Download - Informal Entrepreneurship Presentation
Finding Friends, Family and Fools
Ben SpigelCreative Economies
70%Aldrich, 1999
100
125
150
175
200
2000
Q1
2000
Q3
2001
Q1
2001
Q3
2002
Q1
2002
Q3
2003
Q1
2003
Q3
2004
Q1
2004
Q3
2005
Q1
2005
Q3
2006
Q1
2006
Q3
2007
Q1
2007
Q3
2008
Q1
Housing Price Index (2000 = 100)
There are 5 times more funds available through informal capital
than through formal channels
Reynolds et. al, 2002
Formal sources of capital
Informal sources
of capital
Credit card application
Venture Capital
Angel Investment
Loan from family members and spouse
Self capitalization
Sources of Capital
Culture affects how entrepreneurs access financing
Culture is almost impossible to define• Ethnic culture
• National culture
• Family culture
• Popular culture
• Modern culture
• Traditional culture
• Regional culture
• Local culture
• Corporate culture
• Organizational culture
• Foreign culture
• Petri dish
How do we think about culture in entrepreneurship?
Firm Formation
Entrepreneur
Formal Capital
Informal Capital
•Social capital•Social networks•Ethnic/cultural ties
•Human capital•Venture capital•Business networks
•Regional culture•National/local tax policies
The Entrepreneur
National Culture
Regional Culture
Ethnic Culture
Religious Culture
Family Culture
Where do we go from here?