ABSTRACT This paper investigates the effect on startups’ performance played by the joint interaction between entrepreneurs’ human capital and business angels’ contributions. Relying on data from the Italian Business Angels Network for 77 business angels backed companies and a counterfactual sample of non-business angel backed companies, we find that the entrepreneur’s general and specific human capital is a major driver of the probability of being funded by business angels, which positively affects the venture’s growth, but not its long-term financial performance. In brief, entrepreneurs’ human capital is a major determinant of raising business angel funding, but it is the business angel contribution that constitutes a key driver for the startup’s survival and profitability.

ABSTRACT As the global population of elderly women continues to grow, understanding their financial well-being has become increasingly important. Despite the growing attention on financial inclusion, limited research has focused on how it impacts the financial resilience of elderly women, a group particularly vulnerable to financial shocks. This study addresses this gap by exploring how financial inclusion contributes to elderly women’s ability to cope with unexpected financial emergencies. Using survey data from 1,664 elderly women (above 60 years), the study investigates the role of various financial inclusion indicators – such as savings and insurance products, as well as reliance on family members for saving money – in enhancing financial resilience. Our findings show that financial inclusion plays a crucial role in strengthening the financial resilience of elderly women, with significant contributions from owning savings and insurance products. These insights have important implications for policymakers, regulators, and financial institutions seeking to design more inclusive financial services for elderly populations. By fostering financial inclusion, this study contributes to broader efforts toward achieving the United Nations’ Sustainable Development Goals (SDGs), particularly those related to reducing inequality and promoting economic security for all.

ABSTRACT This study investigates the differences existing between the effects of majority and minority equity investments and partnership (non-equity) agreements on FinTechs’ performance. It also explores different effects among strategic alliances with banks and Other Financial Institutions (OFIs). Analysing a panel of 122 FinTechs operating in Italy over the period 2007–2019, this study shows that equity agreements positively influence performance measured through revenue growth. The effect of banks’ majority equity investments is delayed compared to minority stakes, while partnership agreements are less relevant. Only banks’ minority equity investments signal FinTechs’ quality and enhance their ability to secure subsequent funds, while majority equity investments are strongly manned by banks, excluding new investors entry. Similar effects characterise relationships with OFIs, but with weaker intensity and persistence. Corporate control by OFIs negatively influences revenue growth. For FinTechs’ managers, this study underscores the critical role of equity agreements with banks in boosting growth. Likewise, banks’ managers could create supportive environments for FinTechs to maximise innovation and the benefits of strategic alliances. These findings also hold social implications, since successful bank-FinTech relationships can improve efficiency and innovation in customer servicing.

ABSTRACT Venture capital in emerging economies is part of the shadow economy and consequently under-explored. The paper attempts to disentangle the hidden operations of informal venture capital (IVCs) in emerging economies such as Pakistan. Moreover, the study examines the impact and consequences of the un-documented economy, the role of IVCs and networks that give rise to the shadow economic systems. Using 21 semi-structured interviews, (1) we developed a conceptual framework to study the presence of IVCs; (2) the analysis suggests that IVCs fill the finance gap where formal financial institutions and government funding schemes failed to meet the needs of high-growth entrepreneurs; (3) IVCs have a significant presence in case of Pakistan and serve a vital role in promoting economic well-being; (4) the findings suggest that government-sponsored schemes give rise to favouritism and malpractices in the distribution of funds give rise to “Hybrid” IVCs operation; (5) finally, our results suggest rationalisation of IVCs promote sustainability and agenda for entrepreneurial growth. The findings have implications for policymakers to develop venture capital markets and facilitate the transition of IVCs to formal capital markets.

ABSTRACT Through this paper, we examined the relationship between macroeconomic factors and new entrepreneurial firms in France during the 2000–2020 period; this relationship included several uncertainties and shocks (the 9/11, the 2008 global financial crisis, the Brexit, COVID-19 Pandemic, and so forth). To this aim, we applied various advanced machine learning (ML) techniques, including the eXtreme Gradient Boosting (XGBoost) algorithm, Light Gradient-Boosting Machine (LightGBM) algorithm, Neural Network (NN), Random Forest (RF), and Linear Regression (LR). We also investigated SHapley Additive exPlanation (SHAP) framework for interpretation and analysis purposes. Furthermore, we compared the performance and forecasting accuracy of the five models. The study revealed three major results. First, the XGBoost algorithm provides the most accurate prediction of a firm’s creation. Second, a heterogeneous relationship exists between new business creation and the business cycle. Third, higher GDP and unemployment levels are associated with greater procyclicality and countercyclicality in entrepreneurship, respectively. Finally, the results of the study suggest the importance of developing effective financial assistance during economic downturns to encourage faster recovery in the formation of new businesses.

