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Essay / Research Paper Abstract
This 10-page paper discusses various views on entrepreneurial finance from a venture capital point of view. Bibliography lists 6 sources.
Page Count:
10 pages (~225 words per page)
File: AS43_MTentrfina.doc
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Unformatted sample text from the term paper:
cards, begging family and friends for money and even asking capitalists to take a stake in a company for a certain price. These are all viable methods of financing, and
because of this, the business and academic literature has taken very close looks at how these different methods of financing operate. In
this paper, weve been asked to examine some literature concerning financing, specifically, venture capital financing. Venture capital financing differs in a few ways from the standard bank loan. For one
thing, VCs are not so much lending money to the entrepreneur as much as theyre actually buying a piece of the company. In return for their investments, venture capitalists receive
profits, in the form of dividends of some kind - and when the entrepreneur decides to cash out, the capitalist will receive some of the proceeds of that sale as
well. Many companies find that venture capitalism is the ideal way to finance because theyre not obligated to pay unless they make
a specific profit. Needless to say, this shifts the risk to the VCs, which is why, in many respects obtaining financing through a venture capitalist can be more challenging then
obtaining a bank loan. What follows is a literature review and analysis about classical and modern theories about venture capitalism. Once weve analyzed
some of the literature about this topic, well discuss some of the gaps that occurs in this literature. Literature Review Foundational Articles/Classical Theories
Much of the information concerning classical theories of entrepreneurial financing focus on what could be considered an obvious fact: Namely that venture capitalists are attracted to businesses and industries that
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