Financing and Business Development for Hard Tech Startups

Startup India - A New Paradigm for Young Entrepreneurs (A Conceptual Study)

PurposeThis paper provides a structural model to value startup companies and determine the optimal level of research and development (R&D) spending by these companies.Design/methodology/approachThis paper describes a new variant of float-the-money options, which can act as a financial instrument for financing R&D expenses for a specific time horizon or development stage, allowing the investor to share in the startup's value appreciation over that duration. Another innovation of this paper is that it develops a structural model for evaluating optimal level of R&D spending over a given time horizon. The paper deploys the Gompertz-Cox model for the R&D project outcomes, which facilitates investigation of how increased level of R&D input can enhance the company's value growth.FindingsThe author first introduces a time-varying drift term into standard Black-Scholes model to account for the varying growth rates of the startup at different stages, and the author interprets venture capital's investment in the startup as a “float-the-money” option. The author then incorporates the probabilities of startup failures at multiple stages into their financial valuation. The author gets a closed-form pricing formula for the contingent option of value appreciation. Finally, the author utilizes Cox proportional hazards model to analyze the optimal level of R&D input that maximizes the return on investment.Research limitations/implicationsThe integrated contingent claims model links the change in the financial valuation of startups with the incremental R&D spending. The Gompertz-Cox contingency model for R&D success rate is used to quantify the optimal level of R&D input. This model assumption may be simplistic, but nevertheless illustrative.Practical implicationsOnce supplemented with actual transaction data, the model can serve as a reference benchmark valuation of new project deals and previously invested projects seeking exit.Social implicationsThe integrated structural model can potentially have much wider applications beyond valuation of startup companies. For instance, in valuing a company's risk management, the level of R&D spending in the model can be replaced by the company's budget for risk management. As another promising application, in evaluating a country's economic growth rate in the face of rising climate risks, the level of R&D spending in this paper can be replaced by a country's investment in addressing climate risks.Originality/valueThis paper is the first to develop an integrated valuation model for startups by combining the real-world R&D project contingencies with risk-neutral valuation of the potential payoffs.

We use confidential and restricted-access data from the Kauffman Firm Survey and matched administrative data on credit scores to explore racial disparities in access to capital for new business ventures. The novel results on racial inequality in startup financing indicate that blackowned startups start smaller and stay smaller over the entire first eight years of their existence. Black startups face more difficulty in raising external capital, especially external debt. We find that disparities in credit-worthiness constrain black entreprenuers, but perceptions of treatment by banks also hold them back. Black entrepreneurs apply for loans less often than white entrepreneurs largely because they expect to be denied credit, even when they have a good credit history and in settings where strong local banks favor new business development.

In newly collected data on 46 economies over 1990–2011, we show that financial development since 1990 was mostly due to growth in credit to real estate and other asset markets, which has a negative growth coefficient. We also distinguish between growth effects of stocks and flows of credit. We find positive growth effects for credit flows to nonfinancial business but not for mortgage and other asset market credit flows. By accounting for the composition of credit stocks and for the effect of credit flows, we explain the insignificant or negative growth effects of financial development in recent times. What was true in the 1960s, 1970s, and 1980s when the field of empirical credit‐growth studies blossomed, is no longer true in the 1990s and 2000s. New bank lending is not primarily to nonfinancial business and financial development may no longer be good for growth. These trends predate the 2008 crisis. They prompt a rethink of the role of banks in the process of economic growth. (JEL E44, O16, O40, C33)

