A Longitudinal Study on the Relationship Between Financial Bootstrapping and New Venture Growth

Entrepreneurship and Regional Development, Forthcoming

Posted: 24 Dec 2010

See all articles by Tom R. Vanacker

Tom R. Vanacker

Ghent University; University of Exeter Business School

Sophie Manigart

Vlerick Business School; Ghent University

Miguel Meuleman

Vlerick Business School; University of Nottingham

Luc Sels

Katholieke Universiteit Leuven - Faculty of Business and Economics (FBE)

Date Written: June 24, 2010

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 paper 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 non-existent 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.

Keywords: entrepreneurial finance, financial bootstrapping, startups, growth

JEL Classification: D81, G31, G32

Suggested Citation

Vanacker, Tom R. and Manigart, Sophie and Meuleman, Miguel and Sels, Luc, A Longitudinal Study on the Relationship Between Financial Bootstrapping and New Venture Growth (June 24, 2010). Entrepreneurship and Regional Development, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1730604

Tom R. Vanacker

Ghent University ( email )

Sint-Pietersplein 7
Gent, 9000
Belgium

University of Exeter Business School ( email )

Streatham Court
Exeter, EX4 4JH
United Kingdom

Sophie Manigart (Contact Author)

Vlerick Business School ( email )

Reep 1
Ghent, BE-9000
Belgium

Ghent University ( email )

Sint-Pietersplein 7
Gent, 9000
Belgium

Miguel Meuleman

Vlerick Business School ( email )

Reep 1
Gent, 9000
Belgium
0032(0)92109770 (Phone)
0032(0)92109790 (Fax)

University of Nottingham

University Park
Nottingham, NG8 1BB
United Kingdom

Luc Sels

Katholieke Universiteit Leuven - Faculty of Business and Economics (FBE) ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

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