Global Entrepreneurship Institute

Microfinance Grows Up: Success Brings New Challenges for Investors, Practitioners, in Emerging Economies
Microfinance — the business of providing financial services in small transaction amounts to poor, underserved markets — has taken off in recent years. With financial sectors in many developing countries maturing and microfinance institutions (MFIs) themselves growing rapidly, capital markets have been quick to enter the fray, providing ample funding for expansion. But microfinance’s evolution in countries throughout Asia and Eastern Europe has cast a spotlight on changes now buffeting the industry as private investors arrive in force and traditional microfinance values are questioned.
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Perfecting Your Fast Pitch and Your Email Quickview

What makes fund-raising so hard is not only understanding this process, but also at the same time putting your deal into a package that can be communicated and shared quickly and efficiently. Venture capitalists, especially those that focus on financing early stage ventures, get carpet-bombed with packages outlining business concepts at various stages of development. Continue reading ‘How to Prepare your Fast Pitch for Investors’ »

Entering Into a Relationship With a ”Matchmaker” May Pose Risks 

There are an increasing number of online “matchmaker” services that “find” venture capital and angel investors for entrepreneurs. The characteristic that these “finders” all share is their preferred method of being compensated. It is a fee that usually consists of a percentage of the money raised. Continue reading ‘Be Careful Using a “Matchmaker” to Help You Raise Money’ »

The Venture Impact Report

Published by the National Venture Capital Association (NVCA), Venture Impact takes a look at the economic impact of venture backed companies. This study looks at the contribution venture backed companies have had on overall job creation, revenue creation and innovation over the last 30 years.

NOTE: This is an Adobe PDF file. Download the Report in PDF

Barriers to Foreign Direct Investment Under Political Instability

This article describes some stylized facts about expropriation of Foreign Direct Investment (FDI) and develop a theory that relates direct and indirect forms of expropriation to the degree of political instability (the frequency at which groups alternate in power) and concentration of power (the number of powerful groups affecting policy). Continue reading ‘Barriers to Foreign Direct Investment (FDI)’ »

Angel Investors in Groups Achieve Investment Returns In Line with Other Types of Equity Deals

This report was conducted over the past year and analyzed results from 86 organized angel investor groups throughout the United States, involving 538 individual angel group investors who have experienced more than 1,130 exits in which companies that had received the investments were acquired, went public, or were closed. Continue reading ‘Report: Angel Investor Groups’ »

Uncovering Knowledge Structures of Venture Capital Investment Decision Making 

Pankaj Patel and Rodney D’Souza, doctoral students at the University of Louisville, have received the fifth annual “Best Doctoral Paper” award from the Office of Advocacy of the U.S. Small Business Administration. They presented their winning paper, Uncovering Knowledge Structures of Venture Capital Investment Decision Making, at the annual meeting of United States Association for Small Business and Entrepreneurship (USASBE). Continue reading ‘Venture Capital Investment Decision Making’ »

Quickview At Understanding the Venture Capital Industry

We present answers to some of the most popular questions entrepreneurs have about venture capitalist.
>>See Also Special Guide: Venture Capital, Special Guide: Creating Your Business Plan

Continue reading ‘Venture Capital: Frequently Asked Questions’ »

Special Guide for Raising Money From Venture Capitalists and Angel Investors 

Is your company “really” investor ready? Do you know how to market and sell to outside investors? Do you have a sound financing strategy? Here is what Anita Roddick, founder of The Body Shop, once said: “There are only two ways of raising money: the hard way and the very hard way.”

Continue reading ‘Special Guide: Raising Venture Capital’ »

Web Resources: Venture Capital and Angel Investors 

We share with you some of the key Web Resources we have referenced, and used in our research, presentations, conferences and books. Continue reading ‘Venture Capital and Angel Investors’ »

Our detailed outline simply follows the content and approach of our online resources. We recommend that the total length of your business plan be no more than 15 to 20 pages. Each Value Driver should be one page (10 total pages) with 3 to 5 paragraphs for each page. Your financial section should be limited to 3 to 5 pages (the notes and assumptions can be embedded on the spreadsheets) and your Executive Summary should also be 3 to 5 pages.

