Startup, finance, economy, business, entrepreneurship, capital venture, financial intermediation, company, bank, financial market, innovation, risk, found, investment, project, single-tier approach, two-tier approach, financial issue, crowdfunding
When it comes to Finance, Economics, Business or a similar domain, we often, in one way or another, see the intervention of concepts such as Entrepreneurship and Capital venture. These are two concepts that meet at a certain level when doing business. In fact, before defining the concepts, it is important to mention that, on a global scale, this essay is based on the financial intermediation. To be specific, all the companies, big, medium or small, need financing at least once in their survival cycle. For big companies, it is easy to turn towards traditional ways of financing such as banks and financial market.
[...] Based on this aspect, we can say that entrepreneurs should look or request for more solid agreements with the CV to avoid conflicts. Nevertheless, considering the major role played by venture capitalists, the limitations and inconveniences displayed in this essay should not push entrepreneurs to consider venture capitalists as the enemy, but rather as a supporter and guide. Bibliography - Fabian and Ndofor (2007). - FILIP HEDMAN (2019) - Gompers (2003) -Josh Lerner and Ramada Nanda, (2020) - Keuschnigg (2014) - Meita Clara Wijaya Rosa, Eko Ganis Sukoharsono, Erwin Saraswati, (2019) - Ramdhan (2012) -Shane and Venkataraman (2000) - Schumpeter (2012) - Schmiemann and Eurostat (2016) - Tecker, Teker and Teraman (2016) - Uzzaman (2016) -Wang and Zhou (2004) - https://bpifrance-creation.fr/encyclopedie/financements/recours-a-investisseurs/capital-risque - https://yet.brussels/fr/l-entrepreneuriat-c-est-quoi#:~:text=Au%20sens%20strict%2C%20l%27entrepreneuriat,ou%20de%20devenir%20un%20entrepreneur [HYPERLINK: https://yet.brussels/fr/l-entrepreneuriat-c-est-quoi]. [...]
[...] Although there is always a possibility of buying a part or all the shares, it is important to mention that entrepreneurs usually lose their company or have less control than before (in case only part of the share is sold). Gompers (2003). Another way of doing is liquidation. This means that when the CV cannot handle the financial aspect as expected, it sells all the properties belonging to the startup. In fact, it is preferred in this case, to use the money from the liquidation, rather than looking for investors to bring financial assistance. From the above-mentioned information, we can say that entrepreneurs would not like to venture capitalists because they came as saviors in the first place. [...]
[...] In fact, there is no need of paying interests or taking a loan in order to launch the activities. Tecker, Teker and Teraman (2016). The role of CV in the growth of startups is also seen through its financing mechanism. Generally, the CV financing mechanism is divided in two approaches. The single-tier approach helps entrepreneurs by having two functions. On the one hand, the CV will act as a fund provider and fund manager on the other side. This is something that entrepreneurs and startups hardly benefit from the traditional funnels of financing. [...]
[...] So, the CV focuses on things such as the composition of the startup which is judged to be the most important factor when selecting and analyzing a company. In fact, the CV will study each member of the team by looking at elements such as their educational background, their experience in the field, etc. Secondly, the CV will analyze the product of the company. A product is meant to solve problems or at least have an added value. The venture capitalists focus on that element. [...]
[...] From the two definitions here above, we can deduce that entrepreneurship is about risk taking and innovation. Risk taking because the person must be able to go against or out of the normal ways of doing (thinking). This factor puts them together along with venture capitalists. This also explains the innovation found in the Entrepreneur and venture capitalist. Shane and Venkataraman (2000). On the other side, the capital venture is a form of investment made into small and new companies. [...]
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