Role of Soft Infrastructure in Fostering Startup Businesses During a Lack of Finance

Yeganeh Eghbalnia

Chapter 5 in Investment in Startups and Small Business Financing, 2021, pp 137-162 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In emerging and developing countries, the development of soft skills has been less emphasized. Attempts were made to get funding on the seed rounds by the founders, investors care the most to get the desired return on their investment, and employees are interested in securing their job compensation with minimum effort level. As a part of a firm’s culture, there are essential soft factors which can establish a strong drive for succeeding and creating a high-commitment culture between founders, investors, employees, which can shape a vibrant culture of survival, growth, and success in a firm. The present study aimed to evaluate financial toughness, share option, networking, and performance management. In fact, the main hypothesis is whether startups with these attributes rely less on external funding or not. After collecting data from active startups in the Iranian startup ecosystem, no evidence was available regarding a strong association between the existence of these soft factors in the firm and the firm’s survival/success rate.

Keywords: Small and Medium-Sized Enterprises; SMEs; Startups; Finance; SME Finance; Corporate Finance; Micro-Finance; Risky Businesses; Asymmetry of information; Investment; Venture Capital; Credit Guarantee; Credit Guarantee Fund; Credit Guarantee Corporation; Credit Guarantee Scheme; Korea Credit Guarantee Fund; KODIT; Small Businesses; Hometown Investment Trust Fund; HIT Funds Techno-Economic Feasibility Study; Tech Startup; Soft Infrastructure; Startup Ecosystem; Credit Guarantee Premium Rate; Regulatory Frameworks; Leveraging; Asia; East Asia; South East Asia; ASEAN; South Asia; Central Asia; Iran; Kazakhstan; Malaysia; Japan; Thailand; Naoyuki Yoshino; Farhad Taghizadeh-Hesary; Peter Morgan; Chul Ju Kim; Daehee Yoon; Islamic Banking; Islamic; Finance; The Fourth Industrial Revolution; Damu Fund; Inclusive Growth; Financial Inclusion (search for similar items in EconPapers)
JEL-codes: G3 O1 O16 (search for similar items in EconPapers)
Date: 2021
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