Our research focuses on Entrepreneurial Finance as the financing of companies where the owners have a direct influence on the corporate strategy and also the management. Classically, this includes in particular start-up and growth companies. However, established companies can also belong to owner-dominated companies, for example buyout or family businesses. Entrepreneurial finance is characterised by a strong focus on forms of financing on the private capital market, which has an impact on the financing process from funding to the exit of the investors. Our aim is to empirically examine the complex structures in Entrepreneurial Finance between the company to be financed and the investors and to derive practical recommendations for action. We focus on four main areas:
- Start-up and growth financing
- Venture Capital and Private Equity
- Financing and acquisition behavior of family businesses
- Social enterprise funding
Start-up and growth financing
A key challenge for young companies is to obtain sufficient financial resources for their growth process. In the recent past, the portfolio of potential financing alternatives for startups has changed. For example, venture lending and crowdfunding have become more important as options for start-up teams. The aim of the research work at our chair is to take this complexity of financing options into account and to examine the effects of the instruments individually, but also in combination, on the growth process of start-up companies.
Venture capital and private equity
Venture capital and private equity are established financing instruments in equity financing. As a classic instrument for start-up and growth financing, venture capital is a special focus of the chair. We also focus on private equity as external equity financing for established, owner-dominated companies. In our research on venture capital and private equity, we take three different perspectives: from the perspective of the portfolio company as a financing alternative, from the perspective of the venture capital company as an investment strategy and also the relationship between syndicate partners and from the perspective of the fund investors as Asset management perspective.
Financing and acquisition behavior of family businesses
Family businesses are a globally widespread form of business with a high level of economic importance. Due to the overlapping of the family system and the company system, they have a special structure, which can result in particular financing challenges. The recent past has shown that the heterogeneous governance structures in particular with regard to the prevailing family influence there have an impact on strategic, entrepreneurial decisions. The aim of the research work at our chair is to record the heterogeneity of family businesses on the basis of quantitative and empirical studies and to investigate their effects on relevant strategic decisions with reference to financing.
Social enterprise funding
Social enterprises use entrepreneurial concepts in order to cope with social problems that have not yet been solved or that have not been adequately solved. The difficulty for social entrepreneurs lies in creating a business model that generates social added value and at the same time is financially sustainable and self-sustaining. The business models are typically not designed to maximize profits, which is why potential investors have to forego some or all of a financial return in favor of a social return. This means that financing for social enterprises is a particular challenge, which is taken into account in the research projects of our chair.