Entrepreneurial finance journeys: embeddedness and the finance escalator

Ekaterina Murzacheva, Jonathan Levie

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    This paper re-visits the traditional model of the finance escalator, which outlines alternative financial pathways for entrepreneurs depending on their aspirations and stage of development. Building on social, spatial and institutional embeddedness perspectives, the dynamic and interactional challenges of financial decisions are captured through an exploratory interpretivist approach. Ten early funding journeys of entrepreneurs in Scotland, all of whom sought external funding, were scrutinized with the objective of revealing motivations, reasoning, and patterns behind funding decisions. Surprisingly, these entrepreneurs all initially sought value-added financial capital, but issues including control (perceived as ownership), speed of access, and external environmental pressures caused them to accept offers (often unsolicited) from familiar sources. As a result, a revised finance escalator is proposed. The extent to which these findings are context specific is discussed.
    Original languageEnglish
    Pages (from-to)185-214
    JournalVenture Capital
    Issue number2
    Early online date19 May 2020
    Publication statusPublished - Jun 2020


    • finance escalator
    • entrepreneurship
    • embeddedness
    • financial decision-making
    • financial capital


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