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Harvesting a ‘Lost’ Investment: case study of a financial innovation
Author(s) -
Hindle Kevin
Publication year - 1993
Publication title -
creativity and innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.148
H-Index - 60
eISSN - 1467-8691
pISSN - 0963-1690
DOI - 10.1111/j.1467-8691.1993.tb00071.x
Subject(s) - insolvency , restructuring , equity (law) , debt , business , venture capital , finance , leveraged buyout , financial system , initial public offering , economics , private equity , political science , law
In the field of Entrepreneurial research, financial innovations have been less studied and reported than product or process innovations. A case example is presented with implications for a large number of firms requiring financial restructuring as a precondition to attracting equity investmemnt. An insolvent asparagus exporter with high growth potential offered opportunity to test a model of financial restructuring and unlisted equity marketing, the ersatz venture capital (EVC) hypothesis. A business plan written in accordance with EVC prescriptions revealed the company's potential and attracted investors. It is argued that the approach may help solve two pressing problems of the Australian economy: re‐vitalisation of businesses rendered insolvent by excessive debt and stimulation of a depressed venture capital market.