Entrepreneurial Enterprise (2012).

Abstract (adapted from publisher): Entrepreneurs generally lack the marketing capabilities necessary to bring their new product to market. To engage the resources required to do this, they must somehow place a value on the enterprise. However, all of the methods of valuation currently available are based on the use of historical or current revenues, and therefore are not applicable to an entrepreneurial enterprise with a first-time product. In Valuing an Entrepreneurial Enterprise, Audretsch and Link present a valuation method uniquely tailored to emerging technology-based ventures that have no revenue history to lean on. Unlike many traditional methods, theirs does not take into account the track record of companies and products similar to that being valuated. Instead, it draws on economic theory to formulate a solution to the problem. The book develops conceptual ground, including trends in entrepreneurship, models of innovation, and the economics of standards and entrepreneurship policy. The authors review the traditional valuation methods and illustrate them numerically with case studies to show how the traditional approach produces an incorrect valuation. The core of the book presents the new methodology and demonstrates how it avoids the pitfalls of past approaches. The authors also show how public policy on technology and infrastructure changes valuations of start-up firms in areas such as stem-cell products and renewable fuels projects.  

Gerald W. Barney, Street-Smart Guide to Valuing Business Investments: A Practical Guide to Value for Business Owners, Entrepreneurs, Angel Investors, VC Investors, and Business Buyers (2013).

Abstract (from publisher): This book cuts through the mystery of business valuation, and provides practical advice to business owners, investors, entrepreneurs and business buyers. The author and his partners have approximately a combined 200 years of experience in dealing with business valuation issues, both for the tax-related, and investment-oriented purposes as well as many years of entrepreneurial management experience. It deals extensively with valuation of start-ups and emerging companies with an orientation toward angel investors and Venture Capital. But it also of equal value to one who wants to buy or sell a business. It covers other related aspects such as Intellectual Property, ESOPs, 401k equity investments, and problem solving in the transaction phase. It contains Street-Smart Tip boxes which will help the reader to focus on key advice. In short -- it is a "must have" book for virtually everyone dealing in the arena of privately held businesses, and those who would like to go public.

Ian R. Campbell & Howard E. Johnson, THE VALUATION OF BUSINESS INTERESTS (2001).

Abstract (from product description at A comprehensive resource for valuation practitioners, financial advisors, financial officers and others involved in business valuations, acquisitions and divestitures.

William H. Draper, The Startup Game: Inside the Partnership between Venture Capitalists and Entrepreneurs (2011).

Abstract (adapted from Entrepreneurs drive the future, and the last several decades have been a thrilling ride of astounding, far-reaching innovation. Behind this transformative progress are also the venture capitalists—who are at once the investors, coaches and allies of the entrepreneurs. William H. Draper III knows this story first-hand, because as a venture capitalist, he helped write it.  For more than 40 years, Bill Draper has worked with top entrepreneurs in fabled Silicon Valley, where today’s vision is made into tomorrow’s reality.

From a venture capitalist who saw the potential of Skype, Apollo Computer, Hotmail, OpenTable, and many other companies, comes firsthand stories of success. In these pages, Draper explores how to evaluate innovative ideas and the entrepreneurs behind those ideas, and he shares lessons from Yahoo, Zappos, Baidu, Tesla Motors, Activision, Measurex, and more. Also, in revealing his on-the-ground account of how Deng Xiaoping brought China roaring into the modern world and how Manmohan Singh unlocked the creative genius of Indian entrepreneurs, Draper stresses the essential value of farsighted political leadership in creating opportunity.

Entrepreneurship, Finance, Governance & Ethics (Robert Cressy et al. eds. 2013).

Abstract (from publisher): This book spans topics at the intersection of business ethics and governance as they pertain to entrepreneurship and finance. To the Editors’ knowledge it is the first collection of papers linking entrepreneurship and finance to governance and business ethics, rather than exploring these issues separately. The chapters identify empirically the strong interplay between ethics in organizational efficiency and financial activity, and the role of legal settings and governance in facilitating better ethical standards. The chapters explore novel and timely topics, particularly in the context of the recent financial crisis and the subsequent debate over regulating unethical behavior. This book finally encourages future scholars to investigate the role of law and governance in mitigating corruption and fostering integrity in the fields of entrepreneurship and finance.

FINANCING ECONOMIC DEVELOPMENT IN THE 21ST CENTURY (Sammis B. White, Robert D. Bingham & Edward W. Hill eds., 2003).

Abstract (from product description at   This book offers a comprehensive survey of the major mechanisms for financing economic development today. It explores the details of all the standard developmental tools, such as Tax Incremental Finance districts, angel and venture capital, and tax abatements, as well as newer tools that have proven effective, including micro-enterprise lending, stadium financing, brownfield financing, and revolving loan funds. Tools for rural development finance are also covered, and in addition to describing the various programs and providing examples of how they work, the book also evaluates their relative effectiveness.

David Frodsham & Heinrich Liechtenstein, Getting Between the Sheets: The Four Things Every Entrepreneur Should Know about Finance (2011).

Abstract (adapted from For many entrepreneurs there is a mystique about finance -starting, growing and selling new ventures is tough enough. Yet with some focused financial knowledge you can run your company with less cash, grow it more quickly and make more money when it is sold. This book makes the dry world of finance easy to understand and relevant to entrepreneurs.

David Alan Grier, Crowdsourcing for Dummies (2013).

Abstract (adapted from publisher): This book will teach you to Plan and launch your crowdsourcing project; find the right platform for your needs; promote your project and attract the right audience; manage and motivate your crowd to get the best results; and learn how to harness people power. In Crowdsourcing For Dummies, David Alan Grier demonstrates how you can tap into the power of the crowd. Discover how to use crowdsourcing to solve complex business problems and complete difficult tasks, supercharge innovation and new product development, build brand identity and boost productivity and profits.


Product Description (from Amazon):  Working from a unique standpoint and challenging the orthodoxy on entrepreneurship this book explores the possibilities of entrepreneurship in organizations and entrepreneurship in organization creation whilst re-anchoring entrepreneurship within a broader disciplinary approach.

Chris Hurn, The Entrepreneur’s Secret to Creating Wealth: How the Smartest Business Owners Build Their Fortunes (2012).

Abstract (from publisher): An often overlooked secret to creating wealth as a business owner has little to do with actually running the business. Marketing, customer service, quality products, and more are required to make a business successful...but when it comes to creating real and lasting wealth, there's a secret formula that all business owners have access to but not all realize. As both a small business lender and a small business owner himself, Chris Hurn has a bird's eye view of how businesses create wealth, as well as an in-the-trenches perspective on the habits and thought processes of successful entrepreneurs.  In The Entrepreneur's Secret to Creating Wealth, Chris unlocks the secret of how small business owners can create wealth and explains the myriad decisions that must be made along the way. Plenty of books describe how entrepreneurs can generate new ideas or keep employees happy. But no other business book outlines in such detail -- or with such authority -- how to actually develop the wealth behind the business.