ABSTRACT This paper investigates the critical issue of financing early-stage green startups, examining the types of investors and finance models available, the challenges these startups face, and how the green finance ecosystem can better support early-stage investment. Utilizing a systematic literature review (SLR) methodology, we provide a comprehensive analysis of the current landscape. Our findings reveal a significant paucity of data and a bias towards well-established North American and European ecosystems, while highlighting an emerging diversity in private finance sources post-Global financial crisis (GFC), including grants, equity, and crowdfunding. Despite this, there remains a heavy reliance on public funding and a lack of evidence regarding its impact. The inherent characteristics of cleantech – high capital expenditure, long investment horizons, and disruptive nature – necessitate innovative public financing instruments and policies to reduce risk and attract private investment. Our theoretical contribution highlights the necessity for interdisciplinary research and policy collaboration to develop a holistic entrepreneurial finance (entfin) ecosystem. This approach should integrate quantitative economic and qualitative behavioural finance research to address information asymmetries and improve the green economy policy mix. Such a framework will support public-private co-financing, enhance stakeholder engagement, and provide evidence for policy decisions, facilitating more rapid commercialization of cleantech innovations for environmental sustainability.

ABSTRACT This descriptive study aims at examining to which extent, and by which means governments intervene in the private venture capital market. To do so, we present original primary data, hand-collected from the annual reports of 128 national and sub-national government agencies located in 11 European countries, and their 392 Government Venture Capital (GVC) programmes run over the 2007–2021 period. Our data confirms the importance of governments in the supply of VC, accounting for 30.9% of the total euro-amount of VC investments. It also documents a great deal of variation in the design features of GVC agencies (their ownership, experience, geographical focus, stated objectives and policy mix used) and their means of intervention (general investment approach, involvement of the private investors, budget organization and size, investment selection criteria), which was neglected by previous studies. We argue that the marked differences across GVC policies may explain why the existent evidence on whether GVC policies are effective is not clear-cut. We draw on existing literature discussing government intervention in entrepreneurial finance to reason on how each design feature might influence GVC effectiveness, and put forward several propositions calling for future empirical research to test them.

ABSTRACT We analyze the impact of the relationship between private captive venture capital firms (VCFs) and their parent investors on the likelihood of achieving successful exits in investee firms. We argue that the differences in strategic goals and the way venture managers are appointed and incentivized may affect the exit way achieved by different types of captive VCFs. In particular, we focus on private captive VCFs solely funded by a corporation or a financial institution, as well as on semi-captive VCFs jointly funded by several entities. We find that captive VCFs backed by corporations show a higher likelihood of exiting their portfolio firms more successfully than those backed by financial institutions and semi-captive VCFs. VCFs backed by corporations seem to have strategic goals that are compatible with the maximization of portfolio return, and their venture managers may contribute with valuable specific industry knowledge. Conversely, the managers of VCFs wholly owned by financial institutions rarely contribute with industry and technology knowledge and are even more affected by the lack of adequate compensation packages.

ABSTRACT Existing studies on the impact of corporate venture capital (CVC) on startup innovation primarily focus on the capability of CVC parent to provide resources for startups. This study examines the role of CVC managers’ motivation in facilitating resource transfer to startups. Utilizing a unique disclosure requirement for investments by Chinese public firms in venture capital (VC) funds, and a hand-collected database on CVC managers’ compensation, our study explores the impact of compensation incentives on CVC managers with respect to startup innovation and the moderating effect of misappropriation risk by the CVC parent. Our two-stage regression model reveals that stronger compensation incentives positively impact startup innovation. Moreover, the effects diminish if the misappropriation risk by the CVC parent increases. These findings underscore that while strong compensation incentives for CVC managers enhance their motivation to facilitate resource transfer from the CVC parent to startups, this is mitigated in contexts with a heightened misappropriation risk.

ABSTRACT This study discusses the impediments and challenges to the growth of impact investing in a developing country. The authors define a set of 7 possible obstacles by establishing a conceptual framework for impact investing. The obstacles are tested through 24 interviews with different players within the Chilean entrepreneurial ecosystem, confirming impediments such as the early stage of market development, the scarcity of suitable investment deals, overdependence on public funding, a paucity of intermediaries and specialised business supports, and the lack of impact measurement practices. Our findings represent a step forward in understanding and supporting the growth of impact investments in developing countries.