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Do entrepreneurs get what they want?

Do entrepreneurs get what they want?. Entrepreneurs’ expectations prior to venture creation. Casey Frid Pace University William Gartner Clemson University. nascent financing in the united states, 2005 - 2010. distribution of nascent financing in the u.s. 2005 - 2010.

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Do entrepreneurs get what they want?

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  1. Do entrepreneurs get what they want? Entrepreneurs’ expectations prior to venture creation Casey Frid Pace University William Gartner Clemson University

  2. nascent financing in the united states, 2005 - 2010

  3. distribution of nascent financing in the u.s. 2005 - 2010

  4. frequency & amount of funding by source, 2005 - 2010

  5. (cont.)

  6. differences in finance itemspsed I and psed II • psed I • expected vs. acquired financing • debt and equity • mail in questionnaire items (QD1C QD1J QD1K) • haphazard items from wave to wave • psed II • pre-/post- registration financing • Better coordination among waves • both contain items on financial planning

  7. sources of fundingpsedI – wave q

  8. (cont.)

  9. sources of fundingpsed I – waves r, s, t

  10. (cont.)

  11. start-up capital expectations • qd1c: how certain are you that the business will be able to… Obtain start-up | capital: | Freq. Percent Cum. ---------------------+----------------------------------- Does not apply | 100 18.28 18.28 Very low certainty | 40 7.31 25.59 Low certainty | 87 15.90 41.50 Neither high nor low | 149 27.24 68.74 High certainty | 107 19.56 88.30 Very high certainty | 64 11.70 100.00 ---------------------+----------------------------------- Total | 547 100.00

  12. Obtain a banks help: | Freq. Percent Cum. ---------------------+----------------------------------- Does not apply | 123 22.45 22.45 Very low certainty | 66 12.04 34.49 Low certainty | 98 17.88 52.37 Neither high nor low | 147 26.82 79.20 High certainty | 63 11.50 90.69 Very high certainty | 51 9.31 100.00 ---------------------+----------------------------------- Total | 548 100.00 Obtain venture | capitalists help: | Freq. Percent Cum. ---------------------+----------------------------------- Does not apply | 190 34.61 34.61 Very low certainty | 85 15.48 50.09 Low certainty | 67 12.20 62.30 Neither high nor low | 138 25.14 87.43 High certainty | 48 8.74 96.17 Very high certainty | 21 3.83 100.00 ---------------------+----------------------------------- Total | 549 100.00

  13. external $: certainty by gender | R GENDER :NANCY Obtain start-up | CARTER CLEANED capital: | Male :CA Female:CA | ---------------------+----------------------+ Does not apply | 30 70 | | 11.36 24.73 | ---------------------+----------------------+ Very low certainty | 21 19 | | 7.95 6.71 | ---------------------+----------------------+ Low certainty | 55 32 | | 20.83 11.31 | ---------------------+----------------------+ Neither high nor low | 66 83 | | 25.00 29.33 | ---------------------+----------------------+ High certainty | 56 51 | | 21.21 18.02 | ---------------------+----------------------+ Very high certainty | 36 28 | | 13.64 9.89 | ---------------------+----------------------+ Total | 264 283 | | 100.00 100.00 |

  14. bank $: certainty by race | R ETHNIC :NCRACE Obtain a banks help: | WHITE BLACK HISPANIC/ OTHER | ---------------------+--------------------------------------------+ Does not apply | 88 23 9 1 | | 23.78 17.83 30.00 7.14 | ---------------------+--------------------------------------------+ Very low certainty | 45 16 3 2 | | 12.16 12.40 10.00 14.29 | ---------------------+--------------------------------------------+ Low certainty | 65 20 9 4 | | 17.57 15.50 30.00 28.57 | ---------------------+--------------------------------------------+ Neither high nor low | 101 35 5 4 | | 27.30 27.13 16.67 28.57 | ---------------------+--------------------------------------------+ High certainty | 40 20 1 2 | | 10.81 15.50 3.33 14.29 | ---------------------+--------------------------------------------+ Very high certainty | 31 15 3 1 | | 8.38 11.63 10.00 7.14 | ---------------------+--------------------------------------------+ Total | 370 129 30 14 | | 100.00 100.00 100.00 100.00 |

  15. bank $: acquired by race | R ETHNIC acq_bank | WHITE BLACK HISPANIC/ OTHER | -----------+--------------------------------------------+ 1 | 65 11 1 1 | | 55.08 23.91 14.29 20.00 | -----------+--------------------------------------------+ 2 | 53 35 6 4 | | 44.92 76.09 85.71 80.00 | -----------+--------------------------------------------+ Total | 118 46 7 5 | | 100.00 100.00 100.00 100.00 |

  16. acquired funds • total capital acquired • males=$95,383; females=$71,018 • whites=$107,765; African-Americans=$37,288; Hispanics=$41,730 • post-college degree=$191,221; no high school degree=$66,818 • external capital acquired • males=$75,750; females=$53,000 • whites=$82,806; African-Americans=$18,259; Hispanics=$10,112

  17. acquired funds (cont.) • bank funds acquired • males=$41,905; females=$31,103 • whites=$47,232; African-Americans=$6,542; Hispanics=$0 • post-college=$75,000; no high school=$74,000 • personal funds used • males=$50,398; females=$37,935 • whites=$53,508; African-Americans=$27,087; Hispanics=$38,161 • post-college=$78,156; no high school degree=$33,893

  18. findings(expectations by gender) • similar levels of certainty regarding external funding acquisition • …although females with low expectations say funding doesn’t apply while males express low certainty

  19. findings(expectations by race) • no differences in level of certainty in obtaining external funding • …though 70% of Hispanics say obtaining bank funding does not apply or is unlikely • among those seeking bank financing, only 23% of African-Americans and 14% of Hispanics acquired it compared to 55% of whites • 25% of whites acquired external funds compared to 14% of African-Americans and 12% of Hispanics

  20. findings(expectations by education) • external capital expectations are similar • …though 21% of those without a high school degree expressed very high certainty of obtaining external capital • …and 17% for VC, and 26% for banks • 90% without a high school degree failed to acquire external funds

  21. moving forward • are females more realistic when setting expectations? • how does this translate into goal accomplishment / actions / behaviors? • ignorance is bliss? does less formal education lead to over-optimistic expectations? • expectation or location? minority acquisition of bank financing

  22. contact: cj.frid@gmail.com gartner@clemson.edu Casey Frid Pace University William Gartner Clemson University

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