In developed countries, where technology and information are included in significant production factors, innovative startups are created, inter alia, in the technology sectors.
Some of the big start-ups created big online technology companies.
During the dynamic development and expansion on the market, they carried out investment and development projects, usually on the basis of partially borrowed capital as part of external financing.
In some countries, traditional borrowing instruments for borrowing financial capital, which include bank loans, dominate in the field of external financing.
In other countries, innovative startups raise financial capital from loan funds, venture capital funds, and investment funds. In addition, some innovative startups raise capital for development from government programs of targeted subsidies or from business angels, etc.
Some startups have gained financial capital for development purposes from new sources of external financing developing in new online media, such as crowdfunding. After several years of development and strengthening of their position on the markets, then the growing companies raise financial capital for development purposes, inter alia, from financial instruments of the capital market, from issuing securities, from issuing corporate bonds and shares.
However, in individual countries, financial systems and dominant financial instruments in the offer of financial institutions may differ significantly. In view of the above, the current question is:
What forms of external financing dominate your country in the area of financing the development of innovative startups?
Please reply,
Please comments,
I invite everyone to the discussion,
Thank you very much,
Best regards,
Dariusz Prokopowicz
The main product is Equity. Since the equity requirement of individual start-ups is small, usually a Fund is Created based in India into which offshore investors invest, and this is then deployed in Startups.
Here in India Private equity companies invest through (direct and its subsidiaries) start up in small and medium sized projects. Where as the FIIs (FPIs through ECBs, ADR and GDR) through capital market for big projects.
In Ecuador SMEs depend on debt from from formal lenders. Micro businesses may use commercial banking, savings and loans and sometimes "informal" lenders.
In Puerto Rico, mostly government grants, incentives, exemptions from taxation, opportunity zone funding, as well as, disaster relief funds are mostly used into accelerators and formative stage funding for startups and private firms. This also explains the influx of people into the Island as the incentives are just way too good to let be.
My experience in Bulgaria shows that there is no serious interest on the part of venture capital to invest in startups. The reasons should be sought in the following directions: - (1) There is no developed capital market, which makes it difficult to sell the acquired shares; - (2) Startups are in areas that are generally not characterized by the application of innovations; - (3) There is no tangible presence of large foreign companies in areas with a high degree of innovation. Therefore, the development of technological startups in the country is very limited.
Best,
Trayan Yosifov
Yes, many countries are dominated by various, non-bank forms of external financing of innovative startups. For example, crowdfounding and other forms of online community funding, business angels, start-up investment funds, etc.
Best wishes,
Dariusz Prokopowicz
In the country in which I operate, various forms of external financing for the establishment and development of innovative startups are used, depending on the type of business, type of innovation, industry and business specificity, own participation of entrepreneurs, etc.
Greetings,
Dariusz Prokopowicz
Startup funding usually becomes part of the wider public discoure only when a huge investment or exit happens. This is partially because of the fact that these situations are more of an exception than the rule within the Serbian startup ecosystem. Moreover, startup founders quite often like to keep information about investments completely under the radar, escaping the public spotlight. For this and several other reasons, it is difficult to determine the level of funding that startups in Serbia have received in the last decade...
https://www.dsi.rs/wp-content/uploads/2020/01/Startup-skener_2019_ENG.pdf
ACCESS TO FINANCE FOR YOUNG INNOVATIVE ENTERPRISES IN SERBIA: ASSESSMENT AND RECOMMENDATIONS FOR POLICYMAKERS
We provide new empirical evidence of broader relevance for financing innovation, by assessing access to finance for young, innovative enterprises in Serbia as a transition economy. A relevant data set was analysed using an online survey, building upon a wider literature review, policy documents and related entrepreneurship surveys. Derived results, corroborated by in-depth interviews with stakeholders, suggest that young innovative enterprises are overly reliant on internal sources of financing. When considering external financing, they tend to be mostly interested in grants, subsidised bank loans (and to a lesser extent equity investment), rather than the more traditional bank financing. These results support other studies demonstrating that equity financing is better suited to finance early innovation compared to debt, and that subsidised government programmes are required to bridge the gap to equity financing. Our policy recommendations centre on fostering non-bank sources of financing, while providing support to increasing technology readiness and improving the business climate...
https://scindeks-clanci.ceon.rs/data/pdf/0353-443X/2018/0353-443X1802121T.pdf
Dear Ljubomir Jacić,
Thank you very much for the results of your research on external financing of innovation, carried out with regard to access to finance for young, innovative enterprises in Serbia. In the accompanying publication, you have provided interesting policy recommendations focusing on supporting non-bank sources of finance while supporting increasing technological readiness and improving the business climate. Due to the need to improve the policy of supporting innovation, it is an important issue.
Thank you very much,
Best regards,
Dariusz Prokopowicz
Chula’s strategy to push CU iHub to produce a new breed of startups to drive Thailand 4.0 through innovation pays off with a 16 billion baht valuation of innovative products...
https://www.chula.ac.th/en/highlight/64207/
How UK universities are driving innovation
This new report from IDC shares how higher education institutions in the UK such as the London School of Economics and Coventry University are considering key challenges and success factors of innovation and digital transformation...
https://www.salesforce.com/uk/form/sfdo/edu/innovation-uk-universities/?d=7013y000002Z7tdAAC&nc=7013y000002Z7tJAAS&utm_medium=tp_email&utm_source=sfdo&utm_campaign=emea-edc-edu&utm_content=ebook-timeshighered%7Cukidcreport
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