Pro forma estimation of financial statements often builds on constant ratios to sales revenue. While constant ratios may be relevant for established firms operating in predictable industries, they yield noninformative and possibly misleading information when applied to new firms, and...

We examine whether and how investors' reliance on financial information is affected by the rate of sales growth of a start-up venture. We find that investors discern between firms by the extent to which their products are adopted by the market. For firms that failed to increased their sales...

This paper draws the attention of the new researchers to what has been going on in the Behavioral Finance front and how we can draw from and expand upon such works. By doing so, we hope to find more convincing answers to the key questions that continue to define our fascinating academic niche.

The purpose of this study was to examine previous literature on Entrepreneurs’ and small businesses’ (hereinafter simply, Entrepreneurs) required rates of return coupled with empirical observation of small business returns. It is hoped that this study provides Entrepreneurs with a guideline...

Firm entry has been proven to be fundamental for job creation in transition economies. The creation of new ventures as well as their survival and expansion depends on the business environment of the country. It is therefore important to adopt policies aimed at improving the framework conditions...

Two main approaches have been utilized to explain the relationship between entrepreneurs and their investors. The first is based on the separation of ownership and management i.e. the so-called principal-agent approach. The second emphasizes trust and cooperation in the relationship. This...

We empirically examine a sample of over 350 entrepreneurial firms that successfully receive an SBA guaranteed loan. The first portion of the paper contains descriptive statistics that lend anecdotal evidence concerning the organization type of borrowers, the incidence of collateral, the reasons...

We examine the relationship between the small business loan guarantee and the agency problem of small firms. We then recommend financial instruments or financial contracts that can minimize of eliminate the moral hazard problem.

Although the national media has given increased attention to the venture capital process, misconceptions continue to proliferate. One often hears about the incredible capital gains of IPO share prices. This paper refutes the myth that investors demand very high rates of return to compensate for...