Efficacy of Networks for Entrepreneurs Raising Finance : A Qualitative Analysis

This research provides a qualitative analysis of the efficacy of networks for entrepreneurs raising finance in the UK. The authors conducted interviews with eight entrepreneurs in North West England based on the three core components of entrepreneurial networks suggested by Hoang and Antoncic (2003) — contents, governance, and structure. It was found that, on the one hand, the importance of networks for entrepreneurs is widely acknowledged and entrepreneurs have a strong desire to get finance from investors with the help of entrepreneurial networks, while on the other hand, getting finance from networks is still dependent on ‘luck' and it is quite hard to impress investors and gain funds from the network. The paper proposes a hypothesis for treating entrepreneurial networks as a kind of market for financing, and suggests constructive ways in which entrepreneurs can use networks to raise finance; and it also offers suggestions to improve network functions to help entrepreneurs gain funds