Management and Organizational Studies 1023A/B Chapter Notes - Chapter 7: Underwriting, Retained Earnings, Comparative Advantage

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Barry Hawn

Document Summary

Bootstrapping: although governments can do a lot to foster new business development, they generally can do little to provide the equity capital and he initial support that new businesses need during their start up phase. How new businesses get started: started by an entrepreneur, the entrepreneur makes their ideas operational through informal discussions with people whom the entrepreneur respects and trust, such as friends and early investors. Initial funding of the firm: bootstrapping: to accomplish something on your own. Venture capital: venture capitalists are individuals or firms that help new businesses get started and provide much of their early-stage financing. Individual venture capitalist/ angels/angel investors: typically wealthy individuals who invest their own money in emerging businesses at the very early stages. Informational asymmetry problems: this is why many investors find it difficult to participate directly in the venture capital market. In-depth knowledge: redu(cid:272)es (cid:396)isk i(cid:374) the t(cid:455)pi(cid:272)al (cid:448)e(cid:374)tu(cid:396)e (cid:272)apitalist"s i(cid:374)-depth knowledge of the industry and technology.