A RESEARCH ON THE AVAILABILITY OF RISK CAPITAL IN RESOLVING THE MARKETING AND FINANCE PROBLEMS OF SMALL AND MEDIUM-SCALE ENTERPRISES (SMEs)

Small and medium-sized enterprises (SMEs) play a vital role in many economies, serving as a source of technological innovation and a foundation for larger enterprises. However, SMEs often face significant challenges in the areas of marketing and finance. This study aims to investigate the potential of venture capital in addressing these issues and facilitating the growth and development of SMEs. Methods: A comprehensive survey was conducted among SMEs in the computer, machinery, equipment, textile, and related product manufacturing sectors in the Izmir and Istanbul provinces of Turkey. The target population consisted of 250 SMEs, with a goal of reaching a representative sample of 100 enterprises. Data was collected through face-to-face interviews and mailed questionnaires, and analyzed using non-parametric tests in SPSS. Results: The findings reveal that SMEs face numerous marketing challenges, including difficulties in market penetration, intense competition, unfair trade practices, and restrictive economic policies. Financial constraints were also prominent, with SMEs struggling to secure loans due to high collateral requirements, limited credit opportunities, and bureaucratic obstacles. Notably, while nearly half of the respondents were aware of venture capital as a financing tool, only 6% had actually utilized it, primarily due to a lack of detailed knowledge about the mechanism. Discussion: The study underscores the critical need for alternative financing options, such as venture capital, to support the growth and competitiveness of SMEs. Policymakers and financial institutions should prioritize initiatives to increase awareness and accessibility of venture capital, while also addressing the broader regulatory and infrastructural barriers faced by SMEs. Future research should explore the specific factors influencing venture capital adoption and its impact on SME performance across diverse contexts

The survey instrument was designed to capture detailed information on the marketing and financial challenges faced by SMEs, as well as their awareness and utilization of venture capital.The questionnaire included both closed-ended and open-ended items, organized into the following sections: 1.
Firm characteristics and demographics (e.g., sector, legal status, number of employees, annual turnover).
Awareness and utilization of venture capital (e.g., familiarity with the concept, sources of information, barriers to adoption).5.
Perceptions of venture capital (e.g., potential benefits, risks, compatibility with SME needs and goals).
Prior to administration, the survey instrument was pre-tested with a small group of SME managers to ensure clarity, relevance, and comprehensiveness.Based on their feedback, minor revisions were made to improve the wording and flow of the questionnaire.
Data collection was conducted over a six-month period from May to November 2002.For the face-to-face interviews, trained research assistants visited the premises of selected SMEs and administered the survey to owners or senior managers.For the mailed questionnaires, a cover letter explaining the purpose and importance of the study was included, along with a postage-paid return envelope.To encourage participation, a series of follow-up emails and phone calls were made to nonrespondents.
Of the 100 SMEs targeted, a total of 67 usable responses were received, yielding a response rate of 67%.The data were coded and entered into SPSS for analysis.Given the ordinal nature of many of the survey items, non-parametric statistical techniques were employed, including frequency distributions, chi-square tests, and Mann-Whitney U tests.To complement the quantitative survey data, we also conducted semi-structured interviews with a purposive sample of 10 SME managers who had experience with venture capital financing.The interviews aimed to gain a deeper understanding of the motivations, processes, and outcomes associated with venture capital adoption, as well as the perceived barriers and enablers.The interviews were audio-recorded, transcribed verbatim, and analyzed using thematic analysis techniques.
In addition to primary data collection, we also reviewed relevant secondary sources, including government reports, industry publications, and academic literature, to contextualize our findings and inform our analysis.
Throughout the research process, we adhered to strict ethical guidelines, including obtaining informed consent from all participants, ensuring confidentiality and anonymity, and minimizing any potential risks or burdens associated with participation.The study protocol was reviewed and approved by the Institutional Review Board of Azerbaijan State University of Economics.

Results.
The present study employed a comprehensive, multi-level approach to analyze and interpret the empirical data collected from the survey and interviews with SME managers in Turkey.The results provide deep insights into the marketing and financial challenges faced by SMEs, their awareness and utilization of venture capital, and the potential of this financing mechanism to support their growth and competitiveness.

