Discovery in the New Economy — Why Entrepreneurs may not Contract with Investors

  • Helmut M. Dietl
  • Egon Franck
  • Stefan Winter
Conference paper


As highlighted by Figure 1, New Economy firms usually run through three typical development stages: development of a business plan, venture capital investment and Initial Public Offering (IPO). Each single development stage typically coincides with a specific phase of the innovation process. During the discovery phase, an entrepreneur finds a new business opportunity and develops a business plan. In the New Economy, this phase is usually not financed by investors. The entrepreneur typically stays self-employed. Investors enter the scene only after a new business plan has been discovered. The first investors are venture capitalists, who verify the economic potential of the business model. Usually, only a small number of business plans passes the verification test and is actually financed by venture capitalists. Of the business plans that have passed the verification test, again only a very limited number reaches the public capital market as an IPO. It typically takes several years until a business plan reaches the capital market and public investors finance the large scale exploitation of this business plan.


Venture Capital Initial Public Offering Business Opportunity Business Plan Reservation Wage 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2004

Authors and Affiliations

  • Helmut M. Dietl
  • Egon Franck
  • Stefan Winter

There are no affiliations available

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