{"title":"Correlation between the Profitability and Working Capital Practices: A Case Study in the Gulf Cooperation Council","authors":"Mohammed Abdul Imran Khan, Shabbir Alam, A. Syed","doi":"10.13106/JAFEB.2021.VOL8.NO3.0229","DOIUrl":"https://doi.org/10.13106/JAFEB.2021.VOL8.NO3.0229","url":null,"abstract":"The ability of entrepreneurs to arrange working capital is the key to maximizing the profitability of small- and medium-sized enterprises and the wealth of entrepreneurs. The study investigates the correlation between entrepreneurs’ working capital management and the profitability of SMEs listed on six Gulf Cooperation Council (GCC) stock exchanges between 2019 and 2020. The secondary data is collected from the financial statements of SMEs listed on the six GCC stock exchanges. The actual sample for the research study was a total of 136 small- and medium-sized enterprises selected using purposive sampling methods. Four research models were considered in this analysis, all ending up affecting gross profits. The selected entrepreneurial SMEs were listed on six different Gulf Cooperation Council stock exchanges during 2019–2020. The fixed financial assets ratio, financial debt ratio, and company size are used as control variables and data were analyzed using multiple regression. The research results demonstrate that there is a statistically significant negative correlation between profitability measured by gross profit and cash cycle and the components of the cash cycle (including days of accounts receivable and days of inventory). The study further reveals that there is no significant correlation between gross profit and days of accounts payable.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"148 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123464614","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Greg Ross, Daniel Sciro, Sanjiv Ranjan Das, Hussain Raza
{"title":"CapitalVX: A Machine Learning Model for Startup Selection and Exit Prediction","authors":"Greg Ross, Daniel Sciro, Sanjiv Ranjan Das, Hussain Raza","doi":"10.2139/ssrn.3684185","DOIUrl":"https://doi.org/10.2139/ssrn.3684185","url":null,"abstract":"Using a big data set of venture capital financing and related startup firms from Crunchbase, this paper develops a machine-learning model called CapitalVX (for “Capital Venture eXchange”) to predict the outcomes for startups, i.e., whether they will exit successfully through an IPO or acquisition, or fail. Using a large feature set, the out-of-sample accuracy of predictions on startup outcomes and follow-on funding is 88%. This research suggests that VC/PE firms may be able to benefit from using machine learning to screen potential investments using publicly available information, diverting this time instead into mentoring and monitoring the investments they make.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114359711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Securities-Based Crowdfunding by Startups: Does Auditor Attestation Matter?","authors":"Jing Gong, Jayanth K. Krishnan, Yi Liang","doi":"10.2139/ssrn.3626454","DOIUrl":"https://doi.org/10.2139/ssrn.3626454","url":null,"abstract":"We examine financing outcomes for small businesses seeking to sell public securities in a setting characterized by high information asymmetry, weak requirements for auditor participation, and a complete absence of Big N auditors. Issuers that raise capital from small, unsophisticated investors through crowdfunding, under the Securities and Exchange Commission's Regulation Crowdfunding (RegCF), often need no auditor attestation or need only weak attestation in the form of reviews, not audits, of their financial statements. We find that auditor reviews are positively associated with both the probability of crowdfunding success and the total amount raised. Further, we compare outcomes for issuers that procure auditor reviews voluntarily and mandatorily, and document that issuers with voluntary reviews have better outcomes. We conjecture that, for issuers that voluntarily procure reviews, the reviews serve as signals of high future prospects. Finally, the positive effect of reviews is concentrated in PCAOB-registered auditors.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129467820","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"An Ensemble Deep Learning Approach to Explore the Impact of Enticement, Engagement and Experience in Reward Based Crowdfunding","authors":"Arvind Srinivasan, Akilandeswari P","doi":"10.2139/ssrn.3615176","DOIUrl":"https://doi.org/10.2139/ssrn.3615176","url":null,"abstract":"The exponential growth and ubiquity of the Internet since its advent have led emerging entrepreneurs to seek new avenues of financial support for funding their innovations. Evolved as an alternative source of finance for growing businesses, Crowdfunding democratises venture capitalism by providing benefits to patrons by offering incentives. Although there exist apparent benefits for a funder if a deal succeeds, there are many factors that can contribute to failure. This paper identifies three key factors: Enticement, Experience and Engagement; extrapolating hidden metrics from these factors by analysing Kickstarter projects to explore the effectiveness of content and its sentiments, rewards and their tangibility, funder belief and founder-funder engagement in its success. To validate the discovered metrics, an ensemble deep-learning model that combines textual and numeric features is proposed to predict campaigns with the greatest potential to achieve funding with 93% accuracy.