Definition of Start-Up
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Gale Encyclopedia of E-Commerce: Startups
by
Start-Ups
In general, start-ups are characterized by novel business models and a heavy reliance on venture capital, although that picture changed in the early 2000s. One of the biggest challenge start-ups (Internet-based or not) faced in the post-dot-com era was providing a viable business model that could show that the company would become a profitable venture. A second major challenge was the economic downturn of 2008–2009, which dried up a lot of capital formerly available for loans and investments. The volatile stock market of the early 2010s also made initial public offerings—perhaps the Holy Grail of capital raising for start-up companies—more challenging for new, unproven companies.
"This 2-volume set features 470 comprehensive and detailed essays on topics related to the emerging world of e-commerce. The Gale Encyclopedia to E-Commerce provides answers to common questions e-entrepreneurs or students have about Web site development, financing, advertising and more. The Encyclopedia also profiles individuals and organizations considered to be the industry leaders and innovators and covers significant events, case studies and legal issues important to understanding the current e-commerce environment. Also included are a timeline of key events in e-commerce development; additional e-commerce information sources in a ""Further Reading"" section; and a subject Index to organization names, personal names, industries, and subject terms. "
ISBN: 9781414490465Publication Date: 2012-06-15 -
A. Business management, marketing, operating, and accounting issues
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Disproportionate Distribution of Stock Ownership Among Initial Founders in Startup Ventures: Survey Results and A Ranking of Factors To date little research has been performed as to how founders of startup ventures determine initial distribution of ownership. In many instances, distribution of ownership is proportionally divided, even though individual contributions to the venture may vary widely. In these circumstances, a disproportionate distribution of ownership would be more reflective of individual contributions to the venture, and more importantly, determine the appropriate incentive (or "reward") for each founder. A survey of business owners was administered, and counter to much of the existing literature, a significant percentage of the respondents divided ownership disproportionately. The survey provides a ranking of factors that can contribute to disproportionate distribution of ownership. [ABSTRACT FROM AUTHOR]
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Managing complexity and unforeseeable uncertainty in startup companies: an empirical study Novel startup companies often face not only risk, but also unforeseeable uncertainty (the inability to recognize and articulate all relevant variables affecting performance). The literature recognizes that established risk planning methods are very powerful when the nature of risks is well understood, but that they are insufficient for managing unforeseeable uncertainty. For this case, two fundamental approaches have been identified: trial-and-error learning, or actively searching for information and repeatedly changing the goals and course of action as new information emerges, and selectionism, or pursuing several approaches in parallel to see ex post what works best. Based on a sample of 58 startups in Shanghai, we test predictions from prior literature on the circumstances under which selectionism or trial-and-error learning leads to higher performance. We find that the best approach depends on a combination of uncertainty and complexity of the startup: risk planning is sufficient when both are low; trial-and-error learning promises the highest potential when unforeseeable uncertainty is high, and selectionism is preferred when both unforeseeable uncertainty and complexity are high, provided that the choice of the best trial can be delayed until its true market performance can be assessed.
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A Review and Road Map of Entrepreneurial Equity Financing Research: Venture Capital, Corporate Venture Capital, Angel Investment, Crowdfunding, and Accelerators The primary subject matter of this case concerns business startup issues. Issues examined include the components and importance of a business plan, evaluation and selection of a business organization form, and evaluating sources and types of startup capital. The case requires students to have an introductory knowledge of accounting, finance and general business issues thus the case has a difficulty level of three (junior level) or higher. The case is designed to be taught in one class session of approximately 1.25 hours and is expected to require 2-3 hours of preparation time from the students.
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Pre-startup planning and the survival of new small businesses: Theoretical linkages Researchers have put forward the view that the high mortality of new small businesses could be reduced through greater pre-startup planning. However, the argument that the value of planning context-dependent is emerging. This perspective, as applied to new small businesses, is explored. This analysis is a departure from earlier small-business planning research because it differentiates the direct effects of pre-startup planning from indirect effects, and explicitly investigates the function of contextual factors. The potential impacts of three environmental conditions and two founding conditions are investigated. The three environmental factors are uncertainty, munificence and industry maturity. The founding conditions are knowledge and capital.
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Rent seeking and entrepreneurship: internet startups in China Against all odds, China has developed one of the most vibrant Internet industries in the world. According to Atomico (2015), which tracked venture capital (VC)-funded startups in the world, there were 156 Internet startups that had been founded in 2003-14 and that had become billion-dollar companies (based on market capitalization) by the end of 2014 after initial public offerings (IPOs). The United States leads the list with 86 companies, followed by China's 30, and Sweden's 5. All Chinese billion-dollar startups are consumer-related, while billion-dollar startups in other countries include business applications, games, and others. Similarly, the Wall Street Journal tracked unlisted VC-funded startups and identified 78 of them whose market valuation (measured by financing terms in the most recent round of funding) had exceeded one billion dollars in March 2015 (Table 1). The list includes startups in the Internet as well as other sectors. Again, the United States leads the list with 50 ventures, followed by China's 8. All Chinese ventures are Internet-related, if Xiaomi, which tops the list of all startups and sells smartphones on the Internet, is also counted as an Internet company (Dow Jones Venture Source 2015). In short, Chinese startups are numerous, vigorous, and most successful in Internet-based consumer business.
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The Influence of Funding Approaches, Growth Expectations, and Industry Gender Distribution on High‐Growth Women Entrepreneurs. This study examines three key aspects of entrepreneurship associated with women business owners and their ability to achieve high growth: debt versus equity financing, growth expectations, and industry gender distribution. We present a number of theoretical lenses spanning disciplines such as gender studies, entrepreneurship, social psychology, and finance. Using longitudinal data from U.S. startups over an eight‐year period, our research reveals a number of interesting findings. We find that, proportionally, high‐growth women entrepreneurs are more likely to finance their growth with personal and business equity funding. Additionally, women‐owned firms in "feminine industries" are more likely to achieve high growth than women‐owned firms in "non‐feminine industries."
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Venture Capital and Innovation: Which is First? Policy-makers typically interpret positive relations between venture capital (VC) investments and innovations as evidence that VC investments stimulate innovation ( VC-first hypothesis). This interpretation is, however, one-sided because there may be a reverse causality that innovations induce VC investments ( innovation-first hypothesis): an arrival of new technology increases demand for VC. We analyze this causality issue of VC and innovation in the US manufacturing industry using both total factor productivity growth and patent counts as measures of innovation. We find that, consistent with the innovation-first hypothesis, total factor productivity growth is often positively and significantly related with future VC investment. We find little evidence that supports the VC-first hypothesis. [ABSTRACT FROM AUTHOR]
Overcoming Obstacles
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'Max' Brenner Was Pushed Out of His Own Company, Financially Destroyed, and Banned From Making Chocolate For Five Years. But He Learned: 'Hell Has Benefits.'After a crushing legal battle, the founder was ousted from Max Brenner: Chocolate by the Bald Man, and forbidden from any new ventures for five years. Now he sees the darkest time in his life as a gift.
Diversity Virtual Capital Report - 2020
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Diversity in U.S. Startups - 2020 - Ratemyinvestor.comIs a report on the diversity in U.S. venture-backed startups by RateMyInvestor, in partnership with Diversity VC.