The interplay between capital providers for entrepreneurial ventures: An analysis of the relations between diverse sources of funds

Abstract

The analysis of the possible relations between capital providers for young entrepreneurial ventures, and the impact of these interplays on funded firms, represents the current focus of entrepreneurial finance research. The market for funds for innovative start-ups has indeed exhibited a rapid and substantial evolution in the last decades: the emergence of new financing mechanisms, along with the evolution of traditional players, have created the basis for novel scenarios, eliciting the interest of scholars. The aim of this thesis is to contribute to this fast developing stream of literature outlining a holistic representation of the current knowledge on the topic and highlighting the main points of disagreement. The keynote which emerges from the examination is the impossibility of depicting interactions between capital providers with static rules which are universally valid: the variety of possible intercourses between diverse actors in the market is indeed wide and the outcomes conditional on a multitude of factors. Additionally, an empirical analysis based on Italian companies is performed. The proposed research question is answered by revealing the influence of four different personal attributes and investment practices of business angels on the future financing of the firms they fund, specifically focusing on follow-up venture capital injections.