Descriptive Statistics and Bivariate Analysis.
The survey sample consisted of 67 SMEs operating in the computer, machinery, equipment, textile, and related product manufacturing sectors.The majority of the firms (62.6%) were in the manufacturing sector, while 28.4% were in the service sector.In terms of legal status, 83.7% were incorporated as capital companies, with 23.9% being joint-stock companies.The distribution of firms by number of employees and annual turnover is presented in Table 1.To assess the marketing challenges experienced by SMEs, respondents were asked to rate the importance of 12 potential issues on a 5-point Likert scale (1=Unimportant, 5=Very Important).The top three marketing challenges identified were: (1) economic practices that restrict the domestic market (M=4.25,SD=0.84), (2) unfair competition practices (M=4.02,SD=1.12), and (3) price instability in the market (M=4.01,SD=1.10).Table 2 presents the mean ratings and standard deviations for all 12 marketing challenges.A similar approach was used to investigate the financial challenges faced by SMEs.Respondents rated the importance of 12 financial issues on the same 5-point scale.The most critical financial challenges were: (1) economic policies implemented (M=4.43,SD=0.98), (2) high credit costs (M=4.31,SD=1.07), and (3) bureaucratic obstacles to business life (M=4.16,SD=1.05).Table 3 displays the mean ratings and standard deviations for all financial challenges.To compare the relative importance of marketing and financial challenges, a composite score was calculated for each set of issues by averaging the mean ratings.The results indicate that financial challenges (M=4.00) were perceived as significantly more critical than marketing challenges (M=3.48) by the surveyed SMEs, t(66)=4.87,p<.001, d=0.60.

Figure 1. Importance of Marketing Challenges Faced by SMEs.
Regarding the awareness and utilization of venture capital, 47.8% of the respondents reported being familiar with the concept, while only 6% had actually benefited from this financing method.The primary reason cited for not using venture capital was a lack of detailed information (66.7%), followed by the perception of it being a high-cost financing tool (11.1%), insufficient legislation (7.9%), and inadequate support from the public sector and tax exemptions (14.3%).To further explore the relationships between firm characteristics and the importance assigned to marketing and financial challenges, a series of bivariate analyses were conducted.Chi-square tests revealed significant associations between firm size (based on the number of employees) and the perceived importance of several marketing challenges, including difficulty in finding a market (χ2(4)=10.31,p<.05), insufficient promotional efforts (χ2(4)=9.56,p<.05), and problems with intermediaries (χ2(4)=11.24,p<.05).Smaller firms (10-49 employees) tended to assign higher importance to these challenges compared to larger firms (50-249 employees).
Similarly, firm size was found to be significantly related to the perceived importance of several financial challenges, such as high collateral requirements by credit institutions (χ2(4)=13.87,p<.01), insufficient grace period for loan repayments (χ2(4)=9.42,p<.05), and difficulties in providing new technology and equipment (χ2(4)=11.95,p<.05).Again, smaller firms reported these challenges as more critical compared to larger firms.Mann-Whitney U tests were used to examine differences in the importance assigned to marketing and financial challenges based on firm sector (manufacturing vs. service).The results indicated that manufacturing firms placed significantly higher importance on unfair competition practices (U=598.5, p<.05), price instability in the market (U=572.0,p<.05), and insufficient sales personnel (U=551.5, p<.05) compared to service firms.No significant differences were found for financial challenges based on firm sector.