The research method is the substantiation of the category «international tourism» based on the theoretical analysis of domestic scientists, the analysis of the main factors and factors that influence the formation of international tourist flows and the development of the tourism industry. The article proves that the influence of external and internal factors can have positive and negative results. It has been proven that static factors are unchanged over time, while dynamic factors can change. The influence of external factors is manifested through social, economic and political changes, and internal factors are influenced through market relations. External factors affect tourism through: demographic and social changes; economic and financial development; changes in political and legal regulation; technological changes; trade development; transport infrastructure; travel safety. Internal factors are primarily market factors: supply and demand processes; segmentation of the market in which the tourist product is developed; actual marketing; tourism private sector; human factor. All factors affecting the development of the international market tourist services, conditionally divided into two main groups: factors acting independently of the activities of industry organizations tourism (motivational, economic, political, geographical, social, ecological); factors contributing to the development of tourism, which are actively used tourist organizations in their activities (scientific and technical potential). Assessing the country's international competitiveness tourist market, it is necessary to take into account and investigate the following criteria: resource potential of the country; trends that are relevant in the business environment and development tourist infrastructure; the state of the political and legal framework for the regulation of international tourism in country.

The French private equity ecosystem is characterised by the presence of Bpifrance, a state investment bank (SIB) which has structured and streamlined the sector since its creation in 2013. On the demand side, this research questions the influence of Bpifrance, as a direct public investor with sustainable venture capital objectives for environmental and social public good. France’s venture capital market is examined on the length of time between early-stage venture capital funding rounds and the ability of funded ventures, including those with deep tech and sustainable development goals (SDGs), to progress along the stages of the finance escalator. To answer this question, data was collected from Dealroom, a platform that provides investment information on a large number of startups in different countries over their lifecycle. An event history analysis is conducted on a sample of 3741 French ventures that raised their first seed funds between 1990 and 2023. The results confirm the impact of Bpifrance and the various public programmes that accompanied it on the structuring of the French venture capital ecosystem. On the other hand, the results question the ability of Bpifrance to support start-up companies with disruptive social and/or environmental innovations that require patient capital and significant risk-taking.

Effects of venture debt on early- and late-stage funding of tech startups in tech ecosystems

Since the energy-crisis days of the early 1970's, the United States' economy has been gradually moving from reliance on manufacturing operations to a reliance on service industries. This shift has lead to an abundance of opportunities in the area of small business development. In response to these opportunities, the small business sector has undergone substantial growth. One problem associated with this growth is the procurement of financing for small business startups. Since most entrepreneurs do not have the financing options available to large corporations, the majority of small business startups involve owner bank borrowing, often with the assistance of the Small Business Administration (SBA). Many SBA loans fail. Although the reasons for failure are as diverse as the businesses themselves, one reason often cited is that small business owner/managers do not understand the informational content of accrual based financial statements. As a result, they are not able to react to the changes taking place within their businesses which are communicated to them through their balance sheets and income statements. The purpose of this study was to test whether a training intervention for financial statement risk identification could help small business owners to better understand their financial statements. A sample of 80 small business owner/managers were invited to attend a small business seminar. The sample was divided into two groups. The experimental groups received training, while the control group received a placebo treatment. A pretest-posttest experimental design was used. Attitudinal and demographic data was also gathered to determine what effect these factors had on success in training. Results of the experiment indicated that the experimental group which received the training had a significantly higher level of financial statement understanding as measured by the posttest scores. The analysis of the demographic data indicated that the training was effective across all levels of age, income, race, social background and years of management experience gathered. Of the attitudinal variables measured, only the "job involvement" was a significant predictor of success in training. The results of this study suggest that perhaps training in financial statement analysis should be a prerequisite to SBA lending.

Startups have served as one of the Thai government’s mechanisms for promoting economic stability and growth. The health tech startup is a global trend toward new innovative industries. In Thailand, there are many health tech startups born each year. However, the healthcare business characteristic and business model differing from other businesses urge the need to understand the relevant factors of success. This knowledge can help you lower your chances of failing and enhance your chances of succeeding. The success elements that influence success, as well as the ones that are most crucial for health tech firms, were investigated in this study. This research used quantitative methodologies to create a systemic approach. The researchers used data from 240 samples to assess basic statistics and confirmatory second-order factor analysis based on the idea of latent variables in Structural Equation Modeling (SEM). It was found that health tech startups in Thailand can be successful because of 6 elements, which are government policy, startup support, human capital, market, finance, and culture. Culture is the most influential factor, followed by startup support, human capital, market, government policy, and finance. It's worth noting that tax relief and low-interest financing aren't high on the priority list. Internal elements such as entrepreneurial inspiration or knowledge, experience, and product prominence, on the other hand, take precedence.

