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From the theories of financial resource acquisition to a theory for acquiring financial resources - how should digital ventures raise equity capital beyond seed funding

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  • Hor, Shoon Chan (Timothy)
  • Chang, Artemis
  • Torres de Oliveira, Rui
  • Davidsson, Per

Abstract

For many digital ventures, acquiring financial resources in multiple rounds beyond seed funding to grow has become an important part of their entrepreneurial journey. The success rate of raising equity capital beyond their seed investments is, however, very low. Existing entrepreneurship studies on financial resource acquisition have explored separately how entrepreneurs organize their networks, establish venture legitimacy, and decide on funding sources. However, despite being identified as an important subprocess in new venture creation, little is known about why, when, and how entrepreneurs engage potential investors to increase the likelihood of post-seed investments. Hence, this paper synthesizes the literature on financial resource acquisition, theoretical concepts in entrepreneurial financing, and practice knowledge to frame a set of design principles to create a prescriptive process model to increase the likelihood of success in post-seed financial resource acquisition.

Suggested Citation

  • Hor, Shoon Chan (Timothy) & Chang, Artemis & Torres de Oliveira, Rui & Davidsson, Per, 2021. "From the theories of financial resource acquisition to a theory for acquiring financial resources - how should digital ventures raise equity capital beyond seed funding," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    • Handle: RePEc:eee:jobuve:v:16:y:2021:i:c:s2352673421000561
    DOI: 10.1016/j.jbvi.2021.e00278
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    4. Johnson, Nicholas E. & Short, Jeremy C. & Chandler, Jeffrey A. & Jordan, Samantha L., 2022. "Introducing the contentpreneur: Making the case for research on content creation-based online platforms," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
    5. Chan Timothy Hor, Shoon, 2023. "Why we need design science in entrepreneurship research an idiosyncratic perspective based on the experiences and learnings of an ex-practitioner in training to be an entrepreneurship scholar," Journal of Business Venturing Insights, Elsevier, vol. 19(C).

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