Raising Start-Up Capital for Technology-Based Entrepreneurial Ventures: Equity Financing and Subsidising

Abstract

The overall research aim of the master thesis is to reveal the actual relationship between equity financing and subsidizing in forming start-up capital of technology based entrepreneurial ventures (TBEVs). To complete the stated aim the following tasks were performed: the nature of TBEVs was analyzed, the process of raising start-up capital for TBEVs was described, an overview was given of two major sources of equity financing for early-stage TBEVs: business angels and venture capital funds; the economic rationale and main measures of public policy in the area of financial support to TBEVs were characterized, present-day practices of raising start-up capital for TBEVs in Russia were analyzed, the results of quantitative study of 150 TBEVs and qualitative study of six TBEVs of different industries in Russia were described and analyzed. As the result of the study the balance between equity financing and subsidizing in overall start-up capital of TBEVs in Russia was revealed, and the following preference order of financial sources for TBEVs in Russia was identified: grant => equity + subsidy => equity. In conclusion the author gives managerial and policy recommendations regarding attracting start-up capital for TBEVs.