scholarly journals A High Tech Start-up’s Journey Towards Funding

2021 ◽  
Author(s):  
◽  
Anna Samoylova
Keyword(s):  
New Zealand ◽  
Literature Review ◽  
Capital Structure ◽  
High Tech ◽  
Pecking Order ◽  
Funding Sources ◽  
Start Up ◽  
Angel Investment ◽  
Start Ups ◽  
Angel Investors

<p>1.1 Masters background  As part of the “Masters in Advanced Technology Programme” each student had to select a high-tech start-up that they wanted to be involved in throughout the year. Each individual would bring value to the start up through their background and experience. The start-up I selected was an interactive robotic toy called “Auti”. Project champion, Helen’s envisioned goal was for the toy to help children with autism learn positive behaviours.  Our team consisted of two main individuals not including the product champion (Please refer to Appendix A to learn more about the team, team dynamics etc.). My individual responsibility in terms of contribution to the team was to establish a strategic business plan, including a growth strategy for the project. Gaining funding is a critical part of any start-up’s growth (Ministry of Economic Development, 2007). Financial planning forces companies to think about their goals. A common goal most companies have is the goal to grow (Ross et al., 2002).  1.2 Objectives  The objective of this study was to identify the best suited funding sources, which I could then recommend “Auti” implement in order to help the company become a feasible, sustainable business. In order to make the most appropriate recommendations, I had to become financially literate. A study done in Canada found that weak financial literacy may be one of the biggest reasons start-up businesses do not succeed (Intuit, 2013).  1.3 Research questions  My thesis looks to answer three specific questions. Questions one and two are specific to my individual research conducted into the angel investment industry in New Zealand.  1) How do angel investors in New Zealand view the angel investment industry in New Zealand? 2) What do angel investors expect high-tech start-ups to have in place before they would consider investing?  Thesis question three is related to the main theory of the thesis.  3) How relevant is the “pecking order capital structure” theory to high-tech start-up companies in New Zealand?  1.4 Contribution  This thesis contributes to practice as well as theory. My interviews with angel investors are “practice led”, meaning that the research led to a new understanding about practice (Edmonds et al., 2006). In terms of my own research, a new understanding was formed on angel investment in New Zealand in 2014. Specifically, a common list of things angels throughout New Zealand look for in “high-tech” start-ups, before they would consider investing, was identified.  The main theory within this thesis is to do with the “pecking order capital structure”, in relation to high-tech start-ups, therefore contributing to research done around the pecking order theory.  1.5 Thesis layout  This thesis is a reflection of the two facets of research that I conducted. The two approaches used were action-based research and in-depth Interviews. Action-based research aims to contribute both to the practical concerns of people in an immediate problematic situation and to further the goals of social science at the same time (Gilmore et al., 1986). Action-based research, as mentioned in this thesis, looks into the process that was taken to find the best suited funding sources for our start-up, “Auti”. An in-depth interview was conducted with angel investors in New Zealand to get a better understanding of angel investment in New Zealand. Specific focus is put on “angel investment” in New Zealand as this is the preferred choice of start-up capital for “Auti”.  The thesis begins with a literature evaluation. The first section will evaluate funding source literature that influenced us to select angel investment funding as something we wanted to get a better understanding of. Further angel investment literature will be evaluated, including the gap in literature that my individual research into angel investment fills. Research question three looks to see if our start-up, “Auti”’s capital structure follows the “pecking order capital structure”, therefore there will also be a section within the literature review chapter that will include my main findings on past research, which has been conducted around the world, looking into if high-tech start-ups, such as “Auti”, follow the “pecking order capital structure”.  The definition of high-tech firms, also known as new technology based firms, is not clear, its application differs significantly depending on time, space, and authors (Laranja &Fontes, 1998; Fontes & Coombs, 2001). One way it has been defined by Little (1977) is “independent owned business established for not more than twenty-five years and based on the exploitation of an invention or technological innovation implying substantial technological risks”.  Following the literature review chapter, my research methodology is described, specifically with regards to my individual research into angel investment in New Zealand, explaining what I did, why, and problems that I faced. The thesis then follows with main findings from my individual qualitative research into the angel investment industry in New Zealand.  The thesis conclusion will have six main sections. Sections will cover whether or not my research supports the literature, what my research contributions are, and an implementation section (recommending start-up funding implications for “Auti”). As my individual research looked into the angel investment industry in New Zealand, a majority of the implementation will be specific to what the “Auti” team should do in respect to approaching angel investment in order to have a higher chance of gaining investment. My recommended start-up funding implications will then be compared to the pecking order capital structure to show that it follows that structure. A section will also look into the limitations that my research faced. The last section will be recommendations in terms of further research needed to be conducted in order to support my research conclusions.</p>