Continue reading ‘Business Plan Outline’ »

Discussions About Alternative Sources of Financing

We realize that not all companies are venture-fundable. As we first discussed in a previous Articles, venture capital is a unique form of financing and needs these three elements in a deal: It must have rapid growth, get really big sooner rather than later, and remain profitable for a long time. Our Web site is not intended to explore and discuss other sources in great detail. But we do intend to give a broad view of this topic and refer you to additional resources. Continue reading ‘What are some alternative sources of financing?’ »

What Makes a Great Venture Capitalist?

Now that you know and understand the specifics of your business—you know your numbers cold, you have the financials prepared, you understand how much you need, and grasp the fundamentals of valuation—it is about finding and evaluating the right investors for your specific deal. But navigating through the universe of investors can be confusing, even for the most experienced entrepreneurs. Continue reading ‘How do you know you have the right investor?’ »

How to Value Your Deal Like an Investor

One of the entrepreneur’s most difficult challenges is assessing and determining a value for the emerging growth venture. Simply put, value is determined by the interaction of three major ingredients: cash, risk, and time. Valuation depends mainly on understanding the venture, its industry, and the general economic environment, combined with a very prudent job of forecasting. Investors know that careful thought and hard work leads to foresight. Continue reading ‘How to value your deal like an investor?’ »

Managing in High-Growth Environments

When a venture reaches Stage Five on the entrepreneurial life cycle, Full Launch and Growth, the venture team needs to be sensitive to certain high-growth management issues. Usually, rapid growth is seen as a positive sign of success. However, uncharted rapid growth can quickly change the status of an emerging growth venture from profitable to bankruptcy. Continue reading ‘How will you manage in the high-growth environment?’ »

Building Organizational Change Capabilities

It takes little time to destroy a high growth-potential venture. One turn-around expert says, “Ninety-five percent of the failures are due to internal problems. I can’t tell you how many companies I’ve been to that have the fast-growing-company plaque on the wall and are about to go under. They don’t have the systems and the people in place. Accounting is lagging. Purchasing is not done in the most efficient manner. Inventory gets out of control. All of a sudden, all these mistakes compound, and the least little burp kills them.” Continue reading ‘Is your company ready for your growth strategy?’ »

How to Start Preparing Your Cash Budget Table

Entrepreneurs who fail with their first venture almost always put the blame on lack of capital, saying they were undercapitalized. But all too often we hear about entrepreneurs who create wildly optimistic sales projections, to cover their fear of failing, and then go out and spend their money on noncritical capital resources like fancy offices, computer systems, new cars, global-travel, slick brochures, and launch parties. Continue reading ‘What is a cash budget table?’ »

Discussions About Surving the Perfect Storm 

Returns have retreated from the record levels we saw during the Perfect Storm. As with the public markets, private equity returns also suffered a downfall in 2001 as measured by one-year returns. At the end of December 2001, each of the private equity sectors discussed above showed negative one-year returns ranging from a -3.5 percent to -33 percent. And for the first time since 1994, venture capital investment activity in 2001 actually declined from the previous year, dropping 62 percent from $106 billion in 2000 to $41 billion in 2001. Continue reading ‘What did investors learn from the Perfect Storm?’ »

Discussions About The Food Chain Of Entrepreneurs

Not all venture capitalists invest in start-ups and early-stage ventures. Venture capital firms have different preferences and practices, including how much money they will provide, where in the entrepreneurial life cycle they prefer to invest, and the cost of capital or expected annual rate of return they are seeking. The sources of capital change dramatically for entrepreneurs at different stages of development and rates of growth. Continue reading ‘What are the stages of a company in the food chain?’ »

Understanding the Selection Process With Investors

Venture capitalists mitigate the risk of venture investing by developing a portfolio of companies in a single venture fund. They invest in a small percentage of the business plans that get placed and reviewed at their firms. When considering an investment, they carefully screen the technical and business merits of the deal before them. Continue reading ‘How does a venture capital firm screen deals?’ »