Entrepreneurial finance reconsidered: a systematic review and future research agenda

The domain of entrepreneurial finance has experienced a paradigmatic shift over the past two decades. Traditional financing trajectories, from personal savings and informal sources (commonly termed “friends, family and fools”) to business angels, venture capital (VC) and ultimately public equity markets, have been fundamentally disrupted. Contemporary entrepreneurial ecosystems are now characterized by the coexistence of traditional intermediaries alongside alternative funding models, including crowdfunding platforms, peer-to-peer lending systems, initial coin offerings (ICOs) and specialized private debt instruments (Bellavitis, Filatotchev, Kamuriwo, & Vanacker, 2017; Block, Colombo, Cumming, & Vismara, 2018; Cumming, Deloof, Manigart, & Wright, 2019).

These developments are not merely additive. They represent a structural reconfiguration of capital markets, reshaping both access to finance and the dynamics of investor–entrepreneur interaction. Digital platforms have reduced transaction costs and lowered entry barriers, enabling entrepreneurs to circumvent traditional financial gatekeepers and directly engage with dispersed investor communities (Mollick, 2014). Concurrently, institutional investors have increasingly diversified into alternative asset classes such as VC and private equity, motivated by the pursuit of superior risk-adjusted returns and portfolio diversification benefits (Braun, Jenkinson, & Stoff, 2017; Achleitner & Figge, 2014).

Despite these advancements, the increasing complexity of the entrepreneurial finance landscape raises several critical questions. For example, how do entrepreneurs strategically navigate this expanded and fragmented funding environment? What criteria do investors apply in evaluating ventures under conditions of heightened uncertainty and information asymmetry? Moreover, how do technological innovations mediate and potentially transform the relationships between entrepreneurs and capital providers? These questions motivate the systematic review that follows, but this paper will demonstrate that they remain largely unanswered in the existing literature. The field has produced sophisticated accounts of investor behavior while leaving entrepreneur experience as a black box.

Despite the growing sophistication of academic inquiry in entrepreneurial finance, a persistent gap exists between scholarly research and entrepreneurial practice. Academic researchers often remain detached from the lived realities of entrepreneurs, resulting in a limited understanding of the practical challenges faced during the financing process. In contrast, practitioner-oriented outlets such as Entrepreneur, Inc. and Forbes frequently capture nuanced, experience-based insights that are largely absent from top-tier academic publications.

This divergence reflects a broader epistemological tension: while academic research prioritizes theoretical rigor and methodological precision, it often does so at the expense of contextual richness and phenomenological authenticity. This review explicitly acknowledges this limitation. Rather than claiming direct access to entrepreneurial experiences, it critically examines how academic scholarship has constructed and represented the entrepreneurial finance landscape. In doing so, it not only synthesizes what is known but also illuminates what remains systematically overlooked – most notably, the perspectives, decision-making processes and experiential realities of entrepreneurs themselves.

This paper defines “entrepreneurial voice” as the direct, first-person perspectives, experiential knowledge, decision-making processes and lived realities of entrepreneurs as they navigate financing decisions. This concept encompasses not merely entrepreneurs' stated preferences in survey responses but also their narratives, sense-making processes, strategic reasoning and emotional experiences throughout the financing journey. The “entrepreneurial voice gap” refers to the structural absence of these direct perspectives in academic research, where entrepreneurs appear primarily as objects of analysis (e.g. data points in registries) rather than as knowledgeable agents whose experiences constitute valid evidence.

Before proceeding, the scope and ambition of the current review are clarified to avoid overclaiming. What this review does: (1) provides a methodologically transparent synthesis of high-quality academic research published in A/A* journals between 2012 and 2024; (2) critically examines theoretical fragmentation, methodological orthodoxy and the structural absence of entrepreneurial voice; (3) diagnoses the entrepreneurial voice gap as a structural problem in knowledge production, not merely a research gap; (4) offers an integrated, multilevel framework with testable propositions for future research; (5) presents a prioritized research agenda distinguishing diagnostic, urgent and high-risk questions.

What this review does NOT do: (1) does not claim to capture entrepreneurs’ lived experiences directly (this paper reviews academic representations only); (2) does not include practitioner outlets (e.g. Forbes, Entrepreneur, startup blogs) or non-English publications; (3) does not resolve the entrepreneurial voice gap – we diagnose, not remediate; (4) does not claim universal generalizability given geographic concentration (73.6% North America/Europe).

This delimitation is intentional and reflexive. The exclusion of practitioner knowledge is a limitation, acknowledged throughout. However, systematic reviews of academic literature serve a distinct purpose of identifying how scholarly inquiry has constructed entrepreneurial finance as an object of knowledge.

Against this backdrop, the review is guided by five research questions.

The manuscript is aligned with these five questions. Section 2 addresses RQ2 through a critical interrogation of theoretical foundations. Section 3 documents the methodological approach (RQ4). Section 4 presents findings organized across four thematic domains that collectively address RQ1, RQ2, RQ3 and RQ4. Section 5 synthesizes findings to identify gaps (RQ5) and presents an integrated framework. Section 6 advances a future research agenda that directly responds to RQ5.

To position this review's contribution transparently, Table 1 compares it with prior influential reviews.