scholarly journals A High Tech Start-up’s Journey Towards Funding

2021 ◽  
Author(s):  
◽  
Anna Samoylova
Keyword(s):  
New Zealand ◽  
Literature Review ◽  
Capital Structure ◽  
High Tech ◽  
Pecking Order ◽  
Funding Sources ◽  
Start Up ◽  
Angel Investment ◽  
Start Ups ◽  
Angel Investors

<p>1.1 Masters background  As part of the “Masters in Advanced Technology Programme” each student had to select a high-tech start-up that they wanted to be involved in throughout the year. Each individual would bring value to the start up through their background and experience. The start-up I selected was an interactive robotic toy called “Auti”. Project champion, Helen’s envisioned goal was for the toy to help children with autism learn positive behaviours.  Our team consisted of two main individuals not including the product champion (Please refer to Appendix A to learn more about the team, team dynamics etc.). My individual responsibility in terms of contribution to the team was to establish a strategic business plan, including a growth strategy for the project. Gaining funding is a critical part of any start-up’s growth (Ministry of Economic Development, 2007). Financial planning forces companies to think about their goals. A common goal most companies have is the goal to grow (Ross et al., 2002).  1.2 Objectives  The objective of this study was to identify the best suited funding sources, which I could then recommend “Auti” implement in order to help the company become a feasible, sustainable business. In order to make the most appropriate recommendations, I had to become financially literate. A study done in Canada found that weak financial literacy may be one of the biggest reasons start-up businesses do not succeed (Intuit, 2013).  1.3 Research questions  My thesis looks to answer three specific questions. Questions one and two are specific to my individual research conducted into the angel investment industry in New Zealand.  1) How do angel investors in New Zealand view the angel investment industry in New Zealand? 2) What do angel investors expect high-tech start-ups to have in place before they would consider investing?  Thesis question three is related to the main theory of the thesis.  3) How relevant is the “pecking order capital structure” theory to high-tech start-up companies in New Zealand?  1.4 Contribution  This thesis contributes to practice as well as theory. My interviews with angel investors are “practice led”, meaning that the research led to a new understanding about practice (Edmonds et al., 2006). In terms of my own research, a new understanding was formed on angel investment in New Zealand in 2014. Specifically, a common list of things angels throughout New Zealand look for in “high-tech” start-ups, before they would consider investing, was identified.  The main theory within this thesis is to do with the “pecking order capital structure”, in relation to high-tech start-ups, therefore contributing to research done around the pecking order theory.  1.5 Thesis layout  This thesis is a reflection of the two facets of research that I conducted. The two approaches used were action-based research and in-depth Interviews. Action-based research aims to contribute both to the practical concerns of people in an immediate problematic situation and to further the goals of social science at the same time (Gilmore et al., 1986). Action-based research, as mentioned in this thesis, looks into the process that was taken to find the best suited funding sources for our start-up, “Auti”. An in-depth interview was conducted with angel investors in New Zealand to get a better understanding of angel investment in New Zealand. Specific focus is put on “angel investment” in New Zealand as this is the preferred choice of start-up capital for “Auti”.  The thesis begins with a literature evaluation. The first section will evaluate funding source literature that influenced us to select angel investment funding as something we wanted to get a better understanding of. Further angel investment literature will be evaluated, including the gap in literature that my individual research into angel investment fills. Research question three looks to see if our start-up, “Auti”’s capital structure follows the “pecking order capital structure”, therefore there will also be a section within the literature review chapter that will include my main findings on past research, which has been conducted around the world, looking into if high-tech start-ups, such as “Auti”, follow the “pecking order capital structure”.  The definition of high-tech firms, also known as new technology based firms, is not clear, its application differs significantly depending on time, space, and authors (Laranja &Fontes, 1998; Fontes & Coombs, 2001). One way it has been defined by Little (1977) is “independent owned business established for not more than twenty-five years and based on the exploitation of an invention or technological innovation implying substantial technological risks”.  Following the literature review chapter, my research methodology is described, specifically with regards to my individual research into angel investment in New Zealand, explaining what I did, why, and problems that I faced. The thesis then follows with main findings from my individual qualitative research into the angel investment industry in New Zealand.  The thesis conclusion will have six main sections. Sections will cover whether or not my research supports the literature, what my research contributions are, and an implementation section (recommending start-up funding implications for “Auti”). As my individual research looked into the angel investment industry in New Zealand, a majority of the implementation will be specific to what the “Auti” team should do in respect to approaching angel investment in order to have a higher chance of gaining investment. My recommended start-up funding implications will then be compared to the pecking order capital structure to show that it follows that structure. A section will also look into the limitations that my research faced. The last section will be recommendations in terms of further research needed to be conducted in order to support my research conclusions.</p>

