Funding Preferences of Young Entrepreneurs of Gujarat: An Empirical Study

Abstract

This study makes an attempt to explore the funding preferences of young entrepreneurs of Gujarat towards financing their ventures. For this research, ventures in the knowledge based sector have been selected. The findings revealed that in the initial stages of venture development, these entrepreneurs utilized their personal savings and funds from their family and friends. They have all practiced bootstrapping extensively during the early years. There were not many cases of external funding. The awareness of these entrepreneurs towards risk capital such as angel and venture capital funding was found to be less. The study concludes with various suggestions for better penetrations of early stage financing and support mechanism in Gujarat such as strengthening the role of incubation centres, organizing business plan competitions and raising awareness of the entrepreneurs towards risk (equity) capital options.

Keywords: Venture Capital, Angel Investors, Bootstrapping Techniques, Incubation centres, Entrepreneurs

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