The Evolution of Financing Entrepreneurship

Abstract

The financing of entrepreneurship has seen marked changes over time and continues to evolve rapidly. From the traditional sequence of self-funding, Angel financing, the rigors of securing Venture Capital, and, for successful firms, Initial Public Offerings (IPOs), the funding sequence has undergone substantial changes. Recent observations such as in the Wall Street Journal (November 05, 2018) suggest that many successful young firms (often tech companies) have continued to raise capital from private equity sources rather than in the public equity markets via IPOs. These additional fundraising efforts generally follow an extended period of business development and revenue generation wherein when many successful entrepreneurial firms that had proven large enough to go public stayed private (so called “unicorns”) because of the extent to which their funding requirements can in recent times flow from private sources. But today, there are many indications that some such firms (e.g. Uber, Lyft) are now seeing the advantages of going public, engaging in IPOs, which are often followed rapidly in very recent times by raising additional public share capital in a relatively short interval after the IPO.

Citation

Owers, J.E. and Sergi, B.S. (2019), "The Evolution of Financing Entrepreneurship", Sergi, B.S. and Scanlon, C.C. (Ed.) Entrepreneurship and Development in the 21st Century (Lab for Entrepreneurship and Development), Emerald Publishing Limited, Leeds, pp. 161-170. https://doi.org/10.1108/978-1-78973-233-720191011