What is new here: (1) systematic critique of entrepreneurial voice absence as a structural problem in knowledge production, not merely a research gap, with formal definition and explicit scope; (2) testable propositions derived directly from thematic synthesis patterns, with explicit tracing of the conceptual leap from findings to propositions; (3) prioritized agenda distinguishing diagnostic, urgent and high-risk questions with explicit methodological recommendations and connections to synthesis patterns; (4) methodological reflexivity including positionality statement and explicit acknowledgment of non-pre-registration; (5) post-COVID evidence synthesis (2019–2024) with implications for financing resilience.

The remainder of this paper is organized as follows. Section 2 critically interrogates the theoretical foundations of entrepreneurial finance research, examining the continued relevance and limitations of agency theory, signaling theory and the resource-based view, while identifying latent complementarities and proposing interaction effects that move beyond simple temporal sequencing. Section 3 presents the systematic review methodology in detail, including the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA)–guided search strategy, inclusion and exclusion criteria, MMAT quality assessment protocol, inter-rater reliability procedures and thematic synthesis approach, along with a positionality statement and acknowledgment of the absence of pre-registration as a limitation. Section 4 reports the empirical findings organized across four thematic domains: alternative funding sources, risk–return dynamics, technological transformations and methodological trajectories. Section 5 integrates these findings into a multilevel, process-oriented conceptual framework that spans macrolevel institutional conditions, mesolevel intermediary structures and microlevel entrepreneurial processes, and advances five testable propositions. Section 6 presents a prioritized future research agenda, distinguishing between diagnostic, urgent and high-risk questions. Section 7 acknowledges the limitations of this review. Section 8 concludes by summarizing the key findings and reiterating the central critical insight regarding the entrepreneurial voice gap.

Entrepreneurial finance research is theoretically pluralistic yet heavily anchored in three dominant paradigms. This section critically interrogates each, identifying its limits and latent complementarities. This analysis directly addresses RQ2 by examining how risk, return and information asymmetries are conceptualized through these theoretical lenses.

Agency theory (Jensen & Meckling, 1976) has been foundational in explaining contractual design, monitoring mechanisms and incentive alignment under information asymmetry. Studies on VC contracting (Ewens, Gorbenko, & Korteweg, 2022), staged financing (Yung, 2019) and investor monitoring (Bonini, Capizzi, & Zocchi, 2019) consistently validate core agency predictions.

However, three limitations are persistently overlooked. First, the behavioral assumption of opportunism is increasingly misaligned with empirical realities, where entrepreneurial motivation is often intrinsically driven. Second, the framework disproportionately focuses on value appropriation rather than value creation. Third, it inadequately captures the relational and trust-based governance mechanisms that characterize many early-stage investment relationships.

Implications: Agency theory remains indispensable for understanding contractual structures but insufficient for capturing socio-relational dynamics.

Signaling theory (Spence, 1973) addresses how entrepreneurs communicate unobservable quality to potential investors. Signals such as prior funding, founder experience and third-party endorsements mitigate information asymmetry. Empirical evidence underscores its relevance across contexts (Capizzi, Croce, & Tenca, 2022; Cumming, Meoli, & Vismara, 2021; Chan & Parhankangas, 2017).

However, the literature typically assumes homogeneous signal interpretation. Research increasingly challenges this: signal effectiveness varies across investor types, institutional environments and cultural contexts (Guenther, Johan, & Schweizer, 2018). Moreover, signal proliferation in digital environments may dilute informational value.

Implications: Future research requires a receiver-centric signaling framework in which signals are socially constructed through interpretation.

The resource-based view (Barney, 1991) shifts focus from information problems to value creation, conceptualizing investors as providers of heterogeneous resources beyond capital. Studies demonstrate that angel-backed firms outperform due to value-added services (Bonini et al., 2019) and VC facilitates digital growth through both financial and nonfinancial contributions (Cavallo, Ghezzi, Dell'Era, & Pellizzoni, 2019). However, it has two key limitations: First, RBV is inherently retrospective – identifying valuable resources ex post rather than predicting them ex ante. Second, it remains largely silent on resource acquisition processes under uncertainty. Thus, the RBV must be extended to incorporate resource orchestration and network embeddedness (Hong, 2020; Fiet, 2022).

Prior attempts at theoretical integration have largely defaulted to temporal sequencing: signaling preinvestment, agency during and RBV postinvestment. This is not integration; it is chronological labeling. True integration requires specifying interaction effects. Hence, three testable propositions are proposed in Table 2. These propositions are revisited in the conceptual framework (Section 5.2), in which the paper demonstrates how they derive from the thematic synthesis.

These propositions are revisited in the conceptual framework (Section 5.2).

This study adopts a systematic literature review (SLR) methodology, informed by Tranfield, Denyer, and Smart (2003) and aligned with PRISMA 2020; Page et al. (2021). The choice reflects an explicit commitment to transparency, replicability and cumulative knowledge building.

Positionality statement: The authors are scholars trained in finance and management at institutions in India and Nepal. Our shared disciplinary background may predispose us toward certain theoretical and methodological preferences. This was mitigated through independent screening, inter-rater reliability checks and explicit acknowledgment of interpretive bias.

