CALL FOR PAPERS Special Issue of Small Business Economics: An Entrepreneurship Journal New trends in entrepreneurial finance

Young innovative firms play a key role in modern knowledge-based economies because they are an important source of new jobs, radical innovations, and productivity growth, as well as a disciplining device for the behavior of established firms. Unfortunately, these firms often suffer from financing constraints, which limit their growth and threaten their survival. As a consequence, a wide literature has addressed the theme of financial constraints for young innovative firms. Lack of internal cash flows and collateral, as well as asymmetric information and agency problems are the main reasons for the difficulties in raising external funding (Carpenter and Petersen, 2002). Venture capital (VC) and business angel (BA) financing has traditionally been advocated as a source of financing for young innovative firms that find it difficult to access capital markets. VC and BA financing represents more than a financial source for these firms because it provides them with many value added services, such as monitoring, advice and reputation (Alexy et al., 2012; Engel and Stiebale, 2014; Hsu, 2004). Prior research has examined the impact of VC financing on firm’s growth, confirming a positive effect on employment, sales, innovation, and productivity (Achleitner, in press; Bertoni et al., 2013; Croce et al., 2012; Kortum and Lerner, 2000). However, the private VC and BA market is not able to entirely solve the equity gap that youn