Chapter | Socio-Economics: Toward a New Synthesis | 1991

A New Entrepreneurial Paradigm

by H. H. Stevenson and J. C. Jarillo-Mossi

Format: Print

Citation:

Stevenson, H. H., and J. C. Jarillo-Mossi. "A New Entrepreneurial Paradigm." In Socio-Economics: Toward a New Synthesis, edited by P. R. Lawrence, and A. Etzione. Armonk, NY: M.E. Sharpe, 1991.

The funded search model is one alternative for individuals who, at some point in their career, want to run their own companies. This note looks at the funded search, as a means to entrepreneurship through acquision and describes the path to buy and run a business using debt and equity as a means of financing the purchase. While applicable to an early career choice, many of the process steps are applicable to unfunded searches at later stages of a career.

After 3 years of losses and under legal threats from their landlord, a husband and wife team are faced with shutting the company down, buying time with the landlord or turning to their parents for additional funds. Despite opening a new location and seeing that sales were up from last year, their financial statements were still reporting losses forcing them to consider what steps to take to turn children's retail clothing business around.

About to break bank covenants, Peter Jepsen has to deal with a contentious prior owner, improve profitability and staff appropriately all while maintaining credibility with his investors, in the furniture hardware company he has owned for less than a year.

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