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Public Glossary

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Businessman: A person who has a business.

Entrepreneurs: A creator who initiates and motivates the process of change, Discovers and exploits opportunities.

Entrepreneurship: Activity that involves the discovery, evaluation, and exploitation of opportunities, to introduce new goods and services, ways of organising, markets, processes and raw materials through organising efforts that previously had not existed (Venkataraman, 1997; Shane & Venkataraman, 2000). Other definitions subscribe to the notion of innovation as a key attribute of entrepreneurship. From the perspective of Kirzner (1997), the entrepreneur is an individual who is alert to opportunities for trade. The entrepreneur is capable of identifying suppliers and customers and acting as an intermediary where profit arises out of the intermediary function (Deakins & Freel, 2006). By contrast, the Schumpeter (1934) perspective involves innovations that result in new combinations that spur creative destruction where the newly created goods, services or firms can hurt existing goods, services or firms (Shane, 2003). Zimmerer and Scarborough (2005) hold that entrepreneurs are new business or combinations that arise in the face of risk and uncertainty for the purpose of achieving profit and growth. The factors that distinguish entrepreneurs most strongly are innovation, opportunity recognition, process, and growth in a business and employment of strategic management practices in the business (Carland, Boulton & Carland, 1984; Watson, 2001). ‘Innovation involves finding new and better ways of doing things that are commercialised whilst scientific invention entails the creation of a new product or concept almost for its own sake or to serve a purpose other than commerce’ (Rwigema & Venter, 2005:113). Inventors may be motivated by the challenges of solving a problem rather than commercialising their invention. These individuals hold allegiance to idea generation rather than operationalisation and commercialisation. They are concerned with ephemeral satisfaction rather than longterm optimal business commitment and the finance and investment behaviour this implies. constrained and/or restricted from seeking financing elsewhere). Their practices reveal the use of capital rationing through staged financing (venture capital firm–equity capital) and credit limits (banks – debt capital) as a means of controlling the investee’s ability to continue and grow their business. Although banks’ monitoring and control rights are less intensive, they monitor for covenant violations, deteriorating performance, or worsening collateral quality that might jeopardise their loan (Winton & Yerramilli, 2008). Landier (2003) notes that entrepreneurs choose safe projects backed by bank debt and low monitoring if the stigma associated with failure is high, and risky projects backed by venture capital finance and high levels of monitoring if the stigma associated with failure is low. For Ueda (2004), the choice between bank and venture capital financing depends on the relative importance of more accurate screening and the level of intellectual property rights protection. Venture capital firms present a distinct form of financial intermediation primarily through the governance and valueadded that the investor provides to the investee (Rwigema & Venter, 2004)

Founder: A person who found or initiates a product, organization or movement.