Campus Units
Management
Document Type
Article
Publication Date
2003
Journal or Book Title
Journal of Small Business Strategy
Volume
14
Issue
2
First Page
22
Last Page
36
Abstract
This study examines the use of 27 bootstrap financing methods among a sample of 91 small firms. Owners' rankings of the importance suggested that bootstrap financing was not central to their firms 'financing strategy. Owners who had greater difficulty of raising capital ranked bootstrap financing methods that (I) slowed disbursements, (2) generated cash, and (3) subsidized operations as being more important than owners who experienced less difficulty in raising capital. Owners who believed their firms were more undercapitalized ranked bootstrap financing methods that (I) slowed disbursements. (2) generated cash, and (3) minimized investment as being more important than owners who experienced less difficulty in raising capital. The use of bootstrap financing was also directly related to the risk of the firm. The