New Frontiers in Entrepreneurial Fundraising

Within entrepreneurial ecosystems, incubators and accelerators play a crucial role in nurturing and boosting startups in many different sectors. Although both facilitate action for innovative companies at a very early stage, they offer very different services and have very different selection criteria. What they have in common, however, is that they are a deeply interesting financing option for startups, since they can be the promoters of the company, offer participatory loans, or provide funding in exchange for equity. In some cases, they even offer grants that the startup does not have to pay back. This chapter discusses the different financing options and services offered by incubators and accelerators. It also describes examples of incubators and accelerators that are international references among those of its kind, including private initiatives, initiatives led by large companies, and public initiatives, where programs managed by universities stand out.

Crowdfunding has changed in recent years. It now offers more opportunities to entrepreneurs through more channels. But what factors are critical for success? This chapter begins with a discussion of crowdfunding as a viable source of funding and markets for a business idea. The different crowdfunding options available to fundseekers are described. A proposal of how to achieve a successful project is then presented. The proposal explains how to prepare a project, create a campaign on a platform, promote the project within networks, and close the circle. The community is a fundamental element from the very first stage of idea development. The community must be nurtured throughout the entire process, even when closing the circle after receiving funding. Because crowdfunding predominantly involves peer-to-peer transactions, appreciation is a key aspect. Success stories of projects funded through crowdfunding (reward-based, donation-based, and equity-based crowdfunding, as well as crowdlending) and platforms for different types of crowdfunding are also analyzed. The key aspects for entrepreneurs to run a successful campaign within the crowdfunding system include diversity, creativity, innovation, and transparency.

The sources of financing selected to support and develop a business are a key element during the different stages of a company’s life. In this sense, in a company’s financial planning process, it is essential to determine its financing needs to achieve the company’s general objectives and, specifically, its financial objectives. In this chapter, factoring and leasing are studied as financial tools for a company’s cash management and as widely used sources of financing. Factoring is a combination of different services, ranging from risk hedging through collection and recovery management to invoice portfolio control. Leasing is characterized by the fact that a party (the lessor) assigns the use and enjoyment of an asset through the payment of periodic installments that include the cost of the assignment plus interest and expenses. Some of their main advantages and disadvantages are presented, as well as the different types of factoring and leasing that can be found. Finally, a specific section is included on confirming as a supplier payment management system that allows the collection of invoices before the agreed due date (maturity date).

It is indisputable that entrepreneurship is one of the main drivers of innovation, competitiveness, and growth in a country. This statement gains even more importance when we find ourselves in an economic crisis, which increases the need to promote the development of new companies with entrepreneurial projects, which are the ones with the greatest potential to generate employment. Given the numerous problems encountered by many entrepreneurs in starting up their business, this chapter aims to provide them with information that may be useful for the development of their business plan. To this end, the measures established by the Spanish government to facilitate their incorporation into the market are analyzed, in particular, the tax benefits which they can apply for and the financial aid available for the aforementioned entrepreneurs. One of the most important measures is the significant tax incentive in personal income tax in relation to investments aimed at creating new companies. In addition, other tax incentives of interest to entrepreneurs are being studied. All this is completed with a compilation of grants and incentives for entrepreneurship.

Among the many formulas that exist for financing a business project, two of the most widely used by entrepreneurs today are business angels (BA) and venture capital (VC). This chapter sheds light on the interaction between these sources of funding. Both financing options played an essential role for the growth of start-ups even before the financial crisis. In particular, the main goal of this chapter is to provide the reader with an accurate understanding of both sources of financing before making an investment decision. The chapter shows the concept, operations, and growth expectations of BA and VC and a subsequent comparison between the two methods. Overall, this chapter provides a more fine-grained understanding of the role that BA and VC investors can play in the process of creating new ventures. As the main takeaways of this chapter, it is expected that entrepreneurs will learn to successfully find the financing formula that best suits the characteristics and urgencies of their project and that, in this way, their company will develop or continue to grow.

