A longitudinal study on the relationship between financial bootstrapping and new venture growth |
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| Authors: | Tom Vanacker Sophie Manigart Miguel Meuleman Luc Sels |
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| Affiliation: | 1. Department of Accounting and Corporate Finance , Ghent University , Kuiperskaai 55E, 9000 Ghent, Belgium TomR.Vanacker@UGent.be;3. Department of Accounting and Corporate Finance , Ghent University , Kuiperskaai 55E, 9000 Ghent, Belgium;4. Competence Centre Accounting and Finance , Vlerick Leuven Gent Management School , Reep 1, 9000 Ghent, Belgium;5. Competence Centre Entrepreneurship, Governance and Strategy , Vlerick Leuven Gent Management School , Reep 1, 9000 Ghent, Belgium;6. Research Centre for Organisation Studies, Faculty of Business and Economics , Katholieke Universiteit Leuven , Naamsestraat 69, 3000 Leuven, Belgium |
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| 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: | entrepreneurial finance financial bootstrapping startups growth bootstrap strategies venture development |
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