(Blank)
which causes complicate access to start-up capital?
Information assymmetry and moral hazard problems
What kind of capital is most used in the first year?
Outsider debt
What is entrepreneurial orientation?
a start-up’s propensity to engage in innovative activities, willingness to take risks, and proactiveness relative to market opportunities
Which dimensions characterize the quality of investor protection?
What is mostly the debt value ratio of a start-up?
a 40% ratio
start-ups with high levels of EO will rely more on external equity capital and less on external debt capital to meet their financing needs. TRUE or FALSE
TRUE
Why is the legal environment important for access to external financing?
High amounts of and diversity in sources of external finance are associated with high levels of property rights, contract enforcement and corruption protection
Explain the critical distinction between liquidity provision and risk-bearing in financing relationships
Personal guarantees and collateral must often be posted to secure financing for startups
Limited liability constraints can be contractually circumvented in the borrower/ lender agreement with a bank by requiring the borrower to pledge personal assets that may exceed the value of the business if it fails
What are two potential strategies for decoupling supply and demand for capital and what does the elasticity entail?
Housing supply appreciation
Bankruptcy exemption:
Link housing supply elasticity to bank credit