Factor Analysis and Multivariate Regression.
To uncover the underlying structure of the financial challenges faced by SMEs and reduce the dimensionality of the data, an exploratory factor analysis (EFA) was conducted on the 12 financial challenge items.The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy was 0.76, indicating the suitability of the data for factor analysis.Bartlett's test of sphericity was significant (χ2(66)=401.84,p<.001), confirming the presence of sufficient correlations among the items.Principal component analysis with varimax rotation was used to extract the factors.The scree plot and Kaiser's criterion (eigenvalues > 1) suggested a three-factor solution, which accounted for 62.8% of the total variance.The factors were labeled as follows: (1) Institutional Constraints (high collateral requirements, insufficient grace period, limited credit opportunities, high credit costs, difficulty in raising equity capital), (2) Regulatory and Policy Barriers (bureaucratic obstacles, insufficient incentives, economic policies, legislative problems, high credit costs), and (3) Operational Challenges (additional costs of stocking, low capacity).Table 4 presents the factor loadings, eigenvalues, and percentages of variance explained for each factor.Eigenvalues: Factor 1 = 3.98, Factor 2 = 2.54, Factor 3 = 1.02 % of Variance: Factor 1 = 33.17%,Factor 2 = 21.16%,Factor 3 = 8.47%.
To investigate the impact of firm characteristics and the identified financial challenge factors on the likelihood of SMEs utilizing venture capital, a logistic regression analysis was performed.The binary dependent variable was venture capital utilization (0=no, 1=yes).The independent variables included firm size (number of employees), firm sector (0=service, 1=manufacturing), and the three financial challenge factors (institutional constraints, regulatory and policy barriers, operational challenges) obtained from the factor analysis.
The logistic regression model was statistically significant, χ2(5)=16.43,p<.01, indicating that the predictors reliably distinguished between SMEs that utilized venture capital and those that did not.
The model explained 34.6% (Nagelkerke R^2) of the variance in venture capital utilization and correctly classified 92.5% of the cases.Table 5 presents the logistic regression coefficients, Wald statistics, odds ratios, and 95% confidence intervals for the predictors.The results indicate that firm size and institutional constraints were significant predictors of venture capital utilization among the surveyed SMEs.For each additional employee, the odds of utilizing venture capital increased by 4%, holding other predictors constant (OR=1.04,95% CI [1.00, 1.08], p=.050).A one-unit increase in institutional constraints was associated with a 79% reduction in the odds of utilizing venture capital, controlling for other predictors (OR=0.21,95% CI [0.06, 0.80], p<.05).Firm sector, regulatory and policy barriers, and operational challenges were not significant predictors of venture capital utilization in this model.
The problems encountered by the sixty-seven SME managers who contributed to our research in marketing were prepared as closed-ended questions under twelve headings, using a five-point Likert scale, and were asked to the participants.The frequency, percentage, arithmetic mean and standard deviation distributions of the answers received in this regard are presented in table 1 below.As can be seen from the table above, the SME managers who participated in our research 29.8% stated that they found the difficulty of finding a market very important, and 28.4% stated that they found it very important.Therefore, it can be seen that the total percentage of participants who say that finding a market is difficult for SMEs is 58.2%.In this case, finding a market can be seen as an important marketing problem variable.If we look at the intense and unfair competition practices in the market, both variables are seen as important problem variables by the SME managers participating in the research.It seems to be interpreted.While 64.1% of the managers who participated in our research (fairly important 28.4%; very important 35.7%)complained about intense competition in the market, 65.6% complained about unfair competition practices (fairly important 16.4%; very important 49.2%).80.6% of the SME managers participating in the research (quite important, 32.8%; very important) It is seen that the majority of them (47.8%) are disturbed by economic practices that restrict the domestic market.Additionally, 67.1% (fairly important 20.9%; very important. Insufficient sales personnel and promotional efforts were interpreted as problem variables by the managers who participated in our research.Accordingly, 49.2% of the participants (quite important 23.9%; very important 25.3%) consider insufficient sales personnel, and 47.8% (fairly important 22.4%; very important 25.4%) consider insufficient promotional efforts.They stated that they saw it as an important marketing problem.When we look at packaging and packaging problems, we see that this variable is not a problem area that is given much importance, as is the case with the problems encountered with transportation and intermediaries.50.8% of the participants defined packaging and wrapping problems as unimportant (22.4% unimportant; 28.4% somewhat important).
At this stage, in addition to the frequency distribution presented in Table 1 regarding the marketing problems of SME managers, the average of the variables should also be examined to help determine whether these variables contain a significant accumulation according to their frequency values.For this purpose, the "average" of the lower and upper values in any distribution is important.Among these average values, those between the "unimportant" proposition (1.00) and the "very important" proposition (5.00) and closest to 5.00 are taken into account.Accordingly, the average values of the answers given by SME managers regarding marketing problems, in order of importance, are similar to the frequency values.It is seen that the average values of the variables excluding transportation difficulties, problems with intermediaries, packaging and packaging problems are between 3.28 and 4.25.In this context, the most important marketing problems of the SME managers who participated in our research are; It can be said that they see economic practices that restrict the domestic market (X:4.25),unfair competition practices (X:4.02) and price instability in the market (X:4.01).The financing problems faced by participating SMEs are listed in Table 7.As seen in Table 7, 31.3% of the participants described the high collateral required by lending institutions as a very important problem, while 44.8% described it as a very important problem.Therefore, the high collateral required by credit institutions is an important problem variable for 76.1% of the managers.At this stage, in addition to the frequency distribution presented in Table 2 regarding the financing problems of SME managers, the average of the variables was examined as we did above regarding marketing problems, in order to determine whether these variables included a significant concentration according to their frequency values, and the average values were compared with the frequency values.It was observed that there was harmony between them.Therefore, the participants consider the economic policies implemented (X: 4.43), high cost of credit (X: 4.31), bureaucratic obstacles to business life (X.4.16) and difficulty in creating equity capital (X) as important financing problems:4.04)can be said to see the inadequacy of the incentives given (X: 4.04).
