The financing of e-business firms

Alan Beirne, Jim Stewart

International Journal of Business Performance Management, 2002, vol. 4, issue 2/3/4, 161-181

Abstract: This paper examines key strategic issues in the financing of e-business firms. E-business firms form part of what is called the "new economy". The paper focuses on seven Irish e-business firms quoted on NASDAQ. The paper argues that the nature of the assets of e-business firms' labour intensive and employee knowledge intensive restricts the use of debt finance. These characteristics also have implications for leakage of knowledge and dissipation of assets. In these circumstances stock options are an appropriate form of remuneration and help create "sticky assets". Because of the nature of assets and risk profile, equity is the most appropriate form of long term finance, but reliance on outside equity creates corporate governance issues and is risky, given control by inside shareholders and the widespread use of options. The paper concludes that managing internal and external finance is one of the key strategic issues facing e-business firms and that this may be most easily achieved with strong linkages/ownership with "old economy" firms.

Keywords: e-business; financing; options; insider control; financial risk. (search for similar items in EconPapers)
Date: 2002
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=113 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbpma:v:4:y:2002:i:2/3/4:p:161-181

Access Statistics for this article

More articles in International Journal of Business Performance Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().