Protocol preregistration: The review protocol was not preregistered. This is a limitation, acknowledged here. However, the paper provides complete search strings and quality assessments to enable replication.

Searches were conducted across six databases: Web of Science Core Collection, Scopus, Sage Journals, ProQuest (ABI/INFORM), EBSCOhost (Business Source Complete) and Wiley Online Library. Complete search strings are provided in Appendix A.

Core terms: (“entrepreneur finance” OR “entrepreneur financing” OR “entrepreneur funding”)

Mechanism terms: (“venture capital” OR “angel investor” OR “crowdfunding” OR “peer-to-peer lending” OR “private equity” OR “debt financing” OR “bootstrapping”)

Temporal boundary: January 2012 to March 2024, capturing the rise of digital platforms, alternative financing models and COVID-19.

Expanded search terms: The paper supplements the search with additional terms including “start-up financing,” “early-stage financing,” “entrepreneurial ecosystem,” “financial technology,” “fintech,” “alternative finance,” “equity crowdfunding,” “reward-based crowdfunding,” “initial coin offering,” “ICO,” “security token offering,” “STO” and “venture debt.” This expanded search was applied to all six databases, ensuring a broader and more representative coverage.

Inclusion criteria were s\as follows: (1) peer-reviewed journal articles; (2) English language; (3) A or A* classification in the Australian Business Deans Council (ABDC, 2022) (with limited exceptions for highly cited B-journal articles); (4) direct relevance to entrepreneurial finance; (5) empirical or theoretical contribution.

Exclusion criteria were as follows: (1) books, conference proceedings non-peer-reviewed outlets; (2) corporate finance without entrepreneurial context; (3) purely methodological without substantive application; and (4) duplicates.

Justification for journal quality focus: Restricting to A/A* journals that prioritize methodological rigor and theoretical contribution. However, this introduces selection bias, excluding innovative or contextually rich insights from lower-ranked or practitioner-oriented outlets. This limitation is explicitly acknowledged.

Figure 1 shows a PRISMA flow diagram for the screening and selection process of studies. This process follows a multistage protocol. Initial search obtained 4,832 records from databases +24 from citation tracking, which led to a total of 4,856 records. After duplicate removal, there were 3,147 unique records (EndNote X9 + manual verification). Title and abstract screening was conducted independently by authors against the inclusion criteria. Inter-rater reliability Cohen's κ was 0.84 (substantial agreement). Discrepancies were resolved through iterative discussion. Full-text review was done for 184 articles assessed for eligibility. Quality assessment was performed using MMAT v2018 (Hong et al., 2018), threshold ≥80% (see Section 3.6 and Appendix B). The final sample was 53 articles.

Justification for sample size: While 53 articles may appear limited compared with the initial 4,856 records, this reflects the rigorous application of quality criteria and scope definition. The sample size is consistent with comparable systematic reviews in finance and management that apply stringent inclusion criteria (e.g. A/A* journals only, ≥80% MMAT threshold). The synthesis is not intended to be exhaustive of all entrepreneurial finance scholarship but rather to provide a high-quality, theoretically grounded analysis of the most methodologically rigorous contributions. The findings are therefore representative of the field's highest-quality research, not of all research.

A structured protocol was developed and pilot-tested, extracting bibliographic metadata, theoretical framework(s), research design and methodology, data sources, analytical techniques, key findings, stated limitations, and future research directions. Extraction was conducted independently by the authors with agreement >95%. Synthesis followed a three-stage thematic analysis approach (Thomas & Harden, 2008), supported by NVivo 12: (1) open coding – line-by-line coding of extracted findings; (2) descriptive theme development – grouping codes into higher-order categories; (3) analytical theme generation – interpreting descriptive themes in relation to research questions and theoretical frameworks.

The MMAT (Hong et al., 2018) was selected for its flexibility across qualitative, quantitative and mixed-methods research. Threshold for inclusion was ≥80% “Yes” responses on applicable criteria. Table 3 summarizes the results of the quality assessment.

Inter-rater reliability by study type was as follows: qualitative (κ = 0.82); quantitative (κ = 0.79); mixed methods (κ = 0.74).

Despite its rigor, the methodology has limitations: (1) publication bias – focus on high-ranking journals privileges statistically significant findings; (2) geographic concentration – North America and Europe dominate (73.6%); (3) language bias – English-language publications only; (4) practitioner exclusion – no analysis of practitioner outlets; (5) no preregistration – protocol was not preregistered.

This section presents the empirical findings organized across four thematic domains that collectively address RQ1 (alternative funding sources), RQ2 (risk–return dynamics and theoretical frameworks), RQ3 (technological transformations) and RQ4 (methodological trajectories).

Table 4 summarizes the characteristics (publication year, journal quality, methodology, primary focus and geographical context) of the 53 included studies. The complete list of the 53 included studies is provided in Appendix C.

The over-representation of North America and Europe (73.6%) and reliance on secondary datasets (69.8%) systematically shape the phenomena rendered visible. The literature provides a partial representation of entrepreneurial finance.

This section moves beyond the mere description of individual studies to provide a critical thematic synthesis of the literature on alternative funding sources. Rather than cataloguing what each study has found, the key patterns, tensions and unresolved debates are distilled across the five funding mechanisms examined in the literature.