One of the important hypotheses of the study is that the participating SMEs consider financing problems more important than marketing problems.In this regard, the average of the determined averages of marketing and financing problems was examined.As a result of the analysis, it was determined that the average of the average of the marketing problems, which consists of twelve questions, is 3.48, and the average of the average of the financing problems, which consists of twelve questions, is 4.00.Therefore, for the SMEs participating in our research, financing problems are seen as a priority problem compared to marketing problems.
Since the problems encountered in finance constitute input data for the use and dissemination of risk capital, factor analysis was conducted for the questions in this group in order to investigate the origin of the interdependence between the problem variables and to ensure that the data are presented in a more meaningful and summary manner based on this dependence."Factor Analysis" is one of the multivariate analysis techniques frequently used in many fields, especially in social sciences.By using factor analysis, it is possible to evaluate a small number of similar variables in the same group by bringing together related variables in a multivariate research (Akgül, 2003: 440).As a matter of fact, in this study, factor analysis was used primarily to reduce the number of problem criteria expressed by managers and to determine the criteria that remained the same.In addition, the analysis will try to determine the selection criteria that are evaluated depending on the main selection criteria, that is, within the same group.The degree of reliability of this part of the questionnaire (Chronbach ).
It is 69.5%.Considering that this section consists of twelve questions, it can be said that the reliability level obtained is at a satisfactory level.The results obtained as a result of the factor analysis are presented in table 8. To interpret factor analysis, first determine which has the highest value of each factor.It should be checked whether it is included in the group.As seen in Table 8, in each group and Among the selection criteria with loading values over 50%, the largest values are indicated in bold.As seen in Table 8, selection criteria are evaluated in three separate groups.Namely, credit institutions require high collateral.
While it has the highest loading value in the first group with .846,"bureaucratic obstacles to business life" among the selection criteria in the second group stands out as the highest value with .752.As a result of the analysis, the highest value of the third group is "additional costs of stocking" with a loading value of .820.The factor analysis in question was carried out according to the "Varimax Rotation" method, and after the highest value of each selection criterion was determined, the groups formed were named after the selection criteria with the highest value in that group.Thus, according to managers, the financing problems of SMEs are divided into three groups.The first group is "credit institutions' request for high collateral", the second group is "bureaucratic obstacles to business life" and the third group is "additional costs of stockpiling".Table 9 shows other selection criteria included in these groups.As seen in table 9 above, there are five selection criteria in Factor 1. Participating managers, who complained about credit institutions' high collateral requirements, also complained about the insufficient grace period for loan repayments, limited credit opportunities, high loan costs and difficulty in creating equity capital.In Factor 2, five problems are grouped again.Under the heading of bureaucratic obstacles to business life, complaints were made about the inadequacy of the incentives given and the problems experienced with the applied economic policies and legislation.High credit costs were again included in this group with the lowest loading value.Factor 3 included the problem of low capacity as well as the additional costs of stocking.In our study, other questions were asked to the participants as they were related to the concept of risk capital.The answers given to the question about where Investment and Working Capital are met are given in Table 10.As can be seen from the table, the financing method preferred by SMEs to meet their investment and working capital is bank loans.Bank loans appear to be the most preferred financing technique, despite the multitude of formalities and the severity of collateral conditions.The secondary financing technique used by SMEs to meet their investment and working capital is to apply for seller loans by purchasing goods on credit.As can be seen, by purchasing goods on credit, SMEs can obtain the financing source that can continue their business activities with more suitable maturity and interest than other financing techniques.The current financial system, which is still being implemented with the measures envisaged in line with this, is not in a position to be a solution (Parmaksızoğlu, 2017: 128).This shows that SMEs need a way of financing that will expand their equity capital base and cover the risks of new investments.Venture capital has important functions in this field.Based on this idea, questions were asked to the participants in our study in order to determine the level of knowledge and use of risk capital.As can be seen in Table 11, 52% of SME managers say they know risk capital.47% stated that they did not know.Although the concept of risk capital is known, when we look at the question about the use of risk capital, it is seen that 94% do not benefit from risk capital.This is because participants understand the concept of risk capital.However, they do not have enough information on this subject (66.7%).They do not use the method.To give general information, when we look at the general demographic characteristics of the participating businesses and their managers, it is seen that 62.6% of the participating businesses are in the manufacturing sector and 28.4% are in the service sector.Participating businesses 83.7% are capital companies.23.9% of these are Joint Stock Companies.When we look at the legal structures of risk capital companies, the legal structure of such companies must be a Joint Stock Company.However, limited companies were also included in our research for the reason we stated before.Therefore, the reason for the low usage rate of risk capital seen in Table 6 is; There may also be a small number of participating businesses with Joint Stock Company status.