One of the hardest problems faced by entrepreneurs is how to finance and give visibility to their company in order for it to grow. Small- and medium-sized enterprises (SMEs) are highly dependent on self-financing and bank financing. Therefore, they require a favorable environment to be able to meet their financing needs, including access to capital markets. Certain alternatives have been launched in Europe in this regard. In Spain, BME Growth is a market aimed at small-cap companies seeking to expand, with tailor-made regulations designed specifically for them and costs and processes adapted to their characteristics. In addition to access to financing, other advantages of being a public company are increased visibility, continuous valuation, and liquidity of the company’s shares. As a prior step for those companies still not ready to join BME Growth but planning to do so in the next 2–3 years, the Pre-Market Environment (known in Spanish as Entorno Pre Mercado (EpM)) accompanies them along the way and helps them become familiar with the operation of financial markets and to gain access to an ecosystem of investors, experts, entrepreneurs, advisors, and financial market professionals. In this chapter, after contextualizing the securities markets for SMEs in Europe, BME Growth for the Spanish case is analyzed in detail: its creation, main characteristics and advantages, requirements for incorporation and permanence, costs, characteristics of listed companies, and success stories of the market. Next, the EpM is defined and analyzed as a step prior to going public in BME Growth. The chapter concludes with the details of a success story, Soluciones Cuatroochenta, a company that first joined the EpM and then moved to BME Growth.

Money appears to cover the deficiencies of barter, and cryptocurrencies appear, as an evolution of money. Entrepreneurs have in cryptocurrencies a new asset to invest their treasury and an alternative means of payment to “fiat” money. Moreover, blockchain technology has multiple applications in the real world that are very useful for the entrepreneur. Security and utility tokens are a new source of financing and a tool to foster relationships with their customers or fans, and NFTs allow a safe and no fake art market.

In recent years, society and companies have faced numerous crises, which have devastated not only the economy but also the confidence of stakeholders, especially that of investors and funders. This fact has resulted in entrepreneurs fighting to raise funds for their projects, regardless of the life phase of their projects. In this sense, the scientific evidence literature indicates that reducing the asymmetry of information between a company and a funder or investor is necessary. The responsible management of companies and how they disclose non-financial information translates into an improvement in transparency, having an impact on reputation, image, legitimacy, and results and therefore on improving access to new funds and better conditions. This chapter discusses the importance of transparency as a form of engagement with stakeholders and especially with funders. The development of new technologies acts in favor of transparency in that society can obtain information from companies at the click of a button. That is why companies must maintain an attitude of resilience to changes in the environment. So, the challenge is to know how to use these variables to their advantage, that is, how appropriate use of information and transparency allows them to send positive signals to an increasingly demanding market with companies.

This study aims to examine how Spanish startups disclose information on corporate governance, by empirically analyzing a set of startups in this context. In particular, this chapter focuses on four startups from Science Park at the University of Valencia, exploring whether the Spanish startups fulfill the recommendations of codes of corporate good governance. Thus, we explore such characteristics of corporate governance as the size of the board, the number of advisors to the board, the board’s gender diversity, and questions relating to two Sustainable Development Goals (SDGs). The results of the startups completing a questionnaire emphasize the need to continue work in the field of corporate governance, to assist startups with a long way to go. The corporate boards should consider implementing codes of corporate governance and corporate social responsibility activities in their companies.

This chapter aims to provide a practical guide to facilitate the process of seeking financing for entrepreneurs. The aim is to highlight some common mistakes entrepreneurs make in their search for funding and some alternatives or guidelines to make this journey less complicated. In general, an entrepreneur must convince an investor of their project’s growth potential with persuasive business arguments. However, not all types of financing are suitable for every project, and so it is important to have a solid understanding of the project, the environment in which it operates, and its current growth stage. Finally, two case studies are presented to illustrate a successful outcome and one that was a failure.