Exploring Venture Funding in the Entrepreneurial University

This chapter considers the role of venture funding in the entrepreneurial university. It begins by discussing the literature on the entrepreneurial university, focusing on the role of financing. The literature shows that there are gaps in the financing of academic and graduate ventures. The second part of the chapter introduces short case examples that illustrate different forms of university-led venture funding, demonstrating how different universities have sought to fill funding gaps by means of seed capital grants, micro-financing, small business research grants, crowdfunding, social impact investing, seed capital investing, public venture capital, and venture capital. The chapter concludes by arguing that universities have sufficient resource endowments and human capital to address many funding gaps through innovative thinking and practice.

Is there a gender gap in equity-based crowdfunding?

Compared to their male peers, female entrepreneurs tend to face greater obstacles in raising venture funding from business angels, venture capitalists, and financial institutions. In this paper, we investigate whether this gender gap also exists in equity crowdfunding. Based on data from the German equity crowdfunding market, we find that ventures with and without female managing directors are equally successful in raising capital when launching their first equity crowdfunding campaign. In contrast, the former are significantly less successful than their peers in seasoned equity crowdfunding campaigns, and this disparity cannot be fully explained by differences in other venture-related or entrepreneur-related characteristics. However, we also find that the gender gap in seasoned offerings narrows if female entrepreneurs set more ambitious funding thresholds. Overall, our results indicate that pitching their equity crowdfunding campaigns in a more promotion-oriented way is a sensible strategy for female entrepreneurs to improve funding success.

Venture financing in the era of increasing epidemiological risks

The relevance of the study of venture financing development in the era of increasing epidemiological risks is considered within the current situation in society, namely the significant impact of COVID-19 on all sectors of social and economic development. This shows the urgency of a systematic justification of current trends and peculiarities of venture financing development, taking into consideration the COVID-19 situation. The above-mentioned aspects define the purpose of our study. The theoretical basis of our study means the analysis of the specifics and priorities of venture financing, considering the timeframe from venture financing formation to nowadays. Thus, the stages of evolution of views on venture financing are highlighted. The article examines the dynamics of venture financing globally, as well as the change of relevant indicators in Europe, Asia and the United States. In particular, along with the analysis of the total amount of venture financing in each of the considered markets, the volumes of venture financing agreements that were carried out for the first time were estimated. This allowed us to analyze the relevant trends and make conclusions on the priority objects for attracting the resources of venture investors in the era of growth of epidemiological risks, depending on the experience of venture capitalists. The article compares venture funding and the incidence of COVID-19 in some countries in Europe, Asia and the United States. The approaches of European experts to the assessment of the impact of COVID-19 on venture financing are revealed. The analysis of the relevant calculations provides the possibility to structure the priorities of modern venture investors depending on the sectoral distribution of COVID-19 influences. The practical value of the study is considered within a comprehensive analysis of trends in venture financing and assessment of changes in the priorities of venture investors, considering the increasing epidemiological risks. The research may be useful both in the context of developing public venture financing policies and within developing venture financing strategies at the business level.

The Role of Political Values and Ideologies of Entrepreneurs and Financiers

We examine how entrepreneurs’ political values affect their ventures’ stakeholder orientation, and how this orientation affects venture funding. We also show how the political ideologies of financiers influence their investment choices and relationships with entrepreneurs. Using a sample of 652 ventures backed by 332 financiers and information on political values and ideologies of entrepreneurs and financiers, along with text-based analyses of documents to infer stakeholder orientation, we find ventures with a narrow orientation obtain more funding than those with a broader orientation, and this relationship is moderated by financiers’ political ideologies. The findings have implications for stakeholder theory in entrepreneurship.

Biased sampling of early users and the direction of startup innovation

Using data from a prominent online platform for launching new digital products, we document that the composition of the platform's `beta testers' on the day a new product is launched has a systematic and persistent impact on success. Specifically, we use word embedding methods to classify products launched on this platform as more or less focused on the needs of female customers, and show that female-focused products launched on a typical day—when nine-in-ten users on the platform are men—experience 40% less growth and are 5 percentage points less likely to have an any users a year after launch. Using exogenous variation driven by the platform's daily newsletter, we find that that the product gender gap shrinks on days when women are more likely to engage with the platform. Conversely, entrepreneurs who happen to launch a female-focused product on an especially male-dominated day reduce their product development efforts by roughly 30% and are 4 percentage points less likely to raise venture funding. Overall, our findings suggest that sample bias can systematically corrupt signals of a startup's market potential, bias entrepreneurial strategy, and so lead to a dearth of innovations aimed at consumers who are underrepresented among early-users.