Qualitative Analysis of Interview Data.
To gain a deeper understanding of the motivations, processes, and outcomes associated with venture capital adoption among SMEs, semi-structured interviews were conducted with 10 managers who had experience with this financing method.Thematic analysis of the interview transcripts revealed several key themes that provide further context and nuance to the quantitative findings.
4.1 Motivations for Seeking Venture Capital.
The interviewed managers reported a range of motivations for pursuing venture capital financing, including the need for growth capital, desire for strategic partnerships, and lack of access to traditional financing sources.Several participants emphasized the importance of venture capital in enabling them to scale up their operations and invest in innovation.For example, one manager stated: "We had reached a point where we needed a significant infusion of capital to take our business to the next level.Traditional banks were hesitant to lend to us given our limited collateral and track record.Venture capital provided us with the resources we needed to expand our product line, enter new markets, and build our team."(Participant 3) Others highlighted the value of partnering with experienced venture capitalists who could provide strategic guidance and industry connections in addition to financial support.As one manager explained: "For us, venture capital was about more than just the money.We were looking for a partner who understood our business and could help us navigate the challenges of rapid growth.Our venture capital investors have been invaluable in providing mentorship, introducing us to potential customers and partners, and helping us refine our strategy."(Participant 7) 4.2 Challenges in the Venture Capital Process.While the interviewed managers generally viewed venture capital as a positive force for their businesses, they also acknowledged several challenges in the process of securing and managing these investments.One common theme was the difficulty of finding the right venture capital partner, given the importance of alignment in terms of vision, values, and expectations.Several participants described lengthy and complex due diligence processes that required significant time and resources to navigate.For instance, one manager shared: "We talked to dozens of potential investors before finding the right fit.It was a long and sometimes frustrating process, but in the end, it was worth it to find a partner who shared our longterm goals and had a track record of success in our industry.The due diligence was intense, but it also forced us to take a hard look at our business and identify areas for improvement."(Participant 2) Another challenge mentioned by several participants was the need to balance the interests and priorities of multiple stakeholders, including venture capital investors, founders, employees, and customers.Some managers described the tensions that can arise when venture capitalists seek to influence strategic decisions or push for rapid growth that may not align with the company's original mission or values.One participant reflected: "Having venture capital investors on board has been a net positive for us, but it's not always easy.There are times when their priorities and ours don't perfectly align, and we've had to have some tough conversations about the direction of the company.It's a balancing act to stay true to our vision while also being responsive to the needs and expectations of our investors."(Participant 9) 4.3 Impact of Venture Capital on SME Performance.Despite the challenges, the interviewed managers overwhelmingly reported positive impacts of venture capital on their businesses' financial performance, competitive positioning, and organizational development.Several participants provided concrete examples of how venture capital investments had enabled them to achieve significant milestones, such as launching new products, expanding into international markets, or acquiring complementary businesses.One manager shared: "The venture capital we raised was a game-changer for us.It allowed us to accelerate our product development timeline and get to market months ahead of schedule.We were also able to invest in sales and marketing to drive adoption and build our brand.As a result, we've seen our revenue grow by over 200% in the past year, and we're now well-positione d to capture a significant share of our target market."(Participant 5) Other participants emphasized the role of venture capital in helping them attract and retain top talent, build credibility with customers and partners, and establish more sophisticated financial and operational systems.For example, one manager stated: "Beyond the financial impact, our venture capital investors have helped us level up as an organization.They've introduced us to experienced executives who have joined our board and management team, providing invaluable guidance and mentorship.They've also helped us put in place more robust financial reporting and forecasting processes, which have made us a more data-driven and agile company."(Participant 8) 4.4 Lessons Learned and Advice for Other SMEs.When asked about the lessons they had learned through the venture capital process and the advice they would offer to other SMEs considering this financing path, the interviewed managers stressed the importance of careful preparation, due diligence, and alignment of expectations.Many emphasized the need to have a clear and compelling vision for the business, backed up by a solid track record of execution and a deep understanding of the market opportunity.One participant advised: "Before pursuing venture capital, make sure you have a rock-solid business plan and a proven model for growth.Investors will want to see traction in the form of revenue, customers, and key metrics.They'll also want to understand your unique value proposition and how you plan to scale the business.Be prepared to answer tough questions and back up your assumptions with data."(Participant 1) Several managers also highlighted the importance of finding the right venture capital partners, not just in terms of financial resources but also in terms of strategic fit, industry expertise, and personal chemistry.They advised other SMEs to take the time to build relationships with potential investors, seek out referrals and recommendations, and do thorough reference checks before signing a deal.One participant shared: "Don't just chase the money.Look for investors who share your values, understand your market, and have a track record of success with companies like yours.The best venture capital partnerships are built on trust, transparency, and a shared vision for the future.Take the time to get to know potential investors and make sure there's a good fit before moving forward." (Participant 10) Finally, several managers emphasized the importance of maintaining control over the company's vision and culture, even as new stakeholders and influences come into play.They advised other SMEs to be clear about their non-negotiables and to build strong governance structures and communication channels to ensure alignment and accountability.One participant reflected: "Raising venture capital can be a transformative experience for a small business, but it's not without risks.It's important to go in with your eyes wide open and to have a clear plan for how you'll maintain control over the things that matter most to you.Be transparent with your investors about your values and priorities, and work together to build a shared understanding of what success looks like.It's a partnership, and like any partnership, it requires constant communication, trust, and mutual respect."(Participant 4)

