Start-up and Growth Financing

  • Christine K. Volkmann
  • Kim Oliver Tokarski
  • Marc Grünhagen


Knowledge of financing strategies as well as the function and mechanism of different financing instruments is necessary to recognize and counteract in good time threatening financing crises and liquidity bottlenecks. Within this context, special importance should be attached to the optimization of the capital and risk structure during the phases of start-up and growth. The result of having low-equity equipment is often low economic strength (as became apparent, for example, in the large number of insolvencies of young enterprises during the period from 2000 to 2002 when the “new economy bubble” burst) [Rovenpor (2004)]. Numerous young enterprises had promising business models at their disposal, yet the main reasons for their insolvencies were financing problems which they were unable to resolve. The founders were in many cases not in a position to obtain external capital for overcoming the crisis and to manage their payment flows effectively. For example, for the US venture capital market, which is the world 's largest, data from the National Venture Capital Association show that back in 2000 US VC companies had provided more than 100 billion USD while by 2003 the investment volume dropped below 20 billion USD [; cf. also Timmons/Spinelli (2004)].


Venture Capital Initial Public Offering Private Equity Equity Capital Equity Financing 
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Recommended Literature

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Copyright information

© Gabler Verlag | Springer Fachmedien Wiesbaden GmbH 2010

Authors and Affiliations

  • Christine K. Volkmann
    • 1
  • Kim Oliver Tokarski
    • 2
  • Marc Grünhagen
    • 3
  1. 1.University of WuppertalGermany
  2. 2.University of Applied SciencesSwitzerland
  3. 3.University of WuppertalGermany

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