This study takes Industrial Bank as a case to deeply analyze its practices in promoting green finance development through sustainable development bonds. First, the paper explores the fundamental concepts and current development of green finance and sustainable development bonds, elucidating the growth trends in the global green finance market. Next, by conducting a detailed analysis of the issuance process of Industrial Bank's sustainable development bonds, the paper evaluates the impact of these bonds on the bank's business, market feedback, and the development of the green economy. In addition, the paper examines Industrial Bank's measures in risk management and innovation strategies, and through a comparison of green finance practices domestically and internationally, provides insights for other commercial banks on advancing green finance. The results show that Industrial Bank has effectively expanded its green finance business through sustainable development bonds, providing strong support for China's green economic transition.

Indonesia's first Islamic bank, Bank Muamalat Indonesia, was established in 1991. Since then, the institutional base of the Islamic economy in Indonesia has expanded rapidly. This sector now covers not only the conventional banking and financial sector, but also zakat management organisations, sharia economy training institutions and professional business associations. The microfinance institutions known as Islamic saving and loan cooperatives (BMTs) are one of the fastest growing areas of Islamic finance. They provide financial services to small and mediumsized businesses and the poor, as well as being a source of professional jobs for middle-class Muslims. The number of BMTs increased from just one in 1992 to 1,957 in 1999 (Lubis 2004). The newly formed Association of Indonesian BMTs (Asbindo) estimates that 3,200 BMTs were in operation in 2006. What is remarkable about BMTs is that their development has been supported largely by individuals and private organisations rather than the government, which was the prime mover behind the development of Indonesia's commercial microcredit business. As Antonio observes in Chapter 14 of this book, their success demonstrates that microlending can be carried out profitably and sustainably. The World Bank (2005) finds that microlending is an effective way of supporting small and medium-sized enterprises. It estimates that 50 per cent of Indonesian households may still lack access to the credit they need to fund their enterprises, despite the numerous microcredit schemes facilitated by the Indonesian government since the early 1980s. Despite the intriguing financial success of BMTs, there have been very few social studies on the Islamic economy, especially Islamic microfinance, in Indonesia. With the exception of Hefner (2003), who describes the vision shared by the founders of Bank Muamalat Indonesia, previous studies have focused on the theological foundations of the Islamic financial system and the legal and institutional development of Islamic finance (Effendy 2005; Lubis 2004; Salim 2003). My interest here is in examining the perceptions of those who are directly involved in providing or obtaining Islamic microfinance. Why do people start a BMT? Why do people work for BMTs? Why do people use them?

With the rapid development of Internet technologies such as social networking, big data, cloud computing, and search engines, with the support of Internet research, innovation and development of new technologies, the development speed of Internet finance has also reached its peak. Various institutions, including traditional financial institutions and Internet companies, have entered the Internet financial industry one after another, through the development of new businesses to achieve financial communication, payment services and information intermediary. The purpose of this article is to study the application of big data information processing technology for the Internet financial system. This article starts with the importance of the development of Internet finance and the risks it faces, and proposes the establishment of a new and complete credit investigation system for Internet finance. This article uses cloud computing and BP neural network and other technologies and algorithms to try to establish a more complete credit evaluation model. Based on various basic information of enterprises and individuals, combined with enterprise service operations and personal online behaviors, quantitative analysis and evaluation are carried out. This article puts forward countermeasures and suggestions such as establishing a protection mechanism in line with big data credit investigation, constructing a diversified basic database, improving society's awareness of big data credit investigation, promoting the open sharing of government and social information resources, and attaching importance to the use of big data supervision. Experimental research shows that it takes only about 26 seconds to calculate a sample using this model, and the efficiency is several orders of magnitude higher than the efficiency of manual review