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125308263","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Minh-Hoang Nguyen, N. Huyen, Thanh-Hang Pham, Nguyen Thi Hong Yen, Q. Vuong
{"title":"On the 50-Year Research Landscape of Entrepreneurial Finance: A Sign of Western Ideological Homogeneity?","authors":"Minh-Hoang Nguyen, N. Huyen, Thanh-Hang Pham, Nguyen Thi Hong Yen, Q. Vuong","doi":"10.2139/ssrn.3612240","DOIUrl":"https://doi.org/10.2139/ssrn.3612240","url":null,"abstract":"Financing issues play essential roles in the survival and development of entrepreneurial firms. The current study, employing the bibliometric analysis of 6,903 articles from 1970 to 2019, extracted from Web of Science database, aims to provide an overview of the discipline’s landscape and major scientific domains to facilitate scientific development within the field. Entrepreneurial finance is a young and growing field with exponential growth in the number of publications (with 19.54% per year) and rising collaboration tendency among authors. Journal of Business Venturing is the most prestigious journal, while Sustainability is noteworthy for its rapid contribution to the field. We also note a sign of Western ideological homogeneity from the collaboration networks and lists of top authors, institutions, and countries. Besides, using keyword co-occurrence analysis, seven major research domains are identified: “venture capital”, “crowdfunding”, “SMEs finance”, “social entrepreneurship finance”, “financial risk”, “microfinance”, and “human-social-financial capital”. Based on these findings, we raise the concern of lacking diversity in entrepreneurial finance research and provide several recommendations for future potential research directions.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"295 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122091340","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Where Does the Crowd Fund – And How Does It Matter to Regional Entrepreneurship?","authors":"Sandy Yu, L. Fleming","doi":"10.2139/ssrn.3527704","DOIUrl":"https://doi.org/10.2139/ssrn.3527704","url":null,"abstract":"Where does crowdfunding occur and what impact does it have on new firm starts and regional entrepreneurship? We find that crowdfunding occurs more often in regions with greater population, foreign born, and college educated and attending residents, and less often in regions with higher median household income, low educational attainment, and middle-aged residents. Clustering regions by these same variables, we find an increasing disparity in per capita crowdfunding in large cities relative to smaller cities, college towns, and poor regions with weak human capital. CF appears to precede regional entrepreneurship, yet that effect comes mainly from the less urban regions with less CF. While CF occurs less in the communities that might benefit most from it, it has greater impact when it does.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"72 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121442700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Influence of Family Environment, Social Environment, Self Efficacy, Self Motivation and Financial Literacy to Entrepreneurship Intention: A Study on Indonesian College Students","authors":"Ummul Chairat Rais, Hanifah Ayu Rachmawati","doi":"10.2139/ssrn.3489671","DOIUrl":"https://doi.org/10.2139/ssrn.3489671","url":null,"abstract":"Research aimed to test 1) The influence of family environment towards entrepreneurship intention; 2) the influence of social environment toward entrepreneurship intention; 3) the influence of self efficacy towards entrepreneurship intention; 4) the influence of self motivation towards entrepreneurship intention; 5) the influence of financial literacy towards entrepreneurship intention; 6) the influence of family environment, social environment, self efficacy, self motivation and financial literacy againts the entrepreneurship intention. The purpose of this study is to get proper knowledge and trustworthy on the influence of family environment, social environment, self efficacy, self motivation and financial literacy to entrepreneurship intention. This research was conducted in Indonesia, with a total sample of 251 respondent namely research. Data was analyzed using SEM techniques, for the purpose of this study was to test the theory, the engineering analysis conducted is based SEM (Covariance based SEM), the SEM aproach using smartPLS 3.0. The result showed that the variables that have a major influence is self efficacy. Meanwhile, variables that have low impact on entrepreneurship intention is financial literacy.