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Dilemma of new entrepreneurs in fund-raising strategies


A. Rahman, Badruddin (2010) Dilemma of new entrepreneurs in fund-raising strategies. In: The First Seminar On: Entrepreneurship and Societal Development in Asean (ISE-SODA 2010) "Achieving Regional Growth through Entrepreneurship Education", 27th February-1st March 2010, City Bayview Hotel Langkawi. ASEAN Universities Consortium of Entrepreneurship Education (AUCEE), pp. 284-296. ISBN 983-2078-36-4

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Abstract

Venture capitalists (VCs) receive many business plans and proposals, sometimes 100 or more a month. However, they typically reject 98% of opportunities presented especially by young companies.Perhaps this may be due to the lack of understanding or the inability of entrepreneurs(of the young companies) to fulfill the three basic principles of entrepreneurial finance: (a) More cash is preferred to less cash (b) Cash sooner is preferred to cash later; and (c) Less risky cash is preferred to more risky cash. It is almost a pre-requisite for venture capital industry to supply capital and other required resources to entrepreneurs who are in high potential business, in hoping that a high rate of return on invested funds can be realized. Specifically. VCs' assessment of probability of survival is significantly higher for ventures facing high key success factor stability, that are late followers, have long lead times, low competitive rivalry, high educational capability, and high industry related competence. These factors may contribute to dilemma of new entrepreneurs in their fund-raising strategies.

Item Type: Book Section
Additional Information: This seminar is collaboration between The Co-operative and Entrepreneurship Development Institute (CEDI) of Universiti Utara Malaysia; National Entrepreneurship Institute (INSKEN); Universiti Padjajaran (UNPAD), Bandung; Universiti Komputer Indonesia (UNIKOM) and Prince Songkla of University (PSU), Thailand.
Subjects: H Social Sciences > HB Economic Theory
Divisions: School of Business Management
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 29 Apr 2011 08:38
Last Modified: 24 Apr 2016 01:26
URI: http://repo.uum.edu.my/id/eprint/2985

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