Abstract (from publisher):  Kirchhoff blends economics, business, and government policy to demonstrate that entrepreneurship's role in business formation and growth energizes and maintains the viability of capitalism. Entrepreneurs convert new ideas into marketable products and services and use these to grab market shares from older, established firms. This process not only produces economic growth, but also redistributes resources so as to assure equitable distribution within society. Acknowledging that this perception is descriptive but lacks predictive power, Kirchhoff offers a typology to assist in predictive theory building and to guide government policy development.

J. Chris Leach & Ronald W. Melicher, Entrepreneurial Finance (4th ed. 2012).

Abstract (adapted from publisher): This accessible, reader-friendly textbook closely follows a “life cycle of the firm” approach as it introduces the theories, knowledge, and financial tools an entrepreneur needs to start, build, and eventually harvest a successful venture. This edition focuses on sound financial management practices, showing students how and where to obtain the financial capital necessary to run and grow a venture. This edition explores the most important financial issues that entrepreneurs face, particularly the stages of financing, business cash flow models, and strategic positioning of the early-stage company. A new capstone case and updated mini-cases, as well as engaging entrepreneurial ventures lifted from the latest headlines keep readers involved and learning as they examine concepts such as venture capital funds, institutional investors, and strategic alliances. This edition also provides readers with a thorough understanding of the role of business angels, licensing agreements, and exit strategies.


Abstract (from publisher):  Securing adequate funding for a business venture can be one of the most difficult obstacles faced by entrepreneurs. This resource instructs readers on the best ways to raise money for growing or starting a small business by discussing each source of public and private debt and equity capital, from bootstrapping and IPOs to commercial loans and SBA-guaranteed programs. Covered are methods for determining how much capital is needed, planning successful applications and presentations, and choosing an appropriate source and type of financing. Sample forms are integrated into the text to facilitate learning the details and data-gathering skills needed for the financing process.

Deborah M. Markley & Katharine McKee, BUSINESS FINANCE AS A TOOL FOR DEVELOPMENT(1992).

Abstract:   Reviews finance strategies for starting businesses using a community economic development approach.

Marc H. Meyer & Frederick G. Crane, Entrepreneurship: An Innovator’s guide to Startups and Corporate Ventures (2011).

Abstract (adapted from This text helps student entrepreneurs succeed in the modern arena, in which new technology-intensive products and services are the engines of venture creation and economic growth. It shows students how to understand their industry dynamics and customer needs, test their venture idea in the market and with target customers, and write a successful business plan for a startup or a corporate venture. The authors use clear frameworks and systematic methods that are based on the decades of experience, not just in the classroom, but from starting, advising, and helping to manage successful ventures.


Abstract (from product description at  This book provides pragmatic advice from entrepreneurs who have raised money from friends, family, angel investors, and banks, as well as institutional investors such as venture capitalists and private equity firms. It details the process from start to finish while spotlighting the danger spots and ways to avoid them. It will be especially useful to those who are uncomfortable making important financial decisions, and to those who are confused by all the conflicting opinions offered by advisors—both well meaning and otherwise. By showing readers the financing ropes, the author removes a major source of stress for budding entrepreneurs and moves them closer to their dream come true: a successful business.


Abstract (from publisher):   Analyzing the field of community development banking, Parzen and Kieschnick explain how financial institutions can serve the economic development needs of communities in which they operate without sacrificing prudent banking practices. Relying on firsthand knowledge, the authors show why development banks are worthy of the attention of community development activists, financial institutions that want to improve their performance, and policymakers trying to fix the financial system. The authors describe the successes of a number of community development banks, such as South Shore Bank in Chicago, Northern Community Investment Corporation in Vermont, and Self Help Credit Union in North Carolina.  Parzen and Kieschnick explore the factors that contribute to or limit development bank effectiveness, and they focus on how banks come to terms with conflicts between serving their markets and surviving. They offer a plan for achieving the full economic development potential of development banking, including specific steps for development bankers, mainstream financial institution, government agencies, and foundations.

Stephen Pollan, HOW TO BORROW MONEY (1983).


Abstract (from product description at  There is often more money in dispute in determining the discounts and premiums in a business valuation than in arriving at the pre-discount value itself. Discounts and premiums affect not only the value of the company, but also play a crucial role in determining the risk involved, control issues, marketability, and contingent liability, to name a few. 


Abstract (from product description at  This edition is updated with new legal, financial, and compliance material, the Fifth Edition of Valuing a Business presents detailed answers tomany valuation questions ranging from executive compensation and lost profits analysis to ESOP issues and valuation discounts.


Abstract (from product description at  This book is a practical road map offering methods for keeping firm financial control of the enterprise while avoiding common financial barriers.  It covers, among other things: the dual objectives of a business plan and how to ensure that both are fulfilled; differences between debt and equity financing and how and why to use each; real-world methods for structuring a deal to benefit both the financier and the entrepreneur; valuation techniques for understanding what your business is truly worth; and essential resources for finding the detailed information you need.

Neil Senturia, I'm There for You, Baby: the Entrepreneur's Guide to the Galaxy (2011).

Abstract (from Success, failure, joy, pain, and rejection. Neil Senturia shares the ups and downs of his entrepreneurial life and how the lessons learned along his journey can be applied to all of our lives. The book reads like Neil talks (with the occasional four letter word!) so be prepared for a humorous and insightful read. Two hundred and twenty three of his Baby Rules are included here.

Janet Kiholm Smith et al., Entrepreneurial Finance: Strategy, Valuation, and Deal Structure (2011).

Abstract (adapted from This book applies the theory and methods of finance and economics to the rapidly evolving field of entrepreneurial finance. This approach reveals how entrepreneurs, venture capitalists, and outside investors can rely on academic foundations as a framework to guide decision making.

This book prepares readers for a wide variety of situations and problems that stakeholders might confront in an entrepreneurial venture. The authors specifically address the influences of risk and uncertainty on new venture success, devoting substantial attention to methods of financial modeling and contract design. Finally, the authors provide a comprehensive survey of approaches to new venture valuation, with an emphasis on applications.

Entrepreneurial Finance is most effectively used in conjunction with a companion website, . On this site, Venture.Sim simulation software, spreadsheets, templates, simulation applications, interactive cases, and tutorials will be available for download. For those teaching from the book, the authors also provide an invaluable suite of instructor's resources.

