A longitudinal study on the relationship between financial bootstrapping and new venture growth
Vanacker, Tom Manigart, Sophie Meuleman, Miguel Sels, Luc
Vanacker, Tom
Manigart, Sophie
Meuleman, Miguel
Sels, Luc
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2011
Journal
Entrepreneurship & Regional Development
Book
Publication Volume
23
Publication Issue
9/10
Publication Begin page
681
Publication End page
705
Publication Number of pages
Collections
Abstract
While bootstrap finance is widely used in entrepreneurial ventures, both scholars and practitioners have presented conflicting views on the relation between financial bootstrapping and venture growth. This article empirically investigates the association between bootstrap strategies used at startup and subsequent venture growth. For this purpose, we use a longitudinal database comprising data from both questionnaires and financial accounts of 214 new ventures. Findings demonstrate that the association between financial bootstrapping and venture growth is either nonexistent or positive. More specifically, new ventures that use more owner funds, employ more interim personnel, encourage customers to pay more quickly, and apply for more subsidy programs exhibit higher growth over time. We discuss the managerial and policy implications of these results and suggest avenues for future research.
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Keywords
Entrepreneurship, Entrepreneurial Finance, Financial Bootstrapping, Startups, Growth, Bootstrap Strategies, Venture Development