创业金融学软件行业的简析.docxVIP

Funding environment for new firms in Software industryIntroductionSoftware industry is the heart of information technologies and the industry areincreasing constantly. In daily life, it is easy tofind that there are many small software companies around us. They are a few people or more than dozens. Based on several researches, software companies report many funding problems.This paper aims to conclude the funding environment of the softwareindustry for new companies. Software firms are fastest growing companiesand goes through theearly stages of development quickly. Moreover, primary funding source for software companies come from house mortgage/re - mortgage and personalsaving. Software firmsseem to get the pecking order theory whilst financing their business growthand development. However, venture capital is another key financing pathway for small firms in the software industry. Financial constraints of small software firms not only exist in supply side but also occur in supply side.How much initial capital needs for a new software company?At the beginning of the business, money is essential, but there is not a concretequantity of money requirements that small software companies to do business (Amit, 1990). Starting capital requirement is not significant due to the software industry is a leadingtechnologybusiness.After all, it base on thenewideaand innovation of enterprises. Even though a computer and a compiler are enough if you are a genius. Rationally, at the start-ups in business, the money almost comes from the internal sources - founder, family, friends and foolhardy investors, and then these small companies may research external funding support. This phenomenon also is no exception in the software industry. According to Farid et al. (2010) investigate 42 software firms in UK, personal saving, mortgage and loans is the mainresource when they established new companies.At the early stages ofdevelopment finance is accepted as one of the most influentialfactorfo