Dan Steiner, Kickstarter Handbook: Real- Life Success Stores of Artists, Inventors, and Entrepreneurs (2012).

Abstract (adapted from publisher): So you want to produce a short film. Or design a new line of jewelry. Or manufacture a revolutionary solar-powered garden sprinkler. There’s just one catch: You need $100,000 to bankroll your dream, and your checking account has barely enough to cover the rent. Enter—the phenomenal “crowdfunding” website launched in 2009 that brings venture capital to the masses. At Kickstarter, it’s not uncommon for entrepreneurs to raise $50,000, $100,000, $250,000, or more. All you need is a great idea—and The Kickstarter Handbook. Business journalist Don Steinberg has interviewed dozens of artists and inventors who launched their passion projects online. Through their voices, you’ll explore all the strategies of a successful Kickstarter campaign. You’ll learn the elements of a compelling Kickstarter video, innovative ways to market your projects, tips for getting donors onboard, and the secrets of irresistible Kickstarter “rewards.” You’ll also discover what to do in a best-case scenario—when your project goes viral and the cash starts flowing in. On Kickstarter, it happens to a few lucky visionaries every week. Here’s how to be one of them.


Abstract (from publisher):   This is the entrepreneur's guide to money - where to find what you need to build your business, how to value the business you build, and more America is the land of the entrepreneur. We lead the industrialized world in people who pursue their own businesses, and build their own dreams. Yet for too many this dream becomes a nightmare, a never-ending cycle of scrambling for financial resources as customers and growth fly out the door to their competitors. "How to Raise Capital" provides a battle-tested, step-by-step plan you can follow to create the financial foundations necessary for long-term success. Drawing on the authors' unmatched experience in the start-up trenches, along with literally dozens of high-profile, real-life examples of entrepreneurial success and failure, this straight-talking book will show you how to: locate and negotiate with the funding resources that are right for you, from SBA lenders to angel investors; and, anticipate and overcome the four key mistakes that stifle small business growth.

Elizabeth U, Raising Dough: The Complete Guide to Financing a Socially Responsible Food Business (2013).

Abstract (from publisher): More and more entrepreneurs are using food-based businesses to solve social and environmental problems - and yet the majority of them report that a lack of access to capital prevents them from launching, maintaining, or growing their ventures. Raising Dough is an unprecedented guide to the full range of financing options available to support sustainable food businesses.

Raising Dough provides valuable insights into the world of finance, including descriptions of various capital options, including traditional debt and equity, government grant and loan programs, and cutting-edge models such as crowdfunding and community-based alternatives; guiding questions to help determine which capital options are the most appropriate given the size, stage, entity type, growth plans, mission, and values of an enterprise; case studies and testimonials highlighting the experiences of food system entrepreneurs who have been there before, including both success stories and cautionary tales; and referrals to sources of capital, financiers, investor networks, and other financial resources. Written primarily for people managing socially responsible food businesses, the resources and tips covered in this book will benefit social entrepreneurs - and their investors - working in any sector.

John B. Vinturella & Suzanne M. Erickson, Raising Entrepreneurial Capital (2nd ed. 2013).

Abstract (from publisher): Raising Entrepreneurial Capital guides the reader through the stages of successfully financing a business. The book proceeds from a basic level of business knowledge, assuming that the reader understands simple financial statements, has selected a specific business, and knows how to write a business plan. It provides a broad summary of the subjects that people typically research, such as "How should your company position itself to attract private equity investment?" and "What steps can you take to improve your company's marketability?" Much has changed since the book was first published, and this second edition places effects of the global recession in the context of entrepreneurship, including the debt vs. equity decision, the options available to smaller businesses, and the considerations that lead to rapid growth, including venture capital, IPOs, angels, and incubators. Unlike other books of the genre, Raising Entrepreneurial Capital includes several chapters on worldwide variations in forms and availability of pre-seed capital, incubators, and the business plans they create, with case studies from Europe, Latin America, and the Pacific Rim.

Rassoul Yazdipour, Advances in Entrepreneurial Finance: with Applications from Behavioral Finance and Economics (2011).

Abstract (adapted from Advances in Entrepreneurial Finance brings together contributions from researchers from the fields of entrepreneurship, behavioral finance, psychology, and neuroscience to shed new light on the dynamics of decision making and risk taking by entrepreneurs and venture capitalists (VCs). Every new venture requires access to capital at competitive interest rates, and much has been written on general entrepreneurship by management scholars and financial contracting by financial economists using traditional finance theory with all its highly restrictive assumptions regarding decision makers’ cognitive capabilities and behavior. But recent developments in behavioral finance can now be applied to understand how entrepreneurs and VCs perceive risk and uncertainty and how they decide and act accordingly. Showcasing the latest research, this volume demonstrates that findings from the behavioral and neuroscience arenas can and do explain decision making by entrepreneurs and venture investors in the real world. Consequently, such findings have practical implications not only for entrepreneurs, venture capitalists, and their advisors, but also all government agencies and NGOs that want to support product and technological innovation, capital formation, job creation, and economic development.

Andrew L. Zacharakis, Building Your Pro Forma Financial Statements in The Portable MBA in Entrepreneurship, 141-166 (3rd ed., William D. Bygrave & Andrew L. Zacharakis, eds., 2004.)

Abstract:   This book covers all angles of setting up your own business, from spotting market opportunities to protecting intellectual property.


Gordon K. Adomdza & Thomas B. Astebro, The Effect of Entrepreneurial Cognition on Investments for Commercialization Success (2012), available at

Abstract (from author): Entrepreneurs’ cognitions may affect performance directly but also indirectly through their effects on own as well as others’ investment. The authors study the effects of planning fallacy, optimism, and overconfidence on commercialization investments and success. Optimism directly increased commercialization success. The effect of planning fallacy on commercialization success was mediated by the entrepreneur’s own as well as others’ investments. Strong ties were more likely to supply funds with increased planning fallacy and optimism, while weak ties were less likely to supply funds with increased planning fallacy and optimism. Overconfidence was not of importance in this study. The results show the need to study the effects of entrepreneurs’ cognitions on different stakeholders’ perceptions of the entrepreneur in the entrepreneurial process.

