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Rein Peterson is Magna International Professor of Entrepreneurial Studies, York University, Toronto, Canada, and is currently on sabbatical leave as a senior research fellow at the National Centre for Management Research and Development at the University of Western Ontario, Canada. Joel Shulman is Assistant Professor of Finance at Babson College, Massachusetts, USA. In this paper they examine financing problems reported in 4,400 interviews conducted in 12 countries-six developed and six developing. The data was originally collected for the 1984 International Small Business Congress in Amsterdam by SKIM Industries Market Research of Rotterdam, Netherlands. The results of the study indicate that a 'finance gap' may indeed exist among many firms in the less developed countries and in fact may be quite severe. The gap seems to exist, albeit to a lesser extent, among young/small firms in developed countries. It seems apparent that while asymmetric information and agency cost theories help describe part of the results, firms in less economically developed countries also suffer from other more fundamental problems.

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Purpose -The purpose of this paper is to present the development of the model of the strategic entrepreneurial unit (SEU) as an alternative means for large firms to harness the entrepreneurial spirit and creation of intellectual property. Design/methodology/approach -Several competing organizational models are critiqued based on factors that will impact the growth and return performance of the unit. The organizational units examined include corporate intrapreneurship, corporate spinout, corporate venturing, corporate venturing with venture capitalist participation, and the SEU. Findings -Theoretically, by design, the SEU is a superior growth model to incubate newly created intellectual property. The achievement of greater growth and return with the SEU is shown because of equity compensation incentives, facilitator as liaison between the parent and new SEU with no control over harvest timing, lifeline back to parent for employees, intellectual property settlement prior to unit formation, and the financing provided by the internal capital market of the parent.Research limitations/implications -The general review paper is conceptual in nature and would benefit from empirical evidence research. The case study method is proposed as a means to discern the efficacy of the SEU relative to other organizational forms. Originality/value -The paper advances a business unit form to foster higher performance from new ideas within the confines of a large corporation.Keywords Entrepreneurialism, Business development, Strategic business units, United States of America Paper type General review Bureaucratic companies begin as entrepreneurial firmsLong before large, public organizations become stagnate and sluggish, they often begin as small, entrepreneurial companies. They have dynamic, visionary leaders driving their organization forward through innovation, charisma, and hard work. As these companies grow and expand their market share, individuals flock to them seeking employment. And why not? They are on a roll. They have momentum. These high growth companies have the opportunity to select the best and the brightest. They raise cheap capital from the US capital markets through an initial public offering (IPO) and everything seems to be going right. They have bright, happy people, plenty of cheap capital to fuel expansion, Wall Street analysts singing their praises, and soaring dreams and stock market capitalization.