Independence of the SME : What tools and strategies can entrepreneurs use to keep developing their company while maintaining their independence?

Details

Supervisors

Desclée De Maredsous, Xavier

Faculty

Louvain School of Management

Degree label

Master [120] en ingénieur de gestion

Abstract

This thesis analyses the main financial tools available for start-ups and SMEs to boost their development. Internal finance, debt and convertible debt and various forms of equity financing are reviewed based on their capacity to boost growth as well as the level of financial and decisional independence maintained. Qualitative data from interviews with 8 entrepreneurs and 4 managers of financial services, coupled with quantitative data gathered on companies which have used crowdfunding or business angel financing provide the following results: - The will for independence should not be absolute. First, maintaining effective control should rank above maintaining a majority stake. Second, barriers to unfriendly offers should only be set to ensure an intelligent discussion on the loss of independence. - Some useful tools should be more developed in Belgium. These include public equity, which is still difficult to access for entrepreneurs, and convertible debts, which should replace early-stage equity finance - Crowdfunding is still at an early stage of development and is mostly useful for its marketing benefits rather than pure equity or debt funding. - Regional funds are very present in Wallonia and give interesting terms.