Bernrdao Balboni, Ulpiana Kocollari & Ivana Pais, How Can Social Enterprises Develop Successful Crowdfunding Campaigns? An Empirical Analysis on Italian Context (2014),

Abstract (from authors): Crowdfunding has been recognized by media narrations as a disruptive approach to funding social entrepreneurship while there is a lack of evidence in academic literature about those factors that are able to support social entrepreneurs in developing successful CrowdFunding (CF) campaigns. This paper is aimed to improve academic knowledge on those elements that can effectively support social entrepreneurs in managing their campaigns. An empirical analysis on 250 CF campaigns launched by Italian social enterprises was carried out. We focus on the effect on the overall funding level achieved of three main types of issues: the social enterprise’s network, the choice of CF platform, and the CF campaign’s design. Our results show how the social enterprise’s presence on Twitter, the choice of a specific reward-based platform, and an active management of the CF campaign have a significant impact on the achievement of the funding goal. 

Amitrajeet A. Batabyal, Project Financing, Entrepreneurial Activity, and Investment in the Presence of Asymmetric Information (RIT Economics Department Working Paper No. 11-07, 2011), available at

Abstract (from author): The authors analyze a two-period signaling model in which a representative entrepreneur in a regional economy has a project that generates a random cash flow and that requires investment that the entrepreneur raises from a competitive market. The project’s type is known to the entrepreneur but not to the investors. Further, the entrepreneur is restricted to issuing debt only or equity only. The authors first show that there is no separating perfect Bayesian equilibrium (PBE) contract involving the issuance of equity only, that there exists a pooling PBE contract involving the issuance of equity only, and that a debt contract is preferred to an equity contract by the entrepreneur. Next, they suppose that the entrepreneur incurs a non-pecuniary cost of financial distress F>0 whenever he is unable to make a repayment at time t=1. The authors provide conditions on F under which a pooling PBE contract with debt exists and a separating PBE contract with debt and equity exists. Finally, the authors examine whether a high type entrepreneur will prefer a setting with a cost of financial distress (F>0) or a setting in which there is no such cost (F=0).

Bat Batjargal et al., Institutional Polycentrism, Entrepreneurs’ Social Networks, and New Venture Growth (William Davidson Institute, Working Paper No. 1060, 2013), available at

Abstract (from authors): What is the interrelationship among formal institutions, social networks, and new venture growth? Drawing on the theory of institutional polycentrism and social network theory, we examine this question using data on 637 entrepreneurs from four different countries. We find the confluence of weak and inefficient formal institutions to be associated with a larger number of structural holes in the entrepreneurial social networks. While the effect of this institutional order on the revenue growth of new ventures is negative, a network’s structural holes have a positive effect on the revenue growth. Furthermore, the positive effect of structural holes on the revenue growth is stronger in an environment with a more adverse institutional order (i.e., weaker and more inefficient institutions). The contributions and implications of these findings are discussed.

K. A. Bauer, Buying and Selling a High-Tech Business, 29 Managing Intell. Prop. 19-24 (1993).

Albert V. Bruno & Tyzoon T. Tyebjee, The Entrepreneur's Search for Capital, 1(1) J. Bus. Venturing 61-74 (1985).

Abstract:   Provides information on the factors considered by entrepreneurs in search of risk capital. Discussion on the financing of new businesses; Details of venture capital; Analysis of risk capital.

Rodrigo Canales, From Ideals to Institutions: Institutional Entrepreneurship in Mexican Small Business Finance (2011), available at

Abstract: This paper analyzes the creation of the market for small business credit in Mexico, which presents a rare opportunity to explore the mechanisms of institutional entrepreneurship. The paper analyzes successful and unsuccessful attempts to activate small business lending to determine the organizational, structural, and personal aspects that allowed certain groups of individuals and not others to succeed. The paper proposes that, contrary to conventional thought, institutional change is not rare because institutional entrepreneurs are scarce. In fact, they are quite prevalent. What keeps most institutional entrepreneurs hidden from view is preference falsification, or the distinction that institutions function through the coordination of common beliefs, while private beliefs can diverge wildly. A central challenge of institutional entrepreneurship, therefore, is the transformation of the private beliefs of a few into common beliefs that can support new institutions. The paper argues that institutional entrepreneurship, while common, seldom succeeds because it entails a sequence of relatively unlikely events, including the recognition of an opportunity, the execution of organizational experiments, and the creation of public knowledge. Each stage of institutional entrepreneurship requires a combination of personal and structural qualities that are rarely found in a single individual, which explains why so few of them succeed.

Colleen Casey, Critical Connections: The Importance of Community-Based Organizations and Social Capital to Credit Access for Low-Wealth Entrepreneurs, 50 Urb. Aff. Rev. 366 (2014).

Abstract (adapted from author): This article studies the relationship between linking social capital and credit access for low-wealth entrepreneurs. The author argues that the support provided by community-based organizations facilitates critical linkages to credit access for low-wealth entrepreneurs. Data on nascent firms engaging in start-up efforts in the United States in 2005 from the Panel Survey of Entrepreneurial Dynamics II (PSED II) are used to test the effects of government, bank, and community-based organization supports. The results suggest that government support has a positive effect for entrepreneurs overall. However, among low-wealth entrepreneurs, support provided by community-based organizations significantly increases access to credit for start-up activities.

Ben R. Craig et al., Public Policy in Support of Small Business: The American Experience, 6 Ohio St. Entrepren. Bus. L.J. 457 (2011).

Abstract (from authors): Information problems in small enterprise credit markets can result in a market equilibrium characterized by credit rationing. These information problems are potentially more severe during sharp economic downturns such as the recent Great Recession. Government interventions to alleviate credit constraints on small firms need to be designed to correct the specific market failure resulting in socially suboptimal credit flows. The authors argue that Small Business Administration loan guarantees are a potentially appropriate intervention and provide a review of empirical research that supports the authors’ contention.

Douglas J. Cumming, Sofia A. Johan & Minjie Zhang, The Economic Impact of Entrepreneurship: Comparing International Datasets (2013), available at

Abstract (adapted from authors): Based on a comprehensive sample of all available countries and years, with the World Bank data being the most comprehensive, the authors find entrepreneurship has a significantly positive impact on GDP/capita, exports/GDP, and patents, and a negative impact on unemployment. Inferences from the Compendia data are very consistent. By contrast, inferences from the OECD data are not supportive of any of these propositions. The data highlight the importance of access to finance without downside costs so that entrepreneurs are encouraged to take risk. Further, the data highlight institutional differences in risk attitudes more generally inhibit risk taking and thereby limit the effectiveness of entrepreneurship. As well, the data highlight a central role for careful measurement of entrepreneurial activities, and for inclusion of as many countries and years as possible in order to effectively analyze the impact of entrepreneurship.


