Acquisition of Additional Equity Capital by Small Firms – Findings from the National Survey of Small Business Finances |
| |
Authors: | Charles Ou George W Haynes |
| |
Institution: | (1) U.S. Small Business Administration, 409 3rd Street SW, Suite 5000, Washington, 20416, DC, USA;(2) Montana State University, 205B Herrick Hall, Bozeman, 59717, MT, USA |
| |
Abstract: | While the importance of venture capital to the growth of small firms has been widely discussed during the past decade, little
is known about the acquisition of additional equity capital, especially internal equity capital, by the majority of small
firms in the U.S. This paper utilizes the information collected in the Federal Reserve Board’s 1993 and 1998 Small Business
Finance Surveys to investigate the acquisition of additional equity capital by small firms. While the importance of public
issue markets and venture capital investment in promoting the growth of small dynamic firms cannot be denied, the importance
of external equity capital seems to be overstated. Only a very small number of small firms acquired additional external equity
capital. It is the internal equity capital, not external, equity, that is one of the major financing sources for most small
firms. We found that younger, lower quality firms were more likely to acquire additional internal equity capital than other
firms. There appeared to be a “pecking order” of borrowing from internal sources to traditional lenders to non-traditional
lenders. In addition, internal equity capital and debt acquired from traditional and non-traditional lenders appeared to be
complementary financial resources. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|