Financing choices in the first funding round : The case of swedish tech entrepreneurs

University essay from KTH/Skolan för industriell teknik och management (ITM); KTH/Skolan för industriell teknik och management (ITM)

Abstract: Entrepremeurship and what impact entrepreneurs have on the development of a country's society is a well-discussed subject today. During the recent years, entrepreneurs have been characterized as a country's futrue growth since ther are of utmost importance in terms of both innovation, employment and competition. However, one of the main constraints for entrepreneurs today is to gain access to external capital in the initial phase of their business.Therefore, our thesis will highlight the various financing options the entrepreneurs have in the start-up phase and why they choose a particular funding method for their start-up in the first financing round. The focus will be on entrepreneurs within the technological industry and the Swedish market. Moreover, our thesis is based on a qualitative study which includes interviews with six different start-ups in order to analyse how they have financed the start-up of their business and which funding method they prefer and why. A conclusion has been drawn from our study that internal financing is preferred over external which is in line with one of our financing principles that we have used for this study. Our thesis is expected to contribute with a deeper understanding of the entrepreneur's perspective in matters of financing with focus on the tech industry, which we consider as an extra important industry for global development.

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