Geoffrey Desa & Sandip Basu, Optimization or Bricolage? Overcoming Resource Constraints in Global Social Entrepreneurship, 7 Strategic Entrepren. J. 26 (2013), available at

Abstract (adapted from authors): Resources play a vital role in the development of an entrepreneurial venture. For ventures operating in the public interest, the process of effective resource mobilization can be especially critical to the social mission. However, there has been limited empirical examination of the approaches used by social ventures to mobilize critical resources. The authors study two processes of resource mobilization -- optimization and bricolage, and examine the antecedent conditions that influence a venture’s selection of these processes. The instant theory predicts that environmental munificence and organizational prominence have U-shaped associations with the use of bricolage and positive associations with the use of optimization. The authors test their hypotheses on a sample of 202 technology social ventures from 42 countries, and discuss implications for the social entrepreneurship and broader entrepreneurship literatures. 

Raquel Fonseca, Pierre-Carl Michaud & Thepthida Sopraseuth, Entrepreneurship, Wealth, Liquidity Constraints, and Start-up Costs, 28 Comp. Lab. L. & Pol'y J. 637 (2006).

Abstract (from authors): Our paper focuses on the effect of liquidity constraints and start-up costs on the relationship between wealth and fraction of entrepreneurs in an economy. We consider a model of heterogeneous agents with occupational choice. Wealth and entry into entrepreneurship are endogenous. Entrepreneurs can borrow capital from banks to set up or expand their business. However, because of limited enforceability of loan contracts, banks are reluctant to grant credit to entrepreneurs with low levels of wealth. Wealth plays the role of collateral and limits default. We introduce additional institutional features, namely start-up costs, to the model. In addition to savings and entrepreneurial choices, used by Cagetti and De Nardi, we allow the individual to consider inactivity. Indeed, old individuals may withdraw from the labor force rather than continue activity. We then get a complete picture of occupational choices in old age, as a less generous old age pension may entice individuals to delay retirement and consider starting their own business. They can also have strong incentives to be inactive (retirement, unemployment, or disability can be here interpreted as being inactive). Start up costs, by shifting the expected entrepreneurial gains, may actually affect these choices. The model predicts that with liquidity constraints, the probability of entering entrepreneurship is an increasing function of individual wealth. The originality of our paper is to show that the introduction of start-up costs tends to flatten this relationship. This is highly relevant since we show that start-up costs and liquidity constraints are positively correlated across countries but have different effects on the relationship between entrepreneurship and with wealth.

Luis Armando Garcia, Teaching Private Equity Investment in Higher Education: An Entrepreneurship Approach (2011), available at

Abstract (from author): A determining factor in entrepreneurship is the level of education of the entrepreneur. Universities and institutions of higher learning are called to design courses and support to potential entrepreneurs. European universities taking part in the European Higher Education Area (EHEA) should exploit the potential business network that students have at their reach inside the EU area. Entrepreneurship education warrants an improvement of financial literacy, for studies have shown that in many developed nations consumers are poorly informed about financial products and practices. Venture Capitalists consider universities as sources of truly exceptional innovations and inventions, which can develop into successful companies within a short period of time. The Private Equity Investment industry has acquired enormous popularity as an alternative investment asset class over the past two decades. Its backers claim that its extensive economic benefits come from a model that aligns the interest of both owners and management. Perhaps it has never been easier than right now for companies and start-ups to locate, contact and engage potential sources of Private Equity Investment and/or Venture Capital Funds. Entrepreneurship and financial Literacy should be taught openly in Business Schools around the world. The entrepreneurship industry is ready to join forces with academics and students in order to confront the unharmonious aspects of the current curriculum of entrepreneurship education.

Emilia Garcia-Appendini, Lending to Small Businesses: The Value of Soft Information (2011), available at

Abstract (from author): The authors examine whether banks use soft information in their lending decisions. To overcome the problem of soft information measurement, we analyze whether publicly available variables that are correlated with the borrowers' credit quality are more significant in explaining the lending decisions of banks that have no soft information. They find that the power of these variables to predict credit outcomes is lower whenever the bank has access to soft information. The results indicate the importance of soft information in small business lending, and are robust to several measures of soft information availability, and to a potentially endogenous relationship between soft information and credit quality.

Manuel Gonzalez-Diaza & Vanesa Solis-Rodriguez, Why Do Entrepreneurs Use Franchising as a Financial Tool? An Agency Explanation, 27 J. Bus. Venturing 325 (2012).

Abstract (from journal): When and why one type of entrepreneur (franchisor) attracts to its ventures another type of entrepreneur (franchisees) instead of passive investors is a central concern in entrepreneurship literature. Based on the informativeness principle of the principal–agent model, we claim that franchisees are not such an expensive financial tool as has been argued in the literature because their compensation (return) is more efficiently designed: it directly depends on variables which are under franchisees' control. We therefore link agency and financial explanations for franchising. Most of our findings show that, once the agency argument is controlled for, the higher the cost of alternative funds for the franchisor (estimated through different variables), the more the franchisor will rely on expansion through franchising as opposed to company-ownership. The authors interpret this as a clue that franchising is also used as a financial capital source.

Michelle M. Harner, Mitigating Financial Risk For Small Business Entrepreneurs, 6 Ohio St. Entrepren. Bus. L.J. 469 (2011).

Abstract (from author): Financial distress by definition threatens a company's viability. Entrepreneurial and start-up entities are particularly vulnerable to this threat. Yet, much of the discussion following the recent recession focuses almost exclusively on financial institutions and “too-big-to-fail” entities. This essay re-examines lessons gleaned from the recession in the context of smaller, entrepreneurial entities. Specifically, it analyzes how small business entrepreneurs might invoke principles of enterprise risk management to mitigate the long-term impact of financial distress on their business models. It also considers related refinements to extant small business regulations, including the U.S. bankruptcy laws. The essay's primary objective is to help policymakers, entrepreneurs and investors rethink financial distress and recognize opportunities for “successful failures.”

Hans K. Hvide & Jarle Moen, Lean and Hungry or Fat and Content? Entrepreneurs' Wealth and Start-Up Performance, 56(8) Mgm’t. Sci. 1242 (2010).

Abstract (from authors): If entrepreneurs are liquidity constrained and not able to borrow to operate on an efficient scale, economic theory predicts that entrepreneurs with more personal wealth should do better than those with less wealth. We test this hypothesis using a novel data set covering a large panel of start-ups from Norway. Consistent with liquidity constraints, we find a positive relation between founder prior wealth and start-up size. The relationship between prior wealth and start-up performance, as measured by profitability on assets, increases in the first three wealth quartiles. In the top wealth quartile, however, profitability drops sharply in wealth. Our findings are consistent with a luxury good interpretation of entrepreneurship and that higher wealth may induce a less alert or a less dedicated management. We conclude that an abundance of resources might do more harm than good for start-ups.