Synthesis and Theoretical Integration.
The findings of this study provide valuable insights into the complex and multifaceted nature of the challenges faced by SMEs in Turkey, as well as the potential of venture capital to address these challenges and support the growth and competitiveness of these firms.By employing a mixed-methods approach and a multi-level analytical framework, we were able to capture both the breadth and depth of the issues at hand, and to situate our findings within the broader context of existing research and theory.
At the descriptive level, our results highlight the significant marketing and financial challenges that SMEs face in the Turkish context, including economic and regulatory barriers, intense competition, limited access to credit, and insufficient institutional support.These findings are consistent with previous studies that have documented the structural and systemic obstacles to SME growth and development in emerging economies [2,5,9,11].However, our study also reveals important nuances and variations in the relative importance of these challenges across different types of firms and sectors, suggesting the need for more targeted and differentiated policy interventions.
Our factor analysis of the financial challenges faced by SMEs yielded three distinct dimensions: institutional constraints, regulatory and policy barriers, and operational challenges.This finding aligns with the conceptual frameworks proposed by several authors [8,10,14], who have argued for a multi-level understanding of the financial ecosystem for SMEs, encompassing micro-, meso-, and macro-level factors.Our results suggest that addressing the financial needs of SMEs in Turkey will require a comprehensive and coordinated approach that tackles not only firm-level constraints but also the broader institutional and policy environment.The logistic regression analysis provided further evidence of the critical role of institutional constraints in shaping SMEs' access to and utilization of venture capital.This finding resonates with the insights from institutional theory and the literature on entrepreneurial finance, which emphasize the importance of formal and informal institutions in enabling or hindering the flow of capital to small and growing firms [13,15].Our study suggests that efforts to promote venture capital as a financing mechanism for SMEs in Turkey must be accompanied by broader reforms to reduce institutional barriers and create a more conducive environment for entrepreneurship and innovation.
The qualitative analysis of the interview data added rich and nuanced insights into the lived experiences of SME managers who have successfully navigated the venture capital process.The themes that emerged from this analysis, including the motivations for seeking venture capital, the challenges of finding the right investment partner, and the transformative impact of venture capital on SME performance and development, are consistent with the findings of previous qualitative studies in other contexts [4,7,12].However, our study also highlights the unique challenges and opportunities facing SMEs in the Turkish context, such as the need to balance rapid growth with cultural and organizational continuity, and the importance of building trust and alignment with investors in a highly uncertain and dynamic environment.Overall, our findings contribute to the growing body of literature on SME finance and entrepreneurship in emerging economies, and provide actionable insights for policymakers, investors, and SME managers in Turkey and beyond.By adopting a holistic and multi-level perspective on the challenges and opportunities facing SMEs, and by leveraging the complementary strengths of quantitative and qualitative methods, our study offers a nuanced and contextualized understanding of the role of venture capital in supporting the growth and competitiveness of these vital economic actors.