Characteristics and Determinants of New Start-ups in Gujarat, India

2020 ◽  
Vol 1 (2) ◽  
pp. 1-25
Author(s):  
Ajay Kumar ◽  
Bhim Jyoti
Keyword(s):  
Sample Size ◽  
Regression Models ◽  
New Products ◽  
Small Sample ◽  
The Body ◽  
High Tech ◽  
Annual Sale ◽  
Factors Affecting ◽  
Start Up ◽  
Start Ups

Purpose: This study examines the relationship of socio-economic characteristics of start-ups with their size in Gujarat, India. It also assesses the determinants affecting the annual sale of start-ups. Methods: It includes primary information based on a survey of 120 founders of start-ups. Linear and semi-log linear regression models have been applied to assess the determinants of start-ups. Probit regression models have been considered to assess the factors affecting the annual sale of the start-ups. Results: Stage of start-up, the participation of founders in conferences, educational qualification, and new products launched by start-ups, professional connections of founders, source of funding, and support from incubator/accelerator/supporting organizations are found crucial determinants of start-up size in Gujarat. The annual sales of the start-ups are positively associated with stage of start-up, support from a mentor, team members, founder's academic qualification, and collaboration with national or international organizations, unskilled workers. Implications: Technology transfer and commercialization, development of new products, government regulations, the requirement of costumers, free rights for entrepreneurs, appropriate financial support for new entrepreneurs, transparency and clarity in government policies, the establishment of high-tech start-ups, and development of digital infrastructure, increase in R&D spending in research academia, and association of research institutions with entrepreneurs would be conducive to create an appropriate start-ups ecosystem and to reduce regional development disparities across Indian states. Subsequently, it would be helpful to increase sustainable development in India.  Originality: This study has used primary information of 120 founders of start-ups to assess the determinants, and the factors affecting annual sales of start-ups using the regression model in, Gujrat, India. Thus, it has an empirical contribution to the body of knowledge. Limitations: This study could not provide rational justifications on most factors that show an insignificant impact on start-ups due to the small sample size. Further research, therefore, may be considered to identify the association of start-up size with the variables using a large sample size in India.  

Human Resource Blueprints in Irish High-Tech Start-up Firms

2006 ◽  
Vol 20 (2) ◽  
pp. 111-121
Author(s):  
Mary A. Keating ◽  
Mariabrisa Olivares
Keyword(s):  
Empirical Study ◽  
Human Resources ◽  
Human Resource ◽  
Human Resources Management ◽  
High Tech ◽  
Entrepreneurial Firms ◽  
Resources Management ◽  
Start Up ◽  
Research Findings ◽  
Start Ups

Focusing on Irish high-tech start-ups, this paper reports on the results of an empirical study of organization building by entrepreneurial firms, specifically in relation to human resource practices. The research findings are benchmarked with findings from SPEC, the Stanford Project of Emerging Companies (Baron and Hannan, 2002). Human resources management and entrepreneurial research have rarely been combined in the literature and there is no distinct body of work in the area of human resource management in entrepreneurial firms.

Mergers and acquisitions in the hightech industry: a literature review

2013 ◽  
Vol 21 (1) ◽  
pp. 66-82 ◽  
Author(s):  
Matteo Rossi ◽  
Shlomo Yedidia Tarba ◽  
Amos Raviv
Keyword(s):  
Literature Review ◽  
Mergers And Acquisitions ◽  
Value Creation ◽  
Design Methodology ◽  
Business Development ◽  
Critical Examination ◽  
High Tech ◽  
Review Of Literature ◽  
Content Type ◽  
Start Ups

PurposeAs a result of the impressive wave of mergers and acquisitions (M&As) in recent years, operations that were traditionally considered to be extraordinary have become common business development options. M&As have produced mixed results for their stakeholders, which resulted in extensive economics debate, albeit without a systemic vision. As a result, the M&A literature has not yet developed a paradigm and the purpose of this paper is to present a review of the existing literature.Design/methodology/approachThe authors carried out a review of literature on M&As in technology‐driven sectors.FindingsThe critical examination of the innovation and value creation processes in M&As in hightech industry provides new insights for incumbent executives and can better plan and implement M&As deals.Originality/valueSince 1990 there has been a major expansion of M&As in high‐tech sectors, many involving the acquisition of small and young start‐ups. To address this important topic the authors present here a review of literature on M&As in technology‐driven sectors.