The thematic analysis reveals three overarching patterns across funding sources. First, the performance effects of any given funding mechanism are not uniform but contingent on venture characteristics, investor expertise and institutional environments. Second, the mechanisms through which funding influences outcomes – whether through capital provision, certification, resource supplementation or governance – vary systematically across funding types. Third, the boundaries between funding sources are increasingly blurred, with co-investment, syndication and sequential financing creating hybrid governance arrangements that existing theories struggle to explain.

The VC literature reveals a central tension: while VC is consistently associated with positive performance outcomes, the mechanisms and conditions underlying this relationship remain contested. Evidence supports VC's performance-enhancing role, particularly in emerging markets (Gu & Qian, 2019). However, this relationship is conditional on measurement choices – Braun et al. (2017) demonstrate that persistence estimates are highly sensitive to performance metrics, with PME outperforming IRR and MOIC. Buchner, Mohamed, and Schwienbacher (2017) reconceptualize diversification as a compensatory mechanism for capability deficits rather than a pure risk-management tool.

Critically, the governance dimension of VC reveals systematic asymmetries. Ewens et al. (2022) show that VC contracts systematically favor investors beyond total venture value maximization, problematizing efficiency assumptions and highlighting bargaining power asymmetries. This finding challenges the prevailing narrative of VC as a purely value-enhancing governance mechanism and points toward a more nuanced understanding of VC as a site of power negotiation between entrepreneurs and investors (Chemmanur, Hull, & Krishnan, 2016; Chircop, Johan, & Tarsalewska, 2020).

The angel investing literature consistently demonstrates positive performance effects, but the causal mechanism is more complex than capital provision alone. Bonini et al. (2019) provide robust evidence that angel-backed firms outperform across growth, profitability and survival metrics, with the mechanism being complementary resources – strategic guidance, networks and monitoring – rather than capital provision alone (Bonini, Capizzi, Valletta, & Zocchi, 2018; Croce, Guerini, & Ughetto, 2018; Cardon, Mitteness, & Sudek, 2017).

A key insight from the thematic synthesis is the certification function of angel investment. Capizzi et al. (2022) demonstrated that angel investment serves as a certification mechanism for subsequent VC financing, with signaling strength varying with angel sophistication. This suggests that angel investment operates not merely as a funding source but as a quality signal that unlocks future financing. Cross-country evidence reveals that angel activity is more pronounced in environments with weaker legal systems and underdeveloped VC markets (Cumming & Zhang, 2019), suggesting that angels play a compensatory role in less developed institutional contexts.

The crowdfunding literature presents a more complex and ambivalent picture than either VC or angel investing. Chan and Parhankangas (2017) identify a U-shaped relationship between innovativeness and funding success, challenging universalist claims about innovation signaling. This suggests that the relationship between venture characteristics and funding outcomes is nonlinear and context-dependent – a pattern that quantitative studies treating these relationships as linear would miss.

Parhankangas and Renko (2017) show that linguistic style significantly influences funding outcomes for social ventures but not for commercial ventures, which highlights the role of rhetorical signaling in crowdfunding contexts. Cumming et al. (2021) found that experience, social capital and endorsements enhance crowdfunding success, though entrepreneurs using crowdfunding are systematically younger and less experienced – suggesting democratization tempered by quality signaling concerns. Guenther et al. (2018) demonstrated that geographic proximity continues to influence investment decisions despite digital mediation, challenging the notion that digital platforms eliminate spatial frictions (Hornuf & Schwienbacher, 2017; Wang, Mahmood, Sismeiro, & Vulkan, 2019; Zhang & Liu, 2012). The crowdfunding literature thus reveals a fundamental tension between democratization and quality signaling, with digital platforms expanding access while simultaneously introducing new forms of information asymmetry.

The debt financing literature reveals that financing choices evolve with firm maturity (Cole & Sokolyk, 2018), suggesting a lifecycle perspective on entrepreneurial finance. P2P lending emerges as complementary rather than substitutive to traditional bank lending: Coakley and Huang (2023) find platforms primarily serving creditworthy SMEs with moderate needs, occupying a niche between bank lending and equity financing. Dudley (2021) demonstrates that social capital facilitates access to external debt, reinforcing the embeddedness of financial markets in social structures – a theme that resonates with the institutional contingency arguments developed in Section 5 (Deloof & Vanacker, 2018).

Private equity literature, though limited in the entrepreneurial finance context, reveals important governance externalities. Goktan and Muslu (2018) show that firms backed by publicly listed private equity entities exhibit higher reporting quality due to external scrutiny, suggesting that private equity involvement generates governance spillovers beyond the immediate investee firm (Achleitner & Figge, 2014).

Across all five funding mechanisms, the thematic synthesis reveals a consistent pattern: funding source effects are conditional on context, mechanism and institutional environment. This finding undermines any simple “which funding source is best” narrative and points toward the multilevel, process-oriented framework developed in Section 5.

