The Entrepreneur's Idea and Outside Finance: Theory and Evidence about Entrepreneurial Roles

33 Pages Posted: 11 Mar 2015

See all articles by John T. Scott

John T. Scott

Dartmouth College - Department of Economics

Troy J. Scott

RTI International

Date Written: March 9, 2015

Abstract

We study the problem faced by the entrepreneur seeking outside support to turn an entrepreneurial idea into a successful innovation — specifically a successful technological innovation resulting from research and development. The paper develops and tests the hypothesis that as an entrepreneur’s innovative idea becomes more complicated, the entrepreneur will find it more difficult to obtain outside finance and then outside support more generally for the commercialization of the idea. Consequently, the entrepreneur will be more likely to take on additional roles beyond providing the essential idea. The evidence supports the hypothesis that, other things being the same, an entrepreneur with a more complicated idea will have greater difficulty obtaining outside finance and will be more likely to take on the additional roles of development, production, marketing and distribution that are necessary for successful innovation.

Keywords: entrepreneur, outside finance, entrepreneurial roles, Small Business Innovation Research (SBIR) program

JEL Classification: O31; L26; O38; L24; O30; O32

Suggested Citation

Scott, John T. and Scott, Troy J., The Entrepreneur's Idea and Outside Finance: Theory and Evidence about Entrepreneurial Roles (March 9, 2015). Available at SSRN: https://ssrn.com/abstract=2576406 or http://dx.doi.org/10.2139/ssrn.2576406

John T. Scott (Contact Author)

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States

Troy J. Scott

RTI International ( email )

PO Box 12194
Research Triangle Park, NC 27709
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
65
Abstract Views
578
rank
419,297
PlumX Metrics