Entrepreneurial finance – issues and evidence, revisited

Research in the field of entrepreneurial finance has long been neglected, despite the growing importance of entrepreneurial firms. Since the early 1990s, however, there has been an increasing interest in the nature and behaviour of financial markets and financial intermediaries that allocate capital to new ventures. This article aims at providing a deeper understanding of and insights into entrepreneurial finance by reviewing, structuring and interlinking theoretical models and empirical findings. In particular, it focuses on the relation between the entrepreneur and investors, sources of entrepreneurial funding, the returns of entrepreneurial investments to the parties involved (investors, entrepreneurs) and the drivers of entrepreneurial performance as well as implications for public policy. Based on a thorough review of the growing body of literature and current empirical studies, the article also highlights areas that still remain unclear and provide challenges and fertile ground for future research.