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Global Entrepreneurship Monitor: 2004 Financing Report

Posted: 24 Nov 2009  

Stephen A Hunt

London Business School

William D. Bygrave

Babson College - Arthur M. Blank Center for Entrepreneurship

Date Written: 2005


The financing opportunities for entrepreneurs around the world are analyzed.The data used are primarily from the 2004 Global Entrepreneurship Monitor (GEM) study, with supplemental data from the five previous years of the study.Thirty-four countries are included in the analysis, covering all continents except Antarctica. Three investigation methods are used in the series of national GEM studies: an adult population survey; interviews with entrepreneurship experts in each country; and selected national and demographic data.The GEM model examines general framework conditions for economic growth and nine entrepreneurial framework conditions. The analysis of the informal financing and venture capital obtained by entrepreneurs indicates that entrepreneurs provide 65.8% of the capital for their new businesses.The total amount needed on average for these new businesses is $53,673.Furthermore, the findings lead to the conclusion that entrepreneurs should seek financing through sources such as friends and family instead of venture capitalists, as fewer than one in 10,000 startups are able to utilize venture capital when launching their businesses. In determining what factors affect informal investors, a correlation was found between taxes and the amount of informal investing - specifically that higher taxes impede this investing.No correlation was found between taxes and the amount of venture capital, which can be attributed to the fact that only a very small amount of venture capital comes from individuals and corporations. Given these results, more research is needed on individual and informal investors.(SRD)

Keywords: Self financing, Experimental/primary research, Global economy, Financing, Venture capital, Angel capital, Angel investors, Startups

Suggested Citation

Hunt, Stephen A and Bygrave, William D., Global Entrepreneurship Monitor: 2004 Financing Report (2005). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship. Available at SSRN:

Stephen A Hunt (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

William Bygrave

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

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