Paul Kedrosky & Daniel Stangler, Financialization and Its Entrepreneurial Consequences, (Ewing Marion Kauffman Foundation Research Paper, 2011), available at

Abstract: The U.S. financial sector expanded dramatically over the last hundred years in both relative and absolute terms. This expansion has had a number of causes and consequences, most of which can be lumped broadly under the heading of increased 'financialization' of the economy. This led, in part, to the financial crisis of 2008/2009. In this paper, however, we consider the implications of financialization for the structure of the U.S. economy, in particular for entrepreneurship.

Reddi Kotha & Gerard George, Friends, Family, or Fools: Entrepreneur Experience and It's Implications for Equity Distribution and Resource Mobilization (2012), available at

Abstract (from authors): Who helps entrepreneurs raise the resources they need and how much equity does an entrepreneur distribute in return? The authors use a sample of 611 entrepreneurs in the U.S. to examine why some entrepreneurs are more likely than others to distribute ownership selectively to helpers. The authors find that entrepreneurs with specific industry experience and start-up experience are able to provide ownership more selectively and raise more resources from their helpers. The authors refine the categorization of social ties further to make a distinction between professional and familial ties to show that the ownership distribution and types of resource contributions vary by the mix of ties in the entrepreneur’s helper network. These findings have implications for theories of resource assembly, social structure and entrepreneurship, and organization design.

Nataliia Kravchenko et al., Information Externalities and Small Business Lending by Banks: A Comparison of Urban and Rural Counties in the U.S. (2011), available at

Abstract (adapted from authors): It is widely recognized that small business is not only an important source of employment but is the genesis of virtually all successful large enterprises. Given their size and characteristic opaqueness, Small and Medium Enterprises (SMEs) tend to be more financially constrained than large firms because of the lack of access to external financing from both banks and capital markets. Though building a relationship provides the loan officer more information about the individual entrepreneur, there are other factors that can influence the success or failure of an enterprise. The authors divide the entrepreneurial information available to bank loan officers into three segments: information about competition in the local banking market, information about success and failures of other SMEs in the local market, and information about how well other banks are performing in the local market. The primary purpose of this paper is to find proxies for this entrepreneurial information and to gauge its impact on bank lending in a geographical area. The authors then test to see how their proxies for this information impact the dollar volume of small business lending. The analysis uses county level data as the geographical area and controls for general economic conditions such as the level of income and the endowments of human capital. The paper confirms the importance of entrepreneurial information in influencing the level of SME lending by banks.

Josh Lerner, Entrepreneurship, Public Policy, and Cities (World Bank, Policy Research Working Paper No. 6880, 2014), available at

Abstract (by author): Since the 2008-09 global financial crises, interest among policy makers in promoting innovative ventures has exploded. The emerging great hubs of entrepreneurial activity, like Bangalore, Dubai, Shanghai, Silicon Valley, Singapore, and Tel Aviv, bear the unmistakable stamp of the public sector. Enlightened government intervention played a key role in each region's emergence. But for each effective government intervention, dozens, even hundreds, disappointed with substantial public spending bearing no fruit.

This paper sheds light on how governments can avoid mistakes in stimulating entrepreneurship. In recent decades, efforts have increased to provide the world's poorest with financing and other assistance to facilitate their entry into entrepreneurship or the growth of their small ventures. These are typically subsistence businesses offering services like snack preparation or clothing repair. Such businesses typically allow business owners and their families to get by, but little else. The public policy literature, along with academic studies of new ventures, often does not distinguish among the types of businesses being studied. The author focuses here exclusively on high-potential new ventures and the policies that enhance them. This choice, not intended to diminish the importance of efforts to boost microenterprises, reflects the complexity of the field: the dynamics and issues involving micro firms are quite different from those of their high-potential counterparts. A substantial literature suggests that promising entrepreneurial firms can have a powerful effect in transforming industries and promoting innovation.

John B. Maier II & David A. Walker, The Role of Investment Capital in Financing Small Business, 2 J. Bus. Venturing 207-214 (1987).

Abstract:  Deals with a study which examined venture capital firms that participated in small business financing. Characteristics of the firms; Allocation of resources; Role of venture capital in financing small business.

Othmar Manfred Lehner, Crowdfunding Social Ventures: A Model and Research Agenda (2012), available at

Abstract (by author):  Crowdfunding (CF) in a social entrepreneurship context is praised in narrations for its multifaceted potential - to access much needed financial resources, to gain legitimacy through crowd participation, and to further tap the crowd as a resource for numerous activities of the venture. From an academic point of view however, little has been written about CF as a whole, and inquiries from the social entrepreneurship sphere are so far mostly concerned with CF donations. In order to overcome the scarcity of the resource ‘crowd’ being asked for gifts, new approaches, including tailored reward systems, more structured bond-like investments and equity based CF are experimented with. Finance literature scarcely addresses these new forms, and no article so far shows concern for the idiosyncrasies of social ventures and the differing rationale of the social entrepreneurs and investors in CF activities. This paper thus sets out to first review existing literature on financing social ventures as well as on crowdfunding. Based upon the findings, the author subsequently draws up an early scheme of CF in order to structure future inquiries and to provide a common ground for discussion. Based upon the two streams, and in reflection to perspectives from traditional finance, a research agenda of eight themes for CF of social ventures is set up. The themes proposed are: investor types and utility-functions; corporate governance and structure in CF ventures; investor relations, risk and disclosure; applications and comparative approaches; network tie formation; legitimacy, institutions and democracy; challenging finance metrics; and legal and regulative hurdles for equity and debt CF. 

Colin M. Mason & Richard T. Harrison, Closing the Regional Equity Capital Gap: The Role of Informal Venture Capital, 9 Small Bus. Econ.153-172 (1995).

Charles Murnieks et al., ‘I Like How You Think': Similarity as an Interaction Bias in the Investor–Entrepreneur Dyad, 48 J. Mgmt. Studies 1533 (2011), also available at

Abstract (adapted from authors): Investigating the factors that influence venture capital decision-making has a long tradition in the management and entrepreneurship literature. However, few studies have considered the factors that might bias an investment decision in a way that is idiosyncratic to a given investor–entrepreneur dyad. The authors do so in this study. Specifically, the authors build from the literature on the ‘similarity effect’ to investigate the extent to which decision-making process similarity (shared between the investor and the entrepreneur) might bias or otherwise impact the investor's evaluation of a new venture investment opportunity. The findings suggest venture capitalists evaluate more favourably opportunities represented by entrepreneurs who ‘think’ in ways similar to their own. Moreover, in the presence of decision-making process similarity, the impacts of other factors that inform the investment decision actually change in counter-intuitive ways.

