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Why Do Technology Start-Ups Face a Much Higher Cost of Capital

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Essay

Why do technology start-ups face a much higher cost of capital than larger competitors? Discuss the sources from which new technology start-ups can obtain external financing.


Definitions:

Performance Measures

Quantitative or qualitative metrics used to evaluate the efficiency and effectiveness of an individual, group, or organization's operations against defined objectives.

Agreed Upon

A decision or plan that has been accepted and consented to by all parties involved.

Gain-sharing

A performance-based compensation strategy where employees receive bonuses based on the improvement of company metrics.

Productivity Increases

The improvement in the efficiency of production processes, leading to more output from the same amount of inputs.

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