Final answer:
The ease of securing new-venture financing today varies due to multiple factors including market conditions, regulatory requirements, and company readiness. Private investors and venture capitalists play a key role in early-stage finance, especially where information asymmetry exists.
Step-by-step explanation:
To determine whether it is easier or more difficult to secure new-venture financing today, it's important to understand the landscape of early-stage corporate finance. Very small companies usually opt to raise money from private investors rather than through an Initial Public Offering (IPO), mainly because an IPO is complex, expensive, and requires a certain level of maturity and scale that these companies do not have. When small, young companies do opt for public markets, an IPO can be appealing as it potentially allows for a larger sum of capital to be raised and can be less restrictive than other forms of debt financing. However, whether a company can participate in an IPO or not is highly dependent on market conditions, regulatory requirements, and the readiness of the company itself.
When it comes to information asymmetry, a venture capitalist typically has better information about whether a small firm is likely to earn profits compared to a potential bondholder due to closer involvement and their experience and expertise in assessing start-up ventures. This is pertinent because the quality and availability of information can significantly influence the ease of acquiring financing.
In the current market, factors such as economic climate, investor sentiment, regulatory changes, and technological advancements influence the availability of financing for new ventures. The ease or difficulty of securing financing can fluctuate based on these factors and more, making it a variable situation rather than a static one.