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Obtaining early-stage financing for technology entrepreneurship: reassessing the demand-side perspective

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  • Einar Rasmussen
  • Roger Sørheim

Abstract

New technology-based firms face particular challenges in obtaining early-stage financing to develop and grow their business. Seen from the supply-side, high levels of uncertainty make investors reluctant and create a liability related to the supply of financing to these ventures. This introductory article reassesses the demand-side perspective to financing of technology entrepreneurship by considering how entrepreneurs can improve their chances of obtaining external financing. We propose that the perceptions and preferences of the entrepreneurs, the content and presentation of the business case, the networks and the relationships of the entrepreneurs, and the process of obtaining financing are issues of key importance for understanding how entrepreneurs can enhance the ‘investment readiness’ of their ventures. We synthesize the papers in this special issue and their contributions to research from the demand-side perspective. Moreover, we outline prospective areas for future research and implications for practice.

Suggested Citation

  • Einar Rasmussen & Roger Sørheim, 2012. "Obtaining early-stage financing for technology entrepreneurship: reassessing the demand-side perspective," Venture Capital, Taylor & Francis Journals, vol. 14(2-3), pages 77-89, February.
    • Handle: RePEc:taf:veecee:v:14:y:2012:i:2-3:p:77-89
    DOI: 10.1080/13691066.2012.667908
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    Cited by:

    1. Jessica Birkholz, 2023. "Do not judge a business idea by its cover: The relation between topics in business ideas and incorporation probability," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1327-1358, August.
    2. Thanh Huynh, 2016. "Early-stage fundraising of university spin-offs: a study through demand-site perspectives," Venture Capital, Taylor & Francis Journals, vol. 18(4), pages 345-367, October.
    3. Kou, Mingting & Yang, Yuanqi & Chen, Kaihua, 2020. "The impact of external R&D financing on innovation process from a supply-demand perspective," Economic Modelling, Elsevier, vol. 92(C), pages 375-387.
    4. Power Jane & Power Bernadette & Ryan Geraldine, 2022. "Determinants of equity financing: a demand-side analysis of Irish indigenous technology-based firms," The Irish Journal of Management, Sciendo, vol. 41(1), pages 52-68, July.
    5. Petra Moog & Christian Soost, 2022. "Does team diversity really matter? The connection between networks, access to financial resources, and performance in the context of university spin-offs," Small Business Economics, Springer, vol. 58(1), pages 323-351, January.

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