Staged financing proves effective only under conditions of investor competence (Yung, 2019). Syndication patterns correlate with investor personality traits (Block, Fisch, Obschonka, & Sandner, 2019), while contractual arrangements disproportionately shift risk onto entrepreneurs (Ewens et al., 2022). Performance metric choice significantly influences conclusions: IRR and MOIC can mislead; PME offers more reliable benchmarking (Braun et al., 2017; Hirsch & Walz, 2019).

COVID-19 as a stress test: Brown and Rocha (2020) document a dramatic contraction in equity financing, exceeding the global financial crisis and disproportionately affecting early-stage ventures (Mason & Botelho, 2021).

Digital platforms have expanded access but not eliminated fundamental frictions. Guenther et al. (2018) showed that geographic proximity continues to influence decisions. Research on AI remains nascent, with studies highlighting both algorithmic screening promise and concerns regarding opacity and bias (Cavallo et al., 2019). Blockchain-based mechanisms (ICOs) represent a theoretically distinct category (Block et al., 2021), but empirical research remains limited.

Table 5 presents the methodological approaches used by the 53 included studies.

Quantitative dominance: 79.2% of studies use quantitative methods. Panel data designs are increasingly popular. Advanced techniques include GMM, conjoint experiments, propensity score matching, instrumental variables and two-step Tobit.

Qualitative gap: Only 11.3% use qualitative approaches. This represents a significant gap in understanding entrepreneur–investor interactions and decision-making processes.

Endogeneity: 85.7% of quantitative studies address endogeneity, but adequacy is uneven. Some instruments are of questionable validity.

The structural absence of entrepreneurial voice: Only three studies in the sample included extensive entrepreneur interviews. No studies analyze practitioner publications, entrepreneur blogs, or startup diaries.

The thematic synthesis of 53 studies yields four core patterns that collectively characterize the state of entrepreneurial finance research and its limitations. These patterns are not merely descriptive summaries but represent analytically derived insights that inform the conceptual framework developed in Section 5.

• Pattern 1: Funding source effects are context-dependent and nonuniform. The performance implications of VC, angel and crowdfunding financing vary systematically with venture characteristics (e.g. innovativeness, maturity, sector), investor expertise (e.g. experience, network, sophistication) and institutional environments (e.g. legal systems, capital market development). This context dependence undermines any simple “which funding source is best” narrative and points toward a more nuanced understanding of financing fit. The literature has largely failed to develop contingent theories that specify when and why particular funding sources are more or less effective.

• Pattern 2: Crowdfunding challenges conventional signaling logic. Crowdfunding success depends on nuanced, often nonlinear factors – innovation type, linguistic style and geographic distance – that interact with venture type and platform characteristics. The democratizing potential of crowdfunding is tempered by persistent concerns about quality signaling and the risk of signal dilution. The literature has yet to develop a comprehensive theory of signaling in digital platforms that accounts for the multiplicity of signals, heterogeneous receivers and platform-mediated interpretation.

• Pattern 3: Technological transformation is real but incomplete. Digital platforms have expanded access and reduced frictions, but fundamental information asymmetries and geographic biases persist. AI and blockchain technologies remain under-researched despite their potential to fundamentally reshape financing relationships. The literature's treatment of technology remains largely descriptive rather than theorized, with insufficient attention to how platform design, algorithmic governance and data-driven decision-making transform the financing process.

• Pattern 4: Methodological rigor has increased asymmetrically. While quantitative methods have grown more sophisticated in addressing endogeneity, qualitative approaches and entrepreneur-centered data remain marginalized. This asymmetry has produced literature that knows increasingly more about investor behavior but increasingly less about entrepreneurial experience. The near-total absence of entrepreneurial voice represents not merely a data gap but an epistemological deficit that limits the field's capacity to theorize entrepreneurial finance as a lived, relational and context-dependent phenomenon.

These four patterns collectively point toward the integrated conceptual framework presented in Section 5, which explicitly theorizes the interactions among financing mechanisms, institutional context and entrepreneurial agency that the literature has treated in isolation.

This section synthesizes findings to identify critical gaps in the literature (RQ5) and presents an integrated framework with testable propositions for future research. The most critical limitation identified is not methodological but epistemological: entrepreneurs themselves are almost absent from the literature that claims to study their financing behavior. Of 53 studies, only 3 include extensive entrepreneur interviews; none analyze practitioner publications (e.g. Forbes, Entrepreneur, startup blogs), and none use diary methods or longitudinal qualitative tracking.

To be precise, the entrepreneurial voice is not completely absent – 11.3% of studies use qualitative methods, and three studies do include entrepreneur interviews. However, these represent a small minority of the literature. The issue is not total absence but structural marginalization: the field overwhelmingly privileges quantitative, investor-centric approaches that treat entrepreneurs as data points rather than knowledgeable agents. The entrepreneurial voice gap is therefore a gap of predominance and priority, not absolute presence.

This is not merely a gap but a structural problem in how knowledge is produced. Academic research answers questions academics find interesting, not necessarily questions entrepreneurs find pressing. As a result, the field has developed sophisticated theories of investor behavior while leaving entrepreneur experience as a black box. The present paper diagnoses this problem and outlines its direct implications for the future research agenda, which is presented in Section 6. It does not, however, claim to solve the problem. Remediation requires future research designs centered on entrepreneurial agency.