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"202 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116171860","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Attention Across Borders: Investor Attention as a Driver of Cross-Border Equity Crowdfunding Investments","authors":"M. V. Maula, Anna Lukkarinen","doi":"10.2139/ssrn.3487467","DOIUrl":"https://doi.org/10.2139/ssrn.3487467","url":null,"abstract":"Equity crowdfunding is an increasingly international form of digital platform-based entrepreneurial finance. With an unprecedented number of available international investment opportunities, it becomes relevant to ask what leads cross-border investors to invest in certain campaigns and not others. Building on attention literature, we theorize how investor attention drives cross-border investors’ investment choices. We test our hypotheses using a unique dataset of cross-border equity crowdfunding investments. We find that investor attention, as proxied by campaign visibility in investor countries and entrepreneur-investor co-nationality, has strong positive effects on cross-border investment tie formation, whereas national distances lose their importance in this digital setting.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"86 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123042788","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Joonkyu Choi, Nathan Goldschlag, J. Haltiwanger, J. D. Kim
{"title":"Founding Teams and Startup Performance","authors":"Joonkyu Choi, Nathan Goldschlag, J. Haltiwanger, J. D. Kim","doi":"10.2139/ssrn.3481850","DOIUrl":"https://doi.org/10.2139/ssrn.3481850","url":null,"abstract":"We explore the role of founding teams in accounting for the post-entry dynamics of startups. While the entrepreneurship literature has largely focused on business founders, we broaden this view by considering founding teams as both the founders and early joiners. We investigate the idea that the success of a startup may derive from the organizational capital that is created at firm formation and is inalienable from the founding team itself. To test this hypothesis, we exploit premature deaths to identify the causal impact of losing a founding team member on startup performance. We find that the exogenous separation of a founding team member due to premature death has a persistently large, negative, and statistically significant impact on post-entry size, survival, and productivity of startups. Consistent with our organizational capital hypothesis, effects are stronger for firms with small founding teams and those operating in business-to-business (B2B) oriented sectors. Moreover, while we find that the loss of a founder has an especially large adverse effect, the loss of an early joiner nonetheless exhibits a significant negative effect, lending support to our inclusive definition of founding teams.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124479248","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Entrepreneurial Learning and Disincentives in Crowdfunding Markets","authors":"Yan Xu, Jian Ni","doi":"10.2139/ssrn.3480888","DOIUrl":"https://doi.org/10.2139/ssrn.3480888","url":null,"abstract":"Reward-based crowdfunding has enabled entrepreneurs to interact with consumers even before product launches. However, this market persistently suffers from a high failure rate; that is, entrepreneurs fail to launch and deliver their products as promised. We investigate the extent to which this high failure rate is because of information distortion—entrepreneurs have uncertainty about consumers’ evaluation of the new products. We model the product launch decisions of different types of entrepreneurs who raise funds through preselling on reward-based crowdfunding platforms and subsequently decide whether to continue with the product launch. To do so, we collect structured and unstructured data from Kickstarter’s digital video game category and classify attributes using supervised learning methods. We develop and estimate an integrated model of crowdfunding demand and entrepreneurs’ product launch decisions. We find that the information entrepreneurs gather from crowdfunding sales has sizable impacts on the product launch decisions of entrepreneurs with low managerial capital or new to the crowdfunding platform. Our counterfactual simulations suggest that platform policy regulating overfunded projects can reduce the product launch failure rate by about 13%. This paper was accepted by Matthew Shum, marketing.","PeriodicalId":409712,"journal":{"name":"ERPN: Entrepreneurs (Finance) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121320045","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}