The debt-equity financing decisions of U.S. startup firms

Coleman, Susan; Cotei, Carmen; Farhat, Joseph

doi:10.1007/s12197-014-9293-3

Cited by 55 publications

(57 citation statements)

References 31 publications

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“…The political and economic environment is also an important factor influencing the financing behavior of enterprises (Bushman, Piotroski, & Smith, 2004; M. L. Rocca, Staglianò, T. L. Rocca, Cariola, & Skatova, 2018). In addition to the external environment, including economic, political and financial environment mentioned above, some scholars focus on the internal characteristics of enterprises (Fernandes, 2011;Rossi, Lombardi, Siggia, & Oliva, 2015;Coleman, Cotei, & Farhat, 2016). The firm characteristics can affect the acquisition of external sources of financing (Gartner, 2012;Rocca et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

Research on Financing Ecology and Financing Efficiency of Strategic Emerging Industries in China

Geng

Xiao-shu

2019

Journal of Business Economics and Management

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After integrating external ecological and endogenous factors of the development of the industry, the paper builds a financing ecology index system, and analyses the financing ecology of strategic emerging industries in recent years. Then the paper further analyses the influence of external and internal financing ecology on financing efficiency. The results show that the financing ecology of the strategic emerging industries, external financing ecology in particular, is in the continuous improvement. The financing efficiency is significantly positively correlated with the macro-economy level and the internal financing ecology, and significantly negatively correlated with the role of government. There is a positive but non-significant correlation between financial development and financing efficiency, meanwhile a negative and non-significant correlation between credit environment and financing efficiency. The internal and external financing ecology can be replaced to some extent. Therefore, the strategic emerging industries should give full consideration to the synergistic optimization of the endogenous factors and external financing ecology so as to improve the financing efficiency.

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Section: Introductionmentioning

confidence: 99%

Research on Financing Ecology and Financing Efficiency of Strategic Emerging Industries in China

Geng

Xiao-shu

2019

Journal of Business Economics and Management

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“…Also, Oliveira and Fortunato (2006), Werner and Faulenbach (2008) and Hegarty and Jones (2008) bring similarly statements. Coleman et al (2014) proved the owner age is significant factor in explaining the composition of young firm capital structure. They state older individuals are more risk averse and they use debt financing less than younger ones.…”

Section: The Impact Of the Age On The Opinion That Smes In Other Eu Cmentioning

confidence: 99%

“…All presented studies declared relation between the age of the entrepreneurs and the interest rate risk. Coleman et al (2014) proved that owner age is a significant factor in explaining the composition of start-up capital. They stated that young firm are more likely to access less formal debt and that the reasons for that are raising interest rates and collateral requirements.…”

Section: Literature Reviewmentioning

confidence: 99%

The Relationship between the Risk of a Change of the Interest Rate and the Age of Entrepreneurs among Slovak SMEs

Majková¹

2016

JOC

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Young entrepreneurs and start-up founders are considered to be a drivers of innovation which is an important element of knowledge economy and competitiveness of each country. But their early age could be perceived as a factor causing the increasing impact of the credit risk because young entrepreneurs usually have a short company history, weak capital power and a lack of the guarantees. The main objective of this paper is to bring scientific evidence that the age of the entrepreneur should be considered as a factor with the significant impact on one part of the credit risk of a company-the risk of a change of the interest rate. The research was carried out among 438 Slovak companies in 2016. Based on Pearson´s chi-square analysis of the results of our research, we bring statistical evidence that age has a significant impact on the ability of the company to protect the firm against the change of the interest rate. We also found out that there is dependence between the age of the owner and the opinion that SMEs in the other EU countries have better loan conditions, especially lower interest rates, than Slovak SMEs. Research findings indicate that young entrepreneurs have problems with obtaining capital and increasing interest rates and collaterals because of their higher risk profile. But effective state support of young and innovative companies through venture financing can lead to increasing global competitiveness of the Slovak Republic.

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“…However, according to Coleman et al [8] the firms' and founders' individual characteristics also have an influence on the decision to use financing from such informal sources: for example, firms with high-growth prospects (as well as less educated entrepreneurs) were found to have more personal funding, especially in forms of loans from family and friends.…”

Section: Family and Friendsmentioning

confidence: 99%

“…Hanssens et al [7] found that leverage ratios for a sample of Belgian startup firms were higher compared to the sample for all firm-year observations. In the study of Coleman et al [8], 57% of the sample of newly-formed businesses in the United States used debt in their capital structure. At the same time, according to the study of Minola et al [9], financing of new technology-based firms is influenced by higher information asymmetry and correspondingly, equity financing for such firms occurs prior to debt.…”

Section: Introductionmentioning

confidence: 99%

Owners and CEOs of Startups: Evidence from Russia

Guseva¹,

Stepanova²

2019

КФ

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In this paper, the authors focus on two primary governance mechanisms which can be considered as sources of support for startup companies: the company’s ownership contingent and the company’s management personnel. Based ondescriptive statistics from a sample of 416 Skolkovo start-ups from the ‘Nuclear’ and ‘Space’ clusters, and a Start-up-Barometer survey of 300 IT-entrepreneurs, this work provides new insights into ownership and management characteristicsof Russian startups and the interplay between these dynamics.The Russian venture market presents an interesting case of an emerging market with a number of successful startups ina challenging economic environment. The supply of venture capital for Russian startups is restricted by the presence ofsanctions and legal restrictions on the investments of financial institutions such as pension funds and banks. Therefore,similar to other developed and developing markets, the most significant source of investments for Russian startups isbootstrapping.In this paper we show that startups with different characteristics attract different kinds of investors, which is reflected inthe companies ownership structures. In particular, government development institutes are more interested in investingin nuclear-focused startups, while corporate investors tend to keep a higher level of control over startups compared toother investors. We also confirmed the presence of correlations between different types of owners: government development institutions, corporate investors, venture funds, and family members. Additionally, the size of equity share for alltypes of owners (except family members) was found to be negatively correlated with the CEO’s share in the ownershipstructure.Although the purpose of the article is descriptive, it motivates further research on the sources of support of startupgrowth, including relative importance of such sources and their effects on startup performance.

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The debt-equity financing decisions of U.S. startup firms

Cited by 55 publications

References 31 publications

Research on Financing Ecology and Financing Efficiency of Strategic Emerging Industries in China

Research on Financing Ecology and Financing Efficiency of Strategic Emerging Industries in China

The Relationship between the Risk of a Change of the Interest Rate and the Age of Entrepreneurs among Slovak SMEs

Owners and CEOs of Startups: Evidence from Russia

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