Sarah Pearlman, Can Low Returns to Capital Explain Low Formal Credit Use? Evidence from Ecuador, 48 J. Developing Areas 1 (2014).

Abstract (adapted from author): One potential explanation for low formal credit use is that poor entrepreneurs generate returns to capital below borrowing costs and cannot afford the loans. The article tests this using a new, nationally representative data from Ecuador, focusing on entrepreneurs that say credit constraints are a major problem. The author estimates returns to capital and find monthly returns between 3.5% and 21%, well above prevailing interest rates. Despite this, one third of the finance constrained sample expresses no demand for a hypothetical loan. She estimates the determinants of demand for this loan, focusing on the role profitability may play, and finds that measures of profitability are positively and significantly associated with demand, and that perceptions of profitability are among the strongest determinants. Meanwhile, assets, employees, duration, formality and past credit use have no predictive power. This suggests that some micro-entrepreneurs cannot afford prevailing interest rates and rationally eschew formal credit as a result.

Dana Brakman Reiser & Steven A. Dean, Hunting Stag with Fly Paper: A Hybrid Financial Instrument for Social Enterprise, 54 B.C.L. Rev. 1495 (2013).

Abstract (by authors): Social entrepreneurs and socially motivated investors share a belief in the power of social enterprise: ventures that pursue a -double bottom line- of profit and social good. Unfortunately, they also share a deep mutual suspicion. Recognizing that social ventures-just like traditional for-profit and nonprofit enterprises-need capital to flourish, this article offers a financing tool to transform that skepticism into commitment. Unlike the array of new entities that have emerged in recent years-including L3Cs, benefit corporations, and flexible purpose corporations-the hybrid financial instrument this article describes provides a robust and transparent solution to the puzzle that lies at the heart of every social enterprise: how to blend a profit motive with a social mission. Recognizing their shared dilemma as an example of what economists call a stag hunt, FLY Paper strikes that elusive balance by allowing investors and entrepreneurs to signal credibly a reciprocal commitment to the pursuit of a double bottom line.

Alicia Robb & Robert Seamans, The Role of R&D in Entrepreneurial Finance and Performance (2014), available at

Abstract (by authors): The authors extend theories of the firm to the entrepreneurial finance setting and argue that R&D-focused start-up firms will have a greater likelihood of financing themselves with equity rather than debt. They argue that mechanisms that reduce information asymmetry, including owner work experience and financier reputation, will increase the probability of funding with more debt. They also argue that startups that correctly align their financing mix to their R&D focus will perform better than firms that are misaligned. The authors study these ideas using a large nationally representative dataset on start-up firms in the United States.

Serena Sandri, Christian Schade, Oliver Musshoff & Martin Odening, Holding On for Too Long? An Experimental Study on Inertia in Entrepreneurs’ and Non-Entrepreneurs’ Disinvestment Choices, 76(1) J. Econ. Behav. & Org. 30 (2010).

Abstract (from Elsevier): Disinvestment, in the sense of project termination and liquidation of assets including the cession of a venture, is an important realm of entrepreneurial decision making. This study presents the results of an experimental investigation modeling the choice to disinvest as a dynamic problem of optimal stopping in which the patterns of decisions are analyzed with entrepreneurs and non-entrepreneurs. Our experimental results reject the standard net present value approach as an account of observed behavior. Instead, most individuals seem to understand the value of waiting. Their choices are weakly related to the disinvestment triggers derived from a formal optimal stopping benchmark consistent with real-options reasoning. We also observe a pronounced ‘psychological inertia’, i.e., most individuals hold on to a losing project for even longer than real-options reasoning would predict. The study provides evidence for entrepreneurs and non-entrepreneurs being quite similar in their behavior.

Arnout Seghers et al., The Impact of Human and Social Capital on Entrepreneurs’ Knowledge of Finance Alternatives, 50 J. Small Bus. Mgmt. 63 (2012).

Abstract (adapted from journal): Building upon prior research that demonstrates how the limited knowledge of finance alternatives of entrepreneurs may cause suboptimal finance decisions, this paper examines how entrepreneurs’ human and social capital influence their knowledge of finance alternatives. For this purpose, the authors use survey data from 103 Belgian start-ups. Results demonstrate that entrepreneurs with a business education and entrepreneurs with experience in accountancy or finance have a broader knowledge of finance alternatives. Having a strong network in the financial community is further positively associated with the knowledge of finance alternatives. However, generic human capital, including higher education, industry experience, and management experience, is almost not related with the knowledge of finance alternatives.

Yochanan Shachmurove, First-Round Entrepreneurial Investments: Where, When and Why? (PIER Working Paper No. 11-017, 2011), available at

Abstract (from author): This paper examines the where, when and why of first round entrepreneurial investment activity in the United States from the first quarter of 1995 until the second quarter of 2010. The paper analyzes these venture capital investments taking into consideration the role of macroeconomic variables, region, and industry. Additionally, trends in regional and industrial investments are evaluated using statistical and graphical analyses. By studying these findings, one is able to understand the impact of different periods of economic growth on venture capital investments. Lastly, the shock of the bubble and recent financial crisis are integrated into the findings.

Oleksandr Talavera et al., Social Capital and Access to Bank Financing: The Case of Chinese Entrepreneurs, 48 Emerging Markets Fin. & Trade 55 (2012).

Abstract (from authors): This paper presents the results of a study of the effects of social capital on access to bank financing. Based on a Chinese nationwide survey, our analysis suggests that entrepreneurs who contribute to charities are more likely to be successful in loan applications. In addition, we find that political party membership is an important determinant of state-owned bank financing, whereas time spent on social activities increases the probability of obtaining loans from commercial banks. Therefore, our data provide some evidence for substitutability between various types of social capital. To obtain a loan from a specific type of bank, an entrepreneur should access the relevant social network.   

John Reinecke Thorne, Alternative Financing for Entrepreneurial Ventures, 13 Entrepreneurship: Theory & Prac. 7-9 (1989).

Abstract:  The article focuses on the alternative financing practice for entrepreneurial ventures. The conventional concept of financing for entrepreneurial ventures is that investments are made in the company stock by the entrepreneurs, their partners and later by investors. Variations of this theme include combinations of debt and equity. Since bank borrowings to start companies almost always include personal guarantees and collateral, borrowing is in effect putting personal funds at risk and is equivalent to investing inequity. In practice, a surprising number of new companies are financed substantially or sometimes entirely from other sources. It is the entrepreneur's ability to find and exploit other sources of funding that often identifies the entrepreneurial character of the individual. The entrepreneur identifies the business opportunity and gathers the resources to develop the business. The methods used in acquiring these scarce resources are important characteristics of entrepreneurs. Some of the techniques used to acquire substantial resources are borrowing from suppliers and service providers, dealing with customers, free or low-cost labor, raising of non-equity funds and so on.

