The use of financial bootstrapping in small and medium-sized ventures and the impact on venture growth and performance

Abstract

This paper contributes to the general knowledge of bootstrap financing among new family ventures in two ways. Firstly, this research reveals which human capital characteristics of the owner-manager has an impact on financial bootstrapping use. The empirical results indicate that the use of bootstrapping techniques does not depend upon the founder’s education, but that it is a skill which is absorbed from self-employed parents or during the founder’s prior work and management experiences. Secondly, in line with the resource dependency theory, we show that a relationship between financial bootstrapping and venture growth is present.