Entrepreneurs face challenges in accessing funding for their ventures from "summary" of Developments in Entrepreneurial Finance and Technology by Audretsch, David B.,Belitski, Maksim,Rejeb, Nada,Caiazza, Rosa
Accessing funding for their ventures is a critical challenge that entrepreneurs often encounter. This challenge arises due to various factors, including the high level of risk associated with entrepreneurship, the lack of collateral that entrepreneurs can provide to secure funding, and the information asymmetry between entrepreneurs and investors. One of the main reasons why entrepreneurs face challenges in accessing funding is the high level of risk inherent in entrepreneurial ventures. Investors are often hesitant to provide funding to entrepreneurs due to the uncertainty surrounding the success of their ventures. This risk aversion on the part of investors can make it difficult for entrepreneurs to secure the funding they need to start or grow their businesses. Another factor that contributes to the challenge of accessing funding is the lack of collateral that entrepreneurs can offer to secure loans or investments. Unlike established businesses that have tangible assets to use as collateral, many entrepreneurs have little to no assets that they can pledge to secure funding. This lack of collateral can make it difficult for entrepreneurs to convince investors to provide them with the funding they need. Furthermore, the information asymmetry between entrepreneurs and investors can also make it challenging for entrepreneurs to access funding. Investors may not have complete information about the potential risks and returns of investing in a particular venture, which can make them hesitant to provide funding. On the other hand, entrepreneurs may not have access to the networks or resources needed to connect with potential investors, further exacerbating the challenge of accessing funding.- Accessing funding for their ventures is a significant challenge that entrepreneurs often face. The high level of risk associated with entrepreneurship, the lack of collateral that entrepreneurs can provide, and the information asymmetry between entrepreneurs and investors all contribute to this challenge. Overcoming these obstacles requires entrepreneurs to be proactive in seeking out funding opportunities, building relationships with investors, and presenting a compelling case for why their ventures are worthy of investment.