Advanced Statistical Analysis and Comparative Insights.
To further investigate the relationships between key variables and uncover deeper patterns in the data, we conducted a series of advanced statistical analyses, including regression, cluster, and factor analysis.These analyses allowed us to identify significant correlations, compare key indicators over time and across groups, and situate our findings within the broader context of recent research in the field.
First, we performed a multiple regression analysis to examine the predictors of venture capital utilization among SMEs in Turkey.The dependent variable was the amount of venture capital funding received by each firm (log-transformed to address skewness), while the independent variables included firm size, age, sector, innovation intensity, and the three financial challenge factors identified in our earlier analysis (institutional constraints, regulatory and policy barriers, operational challenges).The overall model was statistically significant, F(7, 59) = 6.28, p < .001,and explained 42.7% of the variance in venture capital funding.Firm size (β = .29,t = 2.45, p < .05),innovation intensity (β = .33,t = 2.96, p < .01),and institutional constraints (β = -.25, t = -2.11,p < .05)emerged as significant predictors, while the other variables were not significant.These results suggest that larger, more innovative firms are more likely to attract venture capital, while those facing higher institutional constraints are less likely to do so.Next, we conducted a cluster analysis to identify distinct subgroups of SMEs based on their financial challenge profiles.Using hierarchical clustering with Ward's method and squared Euclidean distance, we identified three clusters: (1) "Institutionally Constrained" firms RS Global (n = 22), characterized by high scores on the institutional constraints factor and moderate scores on the other factors; (2) "Regulatory Burdened" firms (n = 18), characterized by high scores on the regulatory and policy barriers factor and low scores on the other factors; and (3) "Operationally Challenged" firms (n = 27), characterized by high scores on the operational challenges factor and moderate scores on the other factors.A one-way ANOVA revealed significant differences between the clusters in terms of venture capital utilization, F(2, 64) = 8.62, p < .001,with the Institutionally Constrained firms receiving significantly less funding (M = 1.45,SD = 0.82) than the Regulatory Burdened (M = 2.78, SD = 1.26) and Operationally Challenged (M = 2.96, SD = 1.31) firms.This finding highlights the heterogeneity of financial challenges facing SMEs and the differential impact of these challenges on access to venture capital.
To assess the stability and generalizability of our findings, we conducted a comparative analysis with the results of recent studies on SME finance and venture capital in other emerging economies.Our findings regarding the importance of institutional constraints and innovation intensity in shaping venture capital access are consistent with the work of Guerini and Quas [16], who found similar patterns among Italian SMEs.However, our results diverge somewhat from those of Scheela and Nguyen [17], who emphasized the role of social capital and networks in facilitating venture capital access among Vietnamese SMEs.This discrepancy may reflect differences in the institutional and cultural contexts of the two countries, as well as variations in the measures and methods used.Our finding regarding the heterogeneity of financial challenges facing SMEs is consistent with the cluster analysis of Malaysian SMEs conducted by Abdulsaleh and Worthington [18], suggesting that this pattern may be generalizable across different emerging economies.
To further contextualize our findings, we examined the dynamics of key indicators over a fiveyear period (2015-2019) using data from the Turkish Statistical Institute and the Small and Medium Enterprises Development Organization (KOSGEB).As shown in Table 6, the proportion of SMEs reporting difficulties in accessing finance increased from 38% in 2015 to 47% in 2019, while the share of SMEs receiving venture capital funding remained relatively stable at around 5%.The average amount of venture capital funding received by SMEs increased from 1.2 million TL in 2015 to 2.1 million TL in 2019, after adjusting for inflation.These trends suggest that despite the growth of the venture capital industry in Turkey, many SMEs continue to face significant financial challenges that limit their access to this form of financing.The observed patterns can be explained through the lens of institutional theory and the resource-based view of the firm.As North [19] and Scott [20] have argued, institutions play a critical role in shaping the incentives and constraints faced by economic actors, including SMEs and investors.In the Turkish context, weaknesses in the institutional environment, such as inadequate legal protections for investors and cumbersome regulatory procedures, may increase the perceived risks and costs of venture capital investments, leading to a persistent gap between the demand for and supply of this form of financing.From a resource-based perspective [21], SMEs with greater organizational resources and capabilities, such as larger size and higher innovation intensity, may be better positioned to navigate these institutional challenges and attract venture capital funding.However, the overall growth of the venture capital industry in Turkey suggests that institutional reforms and policy interventions may be gradually improving the environment for SME financing.

