User:S4552371/Entrepreneurship

Entrepreneurship is the activity of setting up a business or businesses, taking on financial risks in the hope of profit, especially when seeing a new opportunity.

An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures. Entrepreneurs play a key role in any economy, using the skills and initiative necessary to anticipate needs and bring good new ideas to the market. Entrepreneurs who prove to be successful in taking on the risks of a startup are rewarded with profits, fame, and continued growth opportunities. Those who fail, suffer losses, and become less prevalent in the markets.

A broader definition of the term is sometimes used, especially in the field of economics. Entrepreneurs have the ability to find and act upon opportunities to translate inventions or technologies into products and services: "The entrepreneur is able to recognize the commercial potential of the invention and organize the capital, talent, and other resources that turn an invention into a commercially viable innovation." In this sense, the term "entrepreneurship" also captures innovative activities on the part of established firms, in addition to similar activities on the part of new businesses. Yet, the definition is still narrow in the sense that it still focuses on the creation of economic (commercial) value.

Small Business Entrepreneurship
A small business is an organization, partnership or sole proprietorship that has fewer resources and annual revenue than a medium or large company. Small businesses aren’t always concerned with growing or becoming more profitable, they are motivated by the work they produce daily. Their goal is to ensure longevity and continual development in the business.Owners are more driven by small gains over time and improving efficiency than competing with other businesses. They want to ensure the business continues to operate smoothly and steadily.While small businesses can still be competitive, they are made up of individuals who care less about wins or profit and care more about their recurring duties and obligations. The overall strategy is to ensure that there is a continuous stream of work and money for the team. While there may be uncertainty early in the business, after reaching certain milestones, small businesses become comfortable in their processes and routines.

Social Entrepreneurship
Social entrepreneurship is an approach by individuals, groups, start-up companies or entrepreneurs, in which they develop, fund and implement solutions to social, cultural, or environmental issues.

Examples of social entrepreneurship include microfinance institutions, educational programs, providing banking services in underserved areas and helping children orphaned by epidemic disease. Their efforts are connected to a notion of addressing unmet needs within communities that have been overlooked or not granted access to services, products, or base essentials available in more developed communities.

Social entrepreneurs can include a range of career types and professional backgrounds, ranging from social work and community development to entrepreneurship and environmental science. Well-known social entrepreneur Blake Mycoskie became the chief shoe giver and founder of TOMS Shoes in 2006, investing $300,000 of his own money in the company. TOMS pledged to donate one pair of shoes for every one sold, and now expands the “One-For-One” campaign to support water, sight, birth, and anti-bullying initiatives. Through the TOMS brand, Mycoskie has raised awareness about issues like global poverty and health. As of 2019, the organization had provided people in developing countries with 95 million pairs of shoes and more than 722,000 weeks of safe water. Moreover, the TOMS Eyewear program has helped to restore sight in more than 780,000 individuals by giving recipients prescriptive glasses or surgery.

Ethnic Entrepreneurship
Ethnic entrepreneurship is loosely defined as business-ownership by immigrant andethnic-group members.Essentially, the ethnic entrepreneurship literature argues that ethnic group affiliation, or ethnic group affiliation and the relationship of the ethnic group to the opportunity structure of the economy, combine to explain entrepreneurial outcomes.

Imitator Entrepreneurship
Imitators are entrepreneurs who business ideas of individuals or firms as inspiration for their products. Imitator Entrepreneurship create products and services within the market better and more profitable. An imitator is a combination between an innovator and a hustler. They are willing to think of new production ideas however they start their process by imitating other products then improvising.

These entrepreneurs create a safe market of products by copying a successful business model. They iterate a certain feature or innovation in a particular product or the business model to make it more appealing and have a competitive edge over the current market. The greatest advantage of copycat entrepreneurs is that they know the opportunities and shortcomings of the business and have a proven business model to work on.

Entreprenurial Behavior
Entrepreneurial behavior underlies the inclination to undertake invention and innovation, including the creation of something new as well as the distribution and adoption of the new throughout society. It is the behavior most likely exhibited by entrepreneurship. An alternative is managerial behavior, which is a preference for maintaining the status quo over changing it. Entrepreneurial behavioral is one of two behavioral alternatives underlying the desire to undertake innovations and to change the status quo. The other is managerial behavior. Entrepreneurial behavior embraces innovation, is motivated to seek changes in the status quo, draws satisfaction from institutional changes. In contrast, managerial behavior is a preference for maintaining the status quo.The underlying source of entrepreneurial behavior is a relative preference for novel information over redundant information. Both types of information are important to the fight or flight response to a threat. Novel information reveals potential threats that results in automatic physiological responses, which is more satisfying to some than it is to others.

Angel Investors
Angel or informal investors are experienced entrepreneurs who have some funds available (often from previously exited ventures) and invest those in new companies to help other entrepreneurs succeed in their business. Angel investments start around 50,000 dollars/euros and can amount up to (or more than) a million dollars/euros, as angels sometimes invest together in groups.

When to choose this source of financing: Go for an angel if you are looking for seed funding within the abovementioned range. Angels typically offer “smart capital”: not just money, but also networking opportunities and knowledge within specific sectors. Try to find an angel that fits with your company in terms of experience and sector knowledge. Angels spot new investment opportunities through their network, but (for instance) also through platforms such as AngelList, Crunchbase and f6s.

Crowdfunding
Crowdfunding is performed via an online platform where entrepreneurs offer investment opportunities on one side of the platform and on the other side of the platform, a large group of people invest small amounts to meet the entrepreneur’s investment need.

3 Types Of Crowdfunding
When to choose this source of financing: In general, there are three types of crowdfunding: 1)loans, 2)pre-orders/donations and 3)convertible loans. Loan crowdfunding is available when risk of product profile is too high therefore loans from banks are unlikely to occur. Pre-orders are evidently one of the best sources of crowdfunding when producers have a prototype available. In order to test the product market fit, start-ups more than often cannot finance the production of the first batch of actual products. Pre-orders/donations would be an efficient method to understand what is the demand of the new product while gaining funds for production. Well-known examples of platforms offering these types of crowdfunding are Kickstarter and Indiegogo. They are mainly suitable for products, projects or gadgets aimed at the consumer market and have a strong design element to them.

Subsidies
A huge number of financial schemes and subsidies exist as a form or entrepreneurial resource. The aim of subsidies and schemes is typically to stimulate entrepreneurship, innovation, R&D or economic growth within a certain geographical area. That is why every region, country and even, for instance, the entire European Union has its own subsidies. Subsidies motivate individuals whom are looking to start their own brand or business with limited capital available, giving them the opportunity to initiate business ideas through subsidiary plans.

Initial Public Offering
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. Public share issuance allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes share premiums for current private investors. Meanwhile, it also allows public investors to participate in the offering.

Before an IPO, a company is private, which means that it often only has a limited number of investors that have invested early stage or growth capital. Think of the founders, angels and VC firms for instance.When to choose this source of financing: For an initial public offering to be successful, a company must be able to demonstrate years of strong growth, and its proposition typically includes a certain network effect/scalability. Growth can be defined in several ways. This can be turnover or profit but also, for example, the number of customers or active users. For example, Spotify has been a loss-making company for years, but has been growing enormously in terms of turnover and users.

A company also has to demonstrate transparency and confidence that growth will continue in future years because it has to win the trust of the general public that the value of the shares (which are bought by the public during the IPO) will rise in the future so that they can make a profit on their investment.