Foundations and Trends® in Entrepreneurship > Vol 15 > Issue 3-4

Financing Innovation: Challenges, Opportunities, and Trends

By Davide Hahn, University of Bergamo, Italy, | Tommaso Minola, University of Bergamo, Italy, | Silvio Vismara, University of Bergamo, Italy, and Ghent University, Belgium, | Vincenzo De Stasio, University of Bergamo, Italy,

Suggested Citation
Davide Hahn, Tommaso Minola, Silvio Vismara and Vincenzo De Stasio (2019), "Financing Innovation: Challenges, Opportunities, and Trends", Foundations and Trends® in Entrepreneurship: Vol. 15: No. 3-4, pp 328-367.

Publication Date: 04 Dec 2019
© 2019 Davide Hahn, Tommaso Minola, Silvio Vismara and Vincenzo De Stasio
New business financing: Public equity and IPOs,  High technology: Technology-based new firms,  Corporate finance: Corporate financing,  Strategic management of technology and innovation

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In this article:
1. Introduction
2. Challenges Associated with Innovation Investment
3. Evidence of Capital Structures of Innovators and Financial Constraints
4. Private and Public Solutions to Underprovision of Finance for Innovation
5. Financial Innovations for Financing Innovation
6. Future Research Directions
7. Conclusions


The aim of this section is to offer a comprehensive review of research on the financing of innovation. After presenting the challenges associated with financing innovation from a theoretical point of view, the section synthetizes extant literature to show how these challenges constrain the process of raising funds and investing in innovation. The section then describes the role of business angels and venture capital funds, as well as public policy initiatives in support of these investors. Albeit these instruments have been traditionally conceptualized as remedies to these problems, the section also stresses their limitations and critical aspects. Finally, the section provides an overview of the most recent and emerging tools of financing innovation, such as crowdfunding. In particular, we adopt a business-law perspective to describe these instruments and illustrate the trade-off between the protection of investors and the facilitation of innovation, which challenges both scholars and policymakers. The section concludes with a synthetic research agenda with the aim to encourage future research on the functioning of these financial innovations.

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Table of contents:
1. Introduction
2. Financing Innovation: Challenges, Opportunities, and Trends
3. Innovation in Schumpeterian-type Firms: Knowledge Collaboration or Knowledge Spillover?
4. Disciplinary Perspectives on Innovation: Management
5. A Marketing Perspective on Innovation

Disciplinary Perspectives on Innovation

While innovation has emerged as a crucial topic, it remains a phenomenon and not an academic discipline. Just as for the more general theme of entrepreneurship, scholarship draws on a broad spectrum of academic disciplines to shed light on innovation from the particular scholarly discipline. The purpose of this title in Foundations and Trends in Entrepreneurship is to provide a disciplinary perspective on the role of innovation. In particular, this issue offers several distinct disciplinary perspectives including from the academic discipline of finance (“Financing Innovation: Challenges, Opportunities, and Trends” by Davide Hahn, Tommaso Minola, Silvio Vismara and Vincenzo De Stasio), from the entrepreneurship discipline (“Innovation in Schumpeter-Type Firms: Knowledge Collaboration or Knowledge Spillover? by Maksim Belitski), from the management perspective (“Disciplinary Perspectives on Innovation: Management” by James Cunningham et al.) and from the marketing discipline (“A Marketing Perspective on Innovation” by Jakki J. Mohr). Taken together these individual contributions make it clear that the topic of innovation is enriched by drawing on the insights and perspectives of a broad spectrum of scholarly disciplines.



Foundations and Trends® in Entrepreneurship, Volume 15, Issue 3-4 Special Issue: Disciplinary Perspectives on Innovation
See the other articles that are also part of this special issue.