23 research outputs found
Working Capital Financing
Howard E. Van Auken is an Assistant Professor of Finance at Iowa State University
The Business Launch Decision: An Empirical Investigation of Reasons for Not Starting a New Business
This article presents the results of a survey that examined the business launch decision. All of the individuals in the study al/ended a workshop on how to evaluate a business idea and launch a new venture. All of the individuals who all ended the workshop were interested in, but decided against, launching a new venture. The results of the study indicate that time constraints, availability of capital, and risk tolerance are perceived as significant obstacles by potential new business owners. Significant differences in the ranking of obstacles were found relative to whether the individuals believed that the obstacles to launch could be overcome, age of the respondent, and whether the individuals had previously owned a business. In addition, individuals who were more highly educated and had previous business ownership were less likely to launch a new business subsequent to the workshop. The results of the study can be used by service providers and consultants who develop training programs that assist individuals in the screening of business ideas and launching of new firms. The results of the study also can be incorporated into college curriculum to provide students with insight into obstacles impacting on business launch
The Business Launch Decision: An Empirical Investigation of Reasons for Not Starting a New Business
This article presents the results of a survey that examined the business launch decision. All of the individuals in the study al/ended a workshop on how to evaluate a business idea and launch a new venture. All of the individuals who all ended the workshop were interested in, but decided against, launching a new venture. The results of the study indicate that time constraints, availability of capital, and risk tolerance are perceived as significant obstacles by potential new business owners. Significant differences in the ranking of obstacles were found relative to whether the individuals believed that the obstacles to launch could be overcome, age of the respondent, and whether the individuals had previously owned a business. In addition, individuals who were more highly educated and had previous business ownership were less likely to launch a new business subsequent to the workshop. The results of the study can be used by service providers and consultants who develop training programs that assist individuals in the screening of business ideas and launching of new firms. The results of the study also can be incorporated into college curriculum to provide students with insight into obstacles impacting on business launch
The Familiarity of Small Technology-Based Business Owners with Sources of Capital: Impact of Location and Capitalization
This paper examines issues related to the acquisition of capital by a sample of 142 small technology-based firms. Specifically, the study investigates the relationship between owners of small technology-based firms\u27 familiarity with the alternative sources of capital and (I) location of the business and (2) amount of capital raised by the business. The results show that familiarity with alternative sources of capital is affected by the location of the business and amount of capital raised by the company.
The results have several implications affecting small business owners, providers of capital, and policy-makers. First, many small business owners are relatively unfamiliar with many sources of capital that are used to fund growth. Second, owners of small technology-based firms indicate low familiarity with government financing programs. Third, owners of small technology-based firms in smaller communities are less familiar with sources of capital commonly used to finance growth. Fourth, owners of small technology-based firms are relatively unfamiliar with methods of bootstrap financing
Financing Patterns of Minority-Owned Small Business
This study examines the initial, seasonal, and refinancing characteristics of 67 minority business owners. The results are compared to the financial characteristics of women-owned and mixed ownership small firms. Minority-owned firms are found to rely primarily on equity to finance initial operations. Minority business owners' initial debt was commonly obtained through Small Business Administration (SBA)guaranteed loans and government grants. A very large percent of the minority business owners who acquired debt were required to provide numerous supporting documents. The results indicate that minority firms that experienced difficulty in obtaining initial capital continue to experience financial problems relating to operations
Small Business Capitalization Patterns
This study investigates the initial capitalization and financing patterns of recently established (new) and established (old) small businesses in Iowa. Analysis of survey responses indicates that significant differences exist between these two groups of firms. Specifically, new firms are found to have relied more heavily on debt financing than old firms. This suggests that new firms with high debt loads are likely not to survive and become old firms
Effect of Professional Background on Venture Capital Proposal Evaluation
This paper reports on the differences in investment related activities and evaluation criteria of venture capitalists having a business background compared to venture capitalists having a non-business background . Data was collected from a nationwide survey of 72 venture capitalists. The results show that venture capitalists having a non-business background invest in earlier stages of the firm. require a shorter payback period and make more follow-up investments than business background venture capitalists. The non-business background venture capitalists place greater importance on the uniqueness of the product , the cost structure of the project and the entrepreneur\u27 s health and less importance on exit procedures than business background venture capitalists
New Technology-Based Firms' Persuit of SBIR Funds
This paper presents the results of a study that investigated the relationship between characteristics of firms and their experience with applying for Small Business Innovation Research (SBIR) funding. The basic issues investigated are (1) the relationship between firm characteristics and the decision to apply for SBIR funding, and (2) the relationship between firm characteristics and whether the SBIR application was successful. The results of the study demonstrate that local efforts to promote the SBJR program by encouraging firms to apply and by increasing the visibility of workshops can lead to a greater number of firms to apply for SBIR funding. Efforts directed at firms in small communities may be even more effective than efforts directed towards firms in large communities. The results also suggest that organizations that provide SBIR assistance may consider screening potential clients according to the business goals of firm’s owners. Owners of "life-style" firms may need extra encouragement and, perhaps, assistance to apply for SBJR funding. Finally, the results also imply that firms that are smaller (as compared to larger firms), have more limited experience raising capital, and serve a smaller market may need greater assistance in pursuing SBIR funding
New Technology-Based Firms\u27 Persuit of SBIR Funds
This paper presents the results of a study that investigated the relationship between characteristics of firms and their experience with applying for Small Business Innovation Research (SBIR) funding. The basic issues investigated are (1) the relationship between firm characteristics and the decision to apply for SBIR funding, and (2) the relationship between firm characteristics and whether the SBIR application was successful. The results of the study demonstrate that local efforts to promote the SBJR program by encouraging firms to apply and by increasing the visibility of workshops can lead to a greater number of firms to apply for SBIR funding. Efforts directed at firms in small communities may be even more effective than efforts directed towards firms in large communities. The results also suggest that organizations that provide SBIR assistance may consider screening potential clients according to the business goals of firm’s owners. Owners of life-style firms may need extra encouragement and, perhaps, assistance to apply for SBJR funding. Finally, the results also imply that firms that are smaller (as compared to larger firms), have more limited experience raising capital, and serve a smaller market may need greater assistance in pursuing SBIR funding
Impact of Operational Planning on Small Business Retail Performance
This study examined operational planning activities (inventory, marketing, financial, and personnel) of successful (n=92) and failed (n= 91) small business apparel and accessory retailers. Results suggest that inventory, marketing, and financial planning activities significantly differed between groups with successful retailers being more likely than failed retailers to engage in such functions. No differences were found between groups in personnel planning. Study implications are discussed for small business practitioners and academic researchers