Entrepreneurial finance capital and the gig economy

Abstract

A decade ago, the word ‘Uber’ was little more than a German word for ‘above’ or ‘super’, more closely associated with the writings of 19th-century philosopher Friedrich Nietzsche than anything else. This chapter introduces how and the why the platform economy’s major players operate in a relatively concentrated geographic and an exclusive social space. It focuses on the types of players in the start-up space – angel investors, venture capitalists, sovereign wealth funds, and so on – and their roles and timelines in financing innovation. The chapter also focuses on case studies of companies that successfully launched radical innovation ventures: Uber, TaskRabbit, and Airbnb. It discusses comparisons and contracts of these case studies. The chapter also discusses what entrepreneurial finance of the platform economy has meant for the gig economy. Venture capital-backed firms tend to be more successful than non-venture-capital-backed firms because of the selection, treatment, and visibility effects.