A Model of Entrepreneurial Finance

Topics:
Alternative Financing,
Commercial Lending,
Venture Capital
Tags:
Continuation Strategy,
Entrepreneurial,
Entrepreneurship,
Management,
University Of Minnesota
Source:
University of Minnesota

FREE Registration is required

Overview: A wealth-constrained entrepreneur seeks financing from a financial institution. Because the entrepreneur has a greater preference for continuing the firm over liquidating it, and for aggressive continuation strategies over conservative strategies, the institution must monitor the firm and exercise some control over its decisions. Convertible debt and active monitoring are more likely to be optimal if the firm faces greater uncertainty in its choice of continuation strategies; the aggressive continuation strategy is not too profitable on average; and the firm's cash flow distribution is more skewed, with low probability of success, low liquidation value, and high returns if successful. These results mirror entrepreneurial firms' choice between bank finance and venture capital finance.

(Is this item miscategorized? Does it need more tags? Let us know.)

Format: PDF | Size: 267KB | Date: May 2003 | Pages: 40

People who downloaded this item also downloaded

White Paper Alternate Financing Routes: States And Banks Are Teaming Up To Offer Financing Programs
Tools & Templates Dealer Financing Vs. Credit Union Financing
White Paper Alternatives to Direct Funding
White Paper Unconventional Capital: Alternative Financing Options
White Paper Strategies for Raising Growth Capital in a Turbulent Market

Top results from Alternative Financing

White Paper Reforming Social Security with Personal Accounts
White Paper Out on a Limb
White Paper A Serious Look at Serious Money
White Paper Raising Money In Tough Times: An Entrepreneur's Guide to Bootstrapping
White Paper Strategies for Raising Growth Capital in a Turbulent Market

» View all Alternative Financing listings

advertisement
advertisement
  • Click Here
  • Click Here
  • Click Here
advertisement

Returning users: Log In Here!

Already registered on BNET, TechRepublic, or ZDNet? Simply log in.

Free Membership: Sign Up Now!

Sign up for a free membership today and get instant and unlimited access to one of the largest databases of white papers, webcasts, and casestudies anywhere. Your FREE membership allows you to:

  • Download an unlimited amount of content, including classic and current white papers, case studies, webcasts and more
  • Track content on your chosen topics of interest
  • Receive targeted email alerts when your favorite content is added
  • Save content for future reading
  • Receive our member newsletter

When you register to access this directory, you become a member of BNET. In addition, you allow us to share your information with companies that produce products or services featured in the library--so that such companies may contact you with information and offers regarding their products and services. This enables us to keep the library a free service. As a directory registrant, you will receive a complimentary subscription to the BNET member newsletter, The BNET Report. You can unsubscribe from this newsletter at any time. By clicking the Sign up button, you indicate that you agree to our Terms and Conditions and have read and understand our Privacy Policy (updated).