The Role of Financial Availability and Entrepreneurship Education in Starting Start-Up Business

Abstract

Start-up businesses experienced significant growth in Surakarta and the surrounding areas. This development is likely supported by Surakarta’s economy, which is strongly driven by the business and industrial sectors. A company’s external and internal factors also affect start-up business success in Surakarta. From the company perspective, the factors affecting this success are the marketing, human resources, finance, and operational aspects. This study focuses on start-up businesses in Surakarta and the surrounding areas. Data were collected from 104 respondents and were analyzed using a quantitative method. This study examines the impact of a decision to start a business, the openness of the internal market, sales, dynamic market, and government policies, which were found to affect capital investors’ decision and their trust in start-up entrepreneurs. This study was interpretative and empiric, with hypotheses tested using PLS-SEM. The findings showed that risk tolerance positively impacts starting a new business (start-up) with a p-value of 0.000<0.005, supporting the first hypothesis. The hypothesis on financial availability’s positive and significant effect on entrepreneurship education was supported with a p-value of 0.001<0.005. The hypothesis on the effect of financial availability on starting a new business (start-up) is also supported with a p-value of 0.002<0.005, which supports the third hypothesis. Lastly, risk tolerance mediating role in the relationship between entrepreneurship education and starting a new business (start-up) is supported with a p-value of 0.000<0.005, supporting hypothesis 4.