Financial Statement and Projection Preparation in Start-Up Ventures

2009 ◽  
Vol 84 (1) ◽  
pp. 27-51 ◽  
Author(s):  
Gavin Cassar
Keyword(s):  
Information Economics ◽  
Financial Statements ◽  
Financial Statement ◽  
High Tech ◽  
Economic Significance ◽  
Sales Forecasts ◽  
Start Up ◽  
Fundamental Uncertainty ◽  
Start Ups ◽  
Funding Level

ABSTRACT: Using a representative sample of entrepreneurs who are in the process of starting a business, this study investigates the determinants of the preparation of financial statements and projections in start-up ventures. Consistent with predictions from information economics and contracting, I find that the use of outside funding, level of competition, and venture scale are positively associated with the intended frequency of financial statement preparation. However, comparing the economic significance of alternative influences suggests that the benefit of reducing competitive and fundamental uncertainty is more influential in explaining variations in intentions to prepare financial statements. Further, I find the determinants of preparation frequency vary among different financial statements; for instance, cash statements are more important for start-ups with products in earlier stages of development and with greater competition. In contrast to financial statements, the preparation of projections such as formal financial projections and regular sales forecasts by start-ups is positively associated with the importance of intangible investments such as patents, research and development, and with start-ups in high-tech industries.

scholarly journals Comparing Bootstrapping High-Tech Start-Up Companies in the West and in a Transition Country

2020 ◽  
Vol 7 (1) ◽  
pp. 7-14
Author(s):  
Dragana Popovic Renella ◽  
Vojin Senk ◽  
Fuada Stankovic
Keyword(s):  
Essential Feature ◽  
High Tech ◽  
Information Feedback ◽  
Industrialized Countries ◽  
Transition Country ◽  
The West ◽  
Start Up ◽  
The One ◽  
Start Ups

This is a study of the process of the development of high-tech start-up companies through the mechanisms of bootstrapping in two extremely different environments: the one of highly industrialized countries, such as USA and Switzerland; the other of Serbia, which is a post-communist transition country with particular difficulties. The research method is the analysis of case studies. One case study of US and two of Swiss start-ups build the base for the analysis. All three cases show common patterns: from the very beginning, these companies sell R&D services in their fields of expertise; and using the cash from these early sales, and the information feedback from cooperation with the early customers, they develop their resources and, eventually, also their own high-tech products. The essential feature of this process is the selling of R&D services and the first products in the neighborhoods. Then also two cases of high-tech start-ups from Serbia are analyzed. Both Serbian start-ups are founded in partnership with small high-tech companies from highly industrialized countries (Switzerland and Germany). The Western partners use their reputations and contacts to enable the early sales of the Serbian start-ups in the industrialized countries. This is crucial for the Serbian start-ups, because they have no domestic market for R&D services. Apart of this element, all other essential patterns of the Serbian cases are very similar to those of the Western cases.

Enterprise survival in the high-tech community: persuasion and power in board decisions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ronit Yitshaki ◽  
Eli Gimmon ◽  
Susanna Khavul
Keyword(s):  
High Tech ◽  
Structured Interviews ◽  
Board Size ◽  
Term Survival ◽  
Long Term Survival ◽  
Content Type ◽  
Board Processes ◽  
Start Up ◽  
Start Ups