Crucially, the paper distinguishes between two meanings of “absence”: (1) absence in academic literature, which the methodology directly documents (only 5.7% of studies include entrepreneur interviews), and (2) absence in the world, which the paper cannot directly assess. The entrepreneurial voice gap is first and foremost a gap in academic knowledge production, a systematic omission of a legitimate source of evidence. Whether entrepreneurs' voices are equally absent from practitioner outlets or public discourse is a separate question that this review does not address. The paper therefore frames the findings as diagnosing a gap in scholarly representation, not a universal silence.

The few studies that do incorporate entrepreneur interviews offer valuable insights that the broader literature largely misses. Bonnet and Wirtz (2012) investigated relational dynamics in business angel-VC co-investment scenarios, finding that the cognitive approach to entrepreneurial finance, emphasizing trust, shared understanding and relational governance, better explains investor–entrepreneur interactions than agency theory alone. Their prospective case study demonstrates that entrepreneurs and investors co-construct financing relationships through mutual sense-making rather than purely contractual alignment, a dynamic largely invisible in secondary database studies.

Similarly, Abdelfattah and Abdullatif (2025), drawing on 24 semi-structured interviews with Jordanian entrepreneurs, documented a stark contrast in financing preferences: users of technological methods valued ease and speed of access, while users of traditional financing prioritized investor mentoring, networks and clearly defined goals. Yet both groups expressed frustration with regulatory constraints, revealing a shared experience of institutional friction that transcends the choice of funding channel.

Mason, Botelho, and Zygmunt (2017) analyzed data from 30 face-to-face interviews and 238 survey responses from UK business angels, finding that the primary reason for rejecting investment opportunities relates to concerns about the entrepreneur or management team – a finding that underscores the centrality of personal factors in investor decision-making (Botelho, Harrison, & Mason, 2021; Botelho & Mason, 2024; Harrison & Mason, 2019; Mason, Botelho, & Harrison, 2019).

More recently, Sturm, Bican, Riar, Guderian, and Welz (2025) used 16 semi-structured interviews with entrepreneurs to examine investor selection criteria, identifying valuations, networks, expertise, reputation, empathy, trust and personal fit as pivotal. Crucially, they discovered that entrepreneurs accept lower valuations when compensated with value-added services and that negotiations break down primarily due to unfair valuations, inadequate investor expertise and overly rigorous control measures.

Collectively, these entrepreneur-centered studies reveal financing decisions as socially embedded, relationally constituted and shaped by trust, perception and strategic calculation – dimensions that quantitative, investor-centric approaches flatten or ignore. Entrepreneurs are not passive subjects responding to market signals but active agents whose perspectives, strategies and concerns fundamentally shape financing outcomes. The marginalization of their voices thus represents not merely a data gap but an epistemological deficit that limits the field's capacity to theorize entrepreneurial finance as a lived, relational and context-dependent phenomenon.

Building on this synthesis, a multilevel process model of entrepreneurial finance is presented in Figure 2. Figure 2 shows a process-oriented framework with five testable propositions, denoted as P1, P2, P3, P4 and P5. Furthermore, Table 6 presents the content and empirical approach for these five testable propositions, which operationalize this framework.

The conceptual leap from findings to propositions proceeds as follows: The thematic analysis revealed four recurring patterns: (1) theoretical fragmentation with isolated application of agency, signaling and RBV; (2) context-dependent funding effects suggesting institutional contingency; (3) path-dependent financing sequences in entrepreneurial narratives; and (4) platform-mediated signal dynamics in digital environments. These patterns map directly onto the five propositions. P1–P3 emerge from the observed need for theoretical integration (pattern 1) and institutional contingency (pattern 2). P4 emerges from the narrative evidence of financing path dependence (pattern 3). P5 emerges from the digital platform dynamics documented across crowdfunding studies (pattern 4). Thus, the framework is not imposed but derived from the synthesis itself.

The framework also acknowledges the role of exogenous shocks, such as COVID-19, as macrolevel contingencies that can accelerate or disrupt financing sequences. Brown and Rocha (2020) demonstrated that the pandemic dramatically contracted equity financing, disproportionately affecting early-stage ventures. Such shocks interact with the multilevel process model by compressing time horizons, altering signal validity and reshaping institutional conditions. Future research should theorize how exogenous disruptions moderate the signaling→agency→RBV sequencing and test whether path dependence becomes stronger or weaker under crisis conditions.

Reframing agency theory: Evidence suggests that entrepreneur–investor relationships frequently exhibit hybrid governance structures. Future theorization should reconceptualize agency relationships as conditional governance arrangements, integrating relational governance perspectives (Poppo & Zenger, 2002; Fiet, 2022).

Reconceptualizing signaling: A receiver-centric signaling framework is needed, aligning with recent extensions emphasizing rhetorical and contextual signals (Steigenberger & Wilhelm, 2018; Cumming & Groh, 2018; Cumming, Johan, & Zhang, 2018).

Extending RBV: Entrepreneurial finance is less about static resource endowments and more about strategic access to resource networks. RBV must incorporate resource orchestration processes and network embeddedness (Hong, 2020).

