D espite the government's efforts to support entrepreneurship, the major share of startup funding in transitional economies comes from the owners' own funds and ''love capital'' rather than from institutional sources (banks, venture funds, etc.). This increases the asymmetry of information concerning the capabilities of the emerging businesses for potential investors, and thus hinders the development of entrepreneurship as a whole.The paper considers the key determinants affecting the decisions made by entrepreneurial start-ups when choosing from a number of ways to finance their business in transitional economies. An attempt has been made to build models for an adequate prediction of the financial strategies of early entrepreneurs. A number of hypotheses have been put forward to verify external and internal factors influencing the financial choices of early entrepreneurs.Hypotheses were tested on a survey sample of early entrepreneurs from seven transitional economies,
The article presents a critical analysis of industrial surveys. The results of some top managers' surveys conducted in the key Russian industries are compared with the official statistics of Goscomstat RF. Both trustworthiness and usefulness of such surveys for economic analysis are subjected to reasonable doubt. A number of hypotheses is put forward to expain the situation.
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