La presente investigación tuvo como objetivo, demostrar que la gestión del financiamiento influye en el desarrollo de las micro y pequeñas empresas (MYPE) manufactureras de la región Huánuco en el 2017. Fue una investigación de enfoque cuantitativo, aplicada, analítica, longitudinal y de diseño cuasi experimental. La población fue de 1,722 MYPES, y de ellas se seleccionaron 50 por muestreo no probalístico a conveniencia del investigador. En la recolección de datos, se utilizó una entrevista de características generales y un cuestionario de conocimiento de la gestión del financiamiento y de desarrollo empresarial, validado y con 0.8 de confiabilidad. Se aplicaron las consideraciones éticas para la investigación. Los resultados muestran que las dimensiones: necesidad de financiamiento, elección del proveedor financiero, gestión de los desembolsos y el acceso al crédito en el pre test fueron consideradas en la frecuencia de raramente; en el pos test hubo cambios hacia la frecuencia de siempre o a veces. El desarrollo de las MYPE en el pre test fue evaluado como moderado por 44% del grupo experimental. En el grupo control un 72% lo consideraba mínimo. En el post test, en la mayoría del grupo experimental, predominó el nivel de desarrollo moderado (80.0%) y 12% del grupo control, alcanzó el nivel moderado. Según la prueba t-Student se obtuvo t = 24.699, p 0,000, siendo las diferencias de promedios significativas, observándose mayor desarrollo en el grupo experimental y se concluye que la aplicación de la gestión del financiamiento desarrolla las MYPE manufactureras, por lo que se considera factible de aplicación.

To promote the theoretical research and business development of intellectual property pledge financing, this paper summarizes the research status of multi-agent game in intellectual property pledge financing. At present, scholars’ research on multi-agent game in intellectual property pledge financing mainly focuses on the game between borrowers and lenders, the game between lenders and third-party intermediaries (or platforms), and the game between borrowers, lenders and third-party intermediaries (or platforms). Overall, scholars have conducted extensive research on the game between borrowers and lenders, while research on the game between borrowers, lenders, and third-party intermediaries (or platforms) is relatively weak. Especially when the government implements financial subsidies and interest subsidies for borrowers, financial subsidies for third-party intermediaries (or platforms), and risk compensation for lenders, there is a lack of research on the intellectual property pledge financing game with the government as an independent game subject. Future research can focus on the game between borrowers, lenders, and the government under government incentives, as well as the game between borrowers, lenders, third-party intermediaries (or platforms) and the government under government incentives.

The start-up business in Indonesia is growing with the emergence of many new start-up companies in various fields such as technology, finance, health, and so on. Start-up companies are also increasingly seen as a sector that has great potential to become the engine of Indonesia's economy in the future, to support the growth of start-up companies, one of the strategies that is usually carried out is to carry out an Initial Public Offering (IPO). This research will help fill in the gaps in the literature on external factors influencing a company's decision to go IPO. Thus, it is hoped that the results of this research can make a positive contribution to the development of start-up businesses in Indonesia and assist start-up companies in making the right decisions regarding IPOs. The population in this study are all start-up companies in Indonesia. The samples in this study are Gojek, Grab, Ovo and Shoppe. This study used a purposive sampling technique. The sample in this study is 108. The data analysis technique in this study uses PLS with the results of the research that financial performance has a positive effect on a company's decision to conduct an Initial Public Offering (IPO), company size has a positive effect on a company's decision to conduct an Initial Public Offering (IPO). ), capital market conditions have a positive effect on a company's decision to conduct an Initial Public Offering (IPO), and government policies have a positive effect on a company's decision to conduct an Initial Public Offering (IPO).