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Unleashing main street entrepreneurship: Crowdfunding, venture capital, and the democratization of new venture investments

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  • Regan M. Stevenson

    () (Indiana University)

  • Donald F. Kuratko

    () (Indiana University)

  • Jared Eutsler

    () (University of North Texas)

Abstract

Over the past several decades, U.S. venture capital (VC) firms have focused their attention and investment dollars in specialized regional hubs where high-tech entrepreneurship tends to flourish. As a result, “main street” businesses such as retail stores, consumer services, and other non-tech businesses typically find it incredibly difficult to secure equity funding. Yet, in recent years, crowdfunding (CF) has become a viable new source of funding for entrepreneurs. Using a longitudinal assessment of VC and CF at the national, regional, and sector levels in the USA, we demonstrate how the emergence of CF has unlocked new growth opportunities for main street entrepreneurs, particularly those located in underserviced funding regions. Likewise, we expose how CF augments national and regional funding patterns by re-allocating funding to industries that VCs typically do not fund. Lastly, we discuss the practical and theoretical implications of what appears to be a shifting venture funding regime, and shed light on CF’s potential role in enhancing the resurgence of main street entrepreneurship across the USA.

Suggested Citation

  • Regan M. Stevenson & Donald F. Kuratko & Jared Eutsler, 2019. "Unleashing main street entrepreneurship: Crowdfunding, venture capital, and the democratization of new venture investments," Small Business Economics, Springer, vol. 52(2), pages 375-393, February.
  • Handle: RePEc:kap:sbusec:v:52:y:2019:i:2:d:10.1007_s11187-018-0097-2
    DOI: 10.1007/s11187-018-0097-2
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    Cited by:

    1. Peter Konhäusner, 2021. "Crowdsourcing in Sustainable Retail—A Theoretical Framework of Success Criteria," Journal of Risk and Financial Management, MDPI, Open Access Journal, vol. 14(2), pages 1-21, February.
    2. Mohd Nor Hakimin Bin Yusoff & Fakhrul Anwar Zainol & Mohammad Ismail & Razman Hafifi Redzuan & Rooshihan Merican Abdul Rahim Merican & Muhammad Ashlyzan Razik & Asyraf Afthanorhan, 2021. "The Role of Government Financial Support Programmes, Risk-Taking Propensity, and Self-Confidence on Propensity in Business Ventures," Sustainability, MDPI, Open Access Journal, vol. 13(1), pages 1-16, January.

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