Paul D. Reynolds, Entrepreneurship in Developing Economies: The Bottom Billions and Business Creation, 8 Foundations and Trends in Entrepren. 141 (2012), available at

 Abstract (by author): Over 100 million of the 1.8 billion mid-life adults living on less than $15 a day are attempting to create new firms. Another 110 million are managing new ventures. This is almost half of the global total of 450 million individuals involved with 350 million start-ups and new ventures. For the poor, business creation provides more social and personal benefits than illegal and dangerous migration, criminal endeavors, or terrorism. Almost all of the business creation by the bottom billions occurs in developing countries, half are in Asia. The ventures initiated by the bottom billion are a significant minority of all firms expecting growth, exports, an impact on their markets, and in high tech sectors. Assessments based on multi-level modeling suggest that young adults, whether they are rich or poor, in countries with access to informal financing and an emphasis on traditional, rather than secular-rational, and self-expressive values are more likely to identify business opportunities and feel confident about their capacity to implement a new firm. Such entrepreneurial readiness is, in turn, associated with more business creation. Compared to the strong associations of informal institutions with business creation, formal institutions have very modest and idiosyncratic relationships. Expansion of access to secondary education and early stage financing may be the most effective routes to more firm creation among the bottom billion. 

Jeffry A. Timmons, A Business Plan Is More Than a Financing Device, 14 Harv. Bus. Rev. (Mar.-Apr. 1980).

Brian Uzzi, Embeddedness in the Making of Financial Capital: How Social Relations and Networks Benefit Firms Seeking Financing, 64 Am. Soc. Rev. 481-505 (1999).

Abstract (from author):  This article investigates how social embeddedness affects an organization's acquisition and cost of financial capital in middle-market banking--a lucrative but understudied financial sector. Using existing theory and original fieldwork, it develops a framework to explain how embeddedness can influence which firms get capital and at what cost. It then statistically examines those claims using national data on small-business lending. At the level of dyadic ties, it finds that firms that embed their commercial transactions with their lender in social attachments receive lower interest rates on loans. At the network level, firms are more likely to get loans and to receive lower interest rates on loans if their network of bank ties has a mix of embedded ties and arm's-length ties. These network effects arise because embedded ties motivate network partners to share private resources, while arm's-length ties facilitate access to public information on market prices and loan opportunities so that the benefits of different types of ties are optimized within one network. It concludes with a discussion of how the value produced by a network is at a premium when it creates a bridge that links the public information of markets with the private resources of relationships.

Howard E. Van Auken & Richard Carter, Acquisition of Capital by Small Business, 27 J. Small Bus. Mgmt. 1-9 (1989).

Dennis R. Young & Mary Clark Grinsfelder, Social Entrepreneurship and the Financing of Third Sector Organizations, 17 J. Pub. Affairs Ed. 543 (2011).

Abstract (from authors): In this paper, we review the literature on entrepreneurship and the skill sets required by entrepreneurs operating in different sectors of the economy.  Case studies from the social enterprise literature are examined in some detail. We search for distinctions between entrepreneurship in the business and public sectors and entrepreneurship in the nonprofit sector and relate this to the variations in financial support found among nonprofit sector organizations. We conclude that third sector social entrepreneurs are likely to require a different mix of skills than business entrepreneurs. In particular, political skills broadly defined, and the ability to secure and maintain charitable support, appear to be common to successful social enterprise ventures. Hence, taking too narrow a view of social entrepreneurship and social enterprise by confining it to the traditional business model of entrepreneurship constrains the potential benefits of developing social entrepreneurship in the third sector. This implies that education of potential social entrepreneurs should be broadly construed, combining business, public and nonprofit based instruction.

Peter A. Zaleski, Start-Ups and External Equity: The Role of Entrepreneurial Experience, 46 Bus. Econ. 43 (2011).

Abstract (from author): Interest in entrepreneur ship has increased dramatically over the last two decades. Because of the role that entrepreneur ship plays in economic development, an understanding of the financing of business start-ups is essential. A long-standing problem for many business start-ups is acquiring external equity during the first year of operations. This paper analyzes the determinants of obtaining external equity. Special consideration is given to the role of entrepreneurial experience. The results suggest that entrepreneurial experience impacts a start-up's ability to obtain external equity.

Online Resources

Allen N. Berger & Gregory F. Udell, Relationship Lending and Lines of Credit in Small Firm Finance 68 J.  Bus. 351-381 (1995).

Ben R. Craig, William E. Jackson III, & James B. Thomson, On SBA-Guaranteed Lending and Economic Growth, Fed. Reserve Bank  Cleveland (2003) (Working Paper).

Community Financial Resource Center,

Dow Jones, Products & Services, Knowledge Center

Financing Small Business Enterprises: Sources of Information, Business Reference Services, Library of Congress,

Raquel Fonseca, Pierre-Carl Michaud & Thepthida Sopraseuth, Entrepreneurship, Wealth, Liquidity Constraints and Start-Up Costs (2007).

Robert L. Formaini, The Engine of Capitalist Process: Entrepreneurs in Economic Theory, Econ. & Fin. Rev., Fed. Reserve Bank Dallas, (2001), available at

John Freear & William Wetzel, Jr., Who Bankrolls High-Tech Entrepreneurs, 5 J.  Bus. Venturing 77-89 (1990).

K. Murray, 5 Ways to Help Young Entrepreneurs Finance Their Business Ideas, (Aug. 12, 2013),

NVST Private Equity Network, Resources

vFinance, Inc., The Center for Innovative Entrepreneurship, CIE Programs and Services for Entrepreneurs and Investors

Other Materials

Kerry Hannon, For Some, Age Is No Obstacle to Entrepreneurship, N.Y. Times, Mar. 13, 2014, at F2.

Nicole Hong, Local Investing Takes Off: More Entrepreneurs Are Turning to a New Source of Funds: Their Neighbors, Wall St. J., June 12, 2014, at R1.

Ian Mount, Self-Finance or Raise Money? A Quandary for Start-Ups, N.Y. Times, June 20, 2013, at B6.

Sarah E. Needleman & Emily Maltby, Start-Ups Crowd 'Accelerators' - As 'Boot Camps' Proliferate, Doubts Grow About Their Value, Wall St. J., May 24, 2012, at B1.

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