Institutional contingency implications: The geographic concentration of the literature (73.6% North America/Europe) has profound theoretical implications. Agency and signaling dynamics are likely to differ systematically across institutional contexts. For example, Bruton, Ahlstrom and Puky (2009) demonstrated that while VC practices exhibit strong consistency across emerging economies due to common professional roots and traditions, institutional settings in distinct regions – Latin America and Asia – produce significant differences in industry practice. The paper elaborates on these differences as follows:

Asian Markets (China, India, Southeast Asia): In many Asian economies, formal contracting is less reliable and legal enforcement is weaker, leading to relational governance and trust-based mechanisms to substitute for contractual safeguards. For example, in China, the role of guanxi (social networks) in financing decisions has been extensively documented. Research by Johan and Wu (2014) found that only 7.8% of lenders in Yunnan province, China, viewed lender–borrower relationships as important in loan decisions, suggesting that even in guanxi-based societies, formal institutional mechanisms may be more influential than commonly assumed. Conversely, Li, Chen, Jia, Chen, and Herrera-Viedma (2024) revealed that the presence of guanxi between venture capitalists and entrepreneurs can facilitate collusive behavior, increasing entrepreneurial self-interest, venture capitalist returns and operational risk while infringing upon minority shareholder interests, a dark side of relational governance that agency theory, developed in Western contexts, fails to anticipate (Xiao & Anderson, 2022; Madill, Haines, & Riding, 2005; Lerner, Schoar, Sokolinski, & Wilson, 2018).

Government policy plays a more direct role in capital allocation through state-directed lending and policy banks, creating institutional logics that differ from Western market–based systems. The rapid adoption of digital finance platforms in India and China (e.g. Alipay, WeChat Pay, Paytm) creates alternative credit assessment mechanisms that may reduce traditional information asymmetries but introduce new algorithmic biases. Zhang (2015) demonstrated that entrepreneurs' business and political contacts increase their probability of using formal financial sources, while urban ties increase their probability of using informal sources, underscoring how social capital shapes financing channel selection in institutionally distinct environments (Cosh, Cumming, & Hughes, 2009).

Latin American Markets: In Latin American economies, high inflation, currency volatility and political instability create macrolevel uncertainty that fundamentally alters risk–return calculations. Underdeveloped capital markets and banking sectors mean that entrepreneurs often rely more heavily on informal financing sources and family networks. Development banks play a particularly significant role: according to Organisation for Economic Co-operation and Development (OECD)/Charities Aid Foundation (CAF) - Development Bank of Latin America and the Caribbean/European Union (EU) (2024), approximately 107 development finance institutions operate at the national level in Latin America and the Caribbean, with 34% having an institutional mandate focused on micro, small and medium enterprises (MSME) financing. Institutions such as Banco Nacional de Desenvolvimento Econômico e Social (BNDES) in Brazil and Corporación de Fomento de la Producción (CORFO) in Chile provide crucial countercyclical lending, address market failures, including information asymmetries and support projects aligned with national development strategies (Cipoletta Tomassian, & Abdo, 2022). The signaling value of foreign investment or international partnerships may be particularly strong given the perceived legitimacy of foreign capital, as reflected in the growth of VC investment in the region, which reached $4.5 billion across 751 transactions in 2024 (Latin American Venture Capital Association, 2025)

Agency problems may be exacerbated by weaker shareholder protection laws, leading to greater reliance on concentrated ownership and family control structures. The role of development banks and government-sponsored VC (e.g. BNDES in Brazil, CORFO in Chile) introduces state actors as significant players in entrepreneurial finance, creating hybrid governance arrangements that existing theories struggle to explain.

Implications for theory: These cross-institutional differences suggest that existing theories, developed largely in Western contexts, require systematic testing and adaptation. Future research must move beyond treating institutional context as a control variable and instead theorize how institutional logics fundamentally reshape the signaling→agency→RBV sequencing. This paper proposes that the institutional context acts as a meta-moderator affecting not only the strength but also the direction of theoretical relationships. As Bruton et al. (2009) concluded, understanding these institutional differences is essential for both empirical and theoretical advancement in entrepreneurial finance research, particularly in emerging economies that serve as “natural laboratories” for studying institutional change and its effects on entrepreneurial activity (Giraudo, Giudici, & Grilli, 2019; Wilson, Wright, & Kacer, 2018).

For entrepreneurs: Success depends not only on venture quality but also on strategic navigation of multilevel constraints. Funding source sequencing is crucial as early decisions shape future opportunities through signaling effects. Network positioning is as critical as venture characteristics (Drover, Wood, & Zacharakis, 2017).

For investors: Effectiveness depends not only on selection but also on postinvestment engagement. Network participation enhances investment quality. Behavioral factors influence decisions beyond purely economic logic (Mason et al., 2019; Fiet, 2022).

For policymakers: Entrepreneurial finance failures are systemic and interdependent. Policy must align incentives across funding sources, address cyclical vulnerabilities and regulate emerging technologies to mitigate bias and opacity (Giraudo et al., 2019; Cumming et al., 2018; Wilson et al., 2018; Hornuf & Schwienbacher, 2017).

