企业风险投资外文文献翻译小企业.doc

企业风险投资外文文献翻译

(含：英文原文及中文译文)

文献出处：Petreski M. The Role of Venture Capital in Financing Small Businesses[J]. Social Science Electronic Publishing, 2006.

英文原文

The Role of Venture Capital in Financing Small Businesses

Marjan Petreski

Abstract

Venture capital is an important alternative for companies that have difficulties accessing more traditional financing sources and it is a strong financial injection for early-stage companies that do not have evidence for persistent profitability yet. Firstly, deep prescreening process should be performed before investing in small, start-up business because of the information asymmetries, which in turn are the main cause for adverse selection and moral hazard problems. Well performed initial scan ensures good investment. Seed capital provided than enables the firm's set off.

But what is more important is the conclusion that there is much more than just capital that flows from the investors to the organizations in which they invest. Indeed, fresh capital inflow is accompanied with the process of value-adding which provides the company with monitoring, skills, expertise, help and, basically, reputation for attracting further

finance. Consequently, the role of the venture capital in financing small business is tremendous. The paper sheds light on these issues. Keywords: Venture Capital, Small Business, Entrepreneurship, Financing Introduction

Financing opportunities for small businesses have grown in the last few decades. On the other hand, entrepreneurships are crucial for the development of every national economy. Therefore, financing a small business is an issue which continuously captures academic interests.

Great part of the literature acknowledges that entrepreneurship is the fundament of the economic growth and productivity performance (OECD, 2004) and, as such, it triggers creating innovative small firms, which in turn add huge “blocks” in bu ilding the national competitiveness (Pandey et al, 2003). But, on the other hand, because of the high start-up risk and informational inconsistency, small firms are often highly vulnerable (Berger and Udell, 2002) and face with a harsh financing issues due to the investors’ refusal to “feed” the earlystage business (Gans and Stern, 2003). In other words, “the problem is that once yo u have bled your friends and family dry of cash, sold the cat and remortgaged the house, where do you go in order to get the wad of cash needed to progress your get-rich idea further?” (Reynolds, 2000, p.52).

This is the point where the role of venture capital becomes important in financing small businesses. Moreover, economists agree that venture