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As the body of literature surrounding the subject of entrepreneurial finance develops, both academics and practitioners will have more tools available for understanding the financial aspects of successfully establishing and growing a new business.  In examining entrepreneurial finance, factors such as opportunity identification and evaluation, venture establishment, financing, valuation, and exiting a venture have been explored.  Consideration of these topics leads to a more complete understanding of the process that successful entrepreneurs follow in entrepreneurial ventures.

Understanding the methods of opportunity identification and evaluation, combined with identifying key aspects of those with greater probability of success, may lead to a higher success rate for the ventures that are established to pursue those opportunities.  Of the various methods and theories available for evaluating opportunities, the scholarly literature generally agrees on the importance of a large market that is experiencing significant growth.  After market examination, success depends on the ability of the entrepreneur or the entrepreneurial team and their fit with the opportunity.

With a proper opportunity identified, success next depends on the entrepreneur’s ability to develop and execute a plan to establish a venture to exploit the opportunity.  There are significant theoretical and conceptual steps, as well as practical physical steps, to take in establishing a venture.  The conceptual steps to be taken include modeling the proposed venture, planning, and testing which validate the premises of the opportunity identification stage.  This additional analysis likely will contribute greatly to entrepreneurial success as the business is created and run.

Creating a firm may require significant financial resources.  Its success rests on the entrepreneur’s ability to gather and marshal those resources towards his goal.  The sources of financing are varied, including internal and external debt as well as equity.  The capital structure used and the combination of the sources of financing in entrepreneurial firms is different from large firms, because of the profound influence of the entrepreneur’s choices and preferences, as well as the sources that are available to the firm at a given stage of development.

Valuation of a small firm is crucial an entrepreneur’s ability to plan strategically and evaluate his firm’s success.  Valuing a small firm is a difficult process.  Nevertheless, neglecting it deprives the entrepreneur of critical management tools.  Valuation practitioners and entrepreneurs should understand the various methods that may be used in valuations and the impact they have on the final value.  The most accurate approach is the discounted cash flow method.  Both analysts and entrepreneurs would be well advised to learn and use it.

Entrepreneurial harvesting or exit from the firm is an underdeveloped area in entrepreneurial finance literature.  The lack of academic research in this area is surprising because of its importance to the entrepreneurial process.  All small firms must navigate the process of the entrepreneur’s withdrawing from the firm.  Equally, all entrepreneurs are highly interested in their ability to extract the value that they have created.  In a sense, the ultimate success of an entrepreneurial venture is the satisfaction of the entrepreneur at his exit or at the venture’s close.  This would seem to indicate the importance of further academic study of this process.