Alternative financing mechanisms are frequently framed as democratizing, but evidence suggests a more complex reality. Persistent biases – geographic, social and algorithmic – continue to shape outcomes. Algorithmic decision-making introduces new forms of opacity and potential discrimination. The same mechanisms that expand access – lower transaction costs, reduced entry barriers and disintermediation – may also enable new forms of exclusion through algorithmic sorting, platform governance and data-driven risk assessment. This duality requires careful policy attention. These societal implications are not peripheral to entrepreneurial finance scholarship; they are central to understanding how financial innovation shapes economic opportunity and social mobility (Lerner et al., 2018; Harrison & Mason, 2019; Zhang & Liu, 2012).

Rather than an exhaustive list, the research questions by urgency and risk have been prioritized in Table 7.

Extending the agenda – Implications for the Chinese and Asian context: the research priorities outlined earlier have a particular resonance for scholars studying entrepreneurial finance in China and other Asian emerging economies. The institutional contingency question (Priority 4) is directly relevant to China's hybrid financial system, where state-directed lending, policy banks and private VC coexist (Xiao & Anderson, 2022). Similarly, the algorithmic bias question (Priority 2) is urgent in China given the widespread adoption of fintech credit-scoring platforms such as Ant Group's Sesame Credit. The sequencing question (Priority 6) could be fruitfully examined through the lens of China's evolving capital markets and the recent emergence of the STAR Market for innovative enterprises. We encourage scholars to conduct systematic replication studies in Asian contexts to test the generalizability of the theoretical framework proposed here (Cosh et al., 2009; Madill et al., 2005).

In Table 8, the methodological priorities have been presented based on current practice and the changes required, with the rationale.

The single most important direction for future research is methodologically rigorous, entrepreneur-centered qualitative inquiry. The recommended designs are given as follows.

1. Longitudinal diary studies tracking entrepreneurs through financing sequences, capturing real-time decision-making and emotional responses

2. Critical incident interviews focusing on specific financing decisions and exploring how entrepreneurs make sense of successes and failures

3. Comparative ethnography of entrepreneurs using different funding sources, revealing how funding choices shape entrepreneurial identity and practice

4. Analysis of practitioner publications (e.g. Forbes, Entrepreneur, startup blogs) as legitimate data sources, systematically capturing entrepreneur narratives

The explicit call for submission of qualitative and mixed-methods studies to journals, with review criteria adjusted to value contextual richness alongside statistical precision. This methodological pluralism is essential for developing theories that reflect entrepreneurs' lived realities rather than merely investors' perspectives.

This review study has a few limitations that constrain its claims. However, these limitations do not invalidate the review's conclusions but qualify their scope. The most significant limitation, the absence of entrepreneurial voice, is the study's central critical finding. However, the paper emphasizes that this diagnosis pertains specifically to academic literature not to the broader world of entrepreneurial practice. Whether practitioners have a voice in other forums is an important question that falls outside the scope of this paper. The review protocol was not preregistered, limiting reproducibility. The insights from practitioner outlets have been systematically excluded. Thus, a critique of the “entrepreneurial voice gap” is a diagnosis based only on academic representations.

Furthermore, high-ranking journals favor statistically significant, theory-confirming results. Null findings and exploratory studies are under-represented. Geographic and English-language publications from North America and Europe dominate (73.6%). Findings may not generalize to Asia, Africa, or Latin America. The subjectivity of the quality assessment, despite high inter-rater reliability, cannot be ignored as the MMAT scoring involves interpretive judgments. Because of the temporal boundary (2012–2024), earlier foundational work is excluded, though cited for context (Cosh et al., 2009; Madill et al., 2005; Zhang & Liu, 2012).

This systematic review synthesizes 53 high-quality studies on entrepreneurial finance published between 2012 and 2024. The funding landscape has diversified considerably, with crowdfunding platforms, P2P lenders and ICOs joining traditional sources. Foundational theories – agency, signaling and RBV – remain relevant but require extension to accommodate new phenomena and crucially, incorporate entrepreneurs' perspectives.

Research demonstrates that funding source effects depend on context and mechanism. Angel backing improves venture outcomes through active involvement, but the effects vary by angel experience and syndication (Bonini et al., 2018; Cardon et al., 2017; Croce et al., 2018). Crowdfunding success depends on nuanced factors including linguistic style, innovativeness type and geographic distance (Zhang & Liu, 2012; Hornuf & Schwienbacher, 2017).

Methodologically, the field has become more rigorous, with increased attention to endogeneity. However, the dominance of quantitative methods (79.2%) and the near-total absence of entrepreneurs' voices represent significant gaps. Only 11.3% of studies use qualitative approaches; none capture entrepreneurs lived experiences in depth (Harrison & Mason, 2019; Vaznyte & Andries, 2019; Drover et al., 2017).

The most important lesson from this review is also its most significant limitation: the absence of entrepreneurial voice. Academic research on entrepreneurial finance has largely proceeded without directly engaging the entrepreneurs whose experiences it purports to understand. Bridging this gap requires epistemological reflexivity, methodological pluralism and recognition of entrepreneurial experience as legitimate data (Botelho & Mason, 2024; Botelho et al., 2021; Xiao & Anderson, 2022; Wilson et al., 2018; Cumming et al., 2018).

The supplementary material for this article can be found online.