ABSTRACT
Entrepreneurship is the backbone of developed economies and a critical factor in the expansion of employment opportunities, economic activity, and international trade. According to the World Bank, small and medium-sized enterprises (SMEs) are responsible for approximately 90% of all businesses, more than 50% of employment globally, and seven out of every ten jobs in developing markets. Despite the growth and importance of entrepreneurship in the nations’ economies, the most difficult task confronting entrepreneurs is raising adequate seed capital and while several initiatives have been launched in an attempt to bridge this gap over the years, a comparatively small number of SMEs actually obtain finance from traditional sources. Entrepreneurial finance has hitherto concentrated on traditional sources of funding, but with the advent of technology, the financing sources for entrepreneurship have taken a new and additional dimension. In this chapter, we explore the definition of a small business, the characteristics of entrepreneurs, capital structure of a business and sources of entrepreneurial finance. In addition to looking at crowdfunding, a relatively new type of finance that may be used to start and expand businesses, we also examine the more conventional options accessible to start-ups.