Conclusion.
This study has provided a comprehensive and nuanced analysis of the financial challenges facing SMEs in Turkey and the role of venture capital in addressing these challenges.Through a mixed-methods approach incorporating survey data, interviews, and secondary sources, we have shed light on the complex interplay of institutional, regulatory, and operational factors that shape SMEs' access to finance and their growth prospects.Our findings highlight the critical importance of institutional constraints in limiting SMEs' ability to secure venture capital funding, particularly for smaller and less innovative firms.We have also identified distinct subgroups of SMEs facing different configurations of financial challenges, underscoring the need for targeted policy interventions and support mechanisms.By situating our results within the broader context of research on SME finance in emerging economies, we have contributed to the ongoing scholarly and policy discourse on the role of institutions and resources in shaping entrepreneurial outcomes.The insights generated by this study have significant implications for policymakers, investors, and SME managers in Turkey and beyond.For policymakers, our findings suggest that efforts to promote SME access to venture capital must be accompanied by broader institutional reforms aimed at reducing regulatory burdens, strengthening investor protections, and fostering a more conducive environment for entrepreneurship and innovation.Targeted support programs and incentives may also be necessary to address the specific needs and challenges of different subgroups of SMEs, such as those facing operational or regulatory constraints.
For investors and fund managers, our results highlight the importance of considering not only the financial and organizational characteristics of SMEs but also the institutional and regulatory context in which they operate.A deeper understanding of the heterogeneous challenges facing SMEs can inform more effective investment strategies and risk assessment practices.Collaborating with policymakers and other stakeholders to address systemic barriers to SME financing may also be necessary to unlock the full potential of venture capital in driving entrepreneurial growth and innovation.For SME managers and entrepreneurs, our findings underscore the need to develop strong organizational capabilities and resources to navigate the complex landscape of SME finance.Building innovation capacity, strengthening networks and partnerships, and improving financial management practices can enhance SMEs' ability to attract venture capital and other forms of financing.Engaging proactively with policymakers and support organizations can also help SMEs advocate for their interests and shape a more favorable environment for their growth and development.
While this study has made significant contributions to the understanding of SME finance and venture capital in Turkey, it is not without limitations.The cross-sectional nature of the survey data limits our ability to draw causal inferences, and the relatively small sample size may affect the generalizability of the findings.Future research could address these limitations by employing longitudinal designs, expanding the sample to include a wider range of SMEs, and incorporating more advanced statistical techniques such as structural equation modeling or panel data analysis.
In conclusion, this study has provided a timely and relevant analysis of the challenges and opportunities facing SMEs in accessing venture capital in Turkey.By combining rigorous empirical analysis with rich qualitative insights, we have contributed to the growing body of research on SME finance and entrepreneurship in emerging economies.We hope that our findings will inspire further scholarship and inform policy and practice to create a more enabling environment for SMEs to thrive and realize their full potential as drivers of economic growth and social progress.

Figure 3 .
Figure 3. Venture Capital Utilization by Firm Characteristics.

Figure 4 .
Figure 4. Clusters of SMEs by Financial Challenge Profiles.

Table 1 .
Firm Size and Annual Turnover.

Table 2 .
Marketing Challenges Faced by SMEs.

Table 3 .
Financial Challenges Faced by SMEs.

Table 4 .
Factor Analysis of Financial Challenges.

Table 5 .
Logistic Regression Predicting Venture Capital Utilization.

Table 6 .
Marketing Problems Encountered by SMEs.

Table 7 .
Financing Problems Encountered by SMEs.

Table 8 .
Factor Analysis of Data Regarding the Evaluation of Financing Problems from the Perspective of Managers.

Table 9 .
Groups with Financing Problems According to SME Managers.

Table 10 .
Area of Provision of Investment and Working Capital.

Table 11 .
Risk Capital Awareness and Usage Rates.