Purpose This study aims to examine the extent to which board size, the use of power by venture capital investors and entrepreneurs’ interpersonal tactics such as persuasion to sway board decisions, influence the long-term survival of start-ups. Design/methodology/approach This study used a mixed-methods approach. The quantitative part is based on data collected from 179 chief executive officers (CEOs) of high-tech start-ups community financed by venture capitalists (VCs) in Israel of which 59 did not survive. To achieve a better understanding of these findings, semi-structured interviews with 12 entrepreneurs were conducted. Findings Smaller boards were positively associated with venture survival. The use of power by VC investors positively influenced start-up survival. CEO persuasion had a negative effect on venture survival; however, its interaction with board size suggests that it had a lesser effect on very small boards. Practical implications Although investors’ control over decision-making contributes to long-term survival, entrepreneurs should be aware of the possible detrimental effects of exercising a high level of persuasion in board processes. The findings also suggest that a small board size is preferable for start-up survival. Originality/value Exploring the effect of board processes on venture survival is considered complex. A unique sample of high-technology start-ups consisting of both surviving and failed start-ups was analyzed to explore the effects of persuasion and power in board processes.

scholarly journals Start-Up Nation

2017 ◽  
Vol 31 (3) ◽  
pp. 350-388 ◽  
Author(s):  
Steven Fraiberg
Keyword(s):  
Technical Communication ◽  
High Tech ◽  
High Tech Industry ◽  
Methodological Nationalism ◽  
Start Up ◽  
The World ◽  
Per Capita ◽  
Actor Networks ◽  
Coworking Spaces ◽  
Start Ups

This study focuses on start-up entrepreneurs on the move—in coordination with an array of other actors—as they weave and are woven into transnational networks. Central to this study is a shift from activity to mobility systems. Building on technical communication scholarship, the frame integrates actor networks and activity theory knotworks. Disrupting workplace and national container models (methodological nationalism), the analysis is grounded in a study of Israeli start-up entrepreneurs. Dubbed the Start-Up Nation, Israel contains more start-ups per capita than any other country in the world, with its high-tech industry made up of a dense ecosystem of conferences, accelerators, meetups, social media, and coworking spaces. Tracing actants’ trajectories across this social field, the author argues for a conceptualization of entrepreneurs as knotworkers who mobilize genres, modes, languages, and spaces.

When the going gets tough, do the tough get going? The pre-entry work experience of founders and high-tech start-up survival during an industry crisis

2010 ◽  
Vol 29 (6) ◽  
pp. 626-647 ◽  
Author(s):  
Luca Grilli
Keyword(s):  
Work Experience ◽  
Theoretical Perspective ◽  
High Tech ◽  
Specific Work ◽  
Start Up ◽  
Technology Services ◽  
Information And Communication ◽  
Econometric Analyses ◽  
Start Ups ◽  
Boom Period

This article explores the possibility that under an intensely negative industry-specific shock, the positive relationship between the human capital of founders and the survival prospects of start-up businesses may actually be negative. Starting from a theoretical perspective to derive testable hypotheses, the study examines a sample of 179 Italian start-ups operating in the information and communication technology services market created during the boom period from 1995 to early 2000. Econometric analyses provide evidence that, during an intense industry crisis (that is, early 2000 to 2003) entrepreneurs with a substantial amount of prior work experience may pursue an exit strategy. This also highlights the importance of distinguishing between different types of work experience and different exit routes: founding teams with highly specific work experience show a higher probability of pursuing mergers and acquisitions (M&A), while a higher level of generic work experience is found to be more conducive to firm closure.

scholarly journals Pengujian Trade Off Theory dan Pecking Order Theory di Jakarta Islamic Index

2018 ◽  
Vol 10 (2) ◽  
pp. 90
Author(s):  
Ira Wikartika ◽  
Zumrotul Fitriyah
Keyword(s):  
Capital Structure ◽  
Order Theory ◽  
Funding Decision ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Funding Sources ◽  
Decision Variables ◽  
Fixed Assets ◽  
Study Population

The operations of the company are always faced with the problem of meeting the needs of funds. Company funding is closely related to the selection and combination of internal funding sources and external funding sources. The funding decision of the capital structure determines the company in carrying out its operating activities that affect the company's value. There are two perspectives in determining the funding decision of capital structure, namely trade-off theory and pecking order theory. This study aims to analyze the effect of capital structure funding decision variables according to the perspective of trade-off theory and pecking order theory on funding decision of capital structure. The study population used companies listed in the Jakarta Islamic Index. The sample used is 30 companies during the period of June to November 2016.  The result shows that according to trade-off theory, firm size and growth influence to leverage, but tangible fixed assets and profitability have no effect on leverage. While according to pecking order theory perspective, it shows that only variable of growth that influence to leverage. Thus it can be concluded that companies in Jakarta Islamic Index tend to follow trade-off theory perspective.

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