Special issue on small business financing: New actors, new opportunities, new challenges

This special issue of the Journal of Small Business Management builds on the proceedings of the Third Entrepreneurial Finance conference that was held in Milan (Italy) in June 2018, hosted by the School of Management of Politecnico di Milano. Entrepreneurial finance may be defined as the study of capital allocation applied to new ventures. In the academic literature, it addresses key questions that challenge all entrepreneurs: How much money can and should be raised; when should it be raised and from whom; how should funding contracts and exit decisions be structured. Up to the 2000s, entrepreneurial finance mostly analyzed the role of professional sophisticated investors, like venture capital and business angels. Yet recent developments in technology and regulation have led to new forms of entrepreneurial finance. Moreover, microbusinesses persistently had been far from the attention of the market because of the relevant risk and information asymmetry, thus excluding large sections of the population from the access to liquidity, especially in developing countries, and calling for a larger democratization of entrepreneurial finance (Cumming et al., 2019). New players and new ways to finance entrepreneurial firms have emerged or will emerge (Block et al., 2018). Some financial instruments like crowdfunding in its various forms have found their way into the entrepreneur’s toolbox and are on their way to becoming mature, while others like initial coin offerings (ICOs) are only now becoming available but have a huge potential to shape the entrepreneurial finance landscape in the future (Adhami et al., 2018). The importance of supporting unlisted small companies is gaining attention in the public authorities’ agenda: SMEs significantly contribute to the industrial value added worldwide and represent the “backbone” of the industrial activity. Nevertheless, they face more problems in accessing finance because of larger information asymmetry (Vos et al., 2007), lack of competence (Berger & Udell, 2006), imperfect screening from lenders (Kon & Storey, 2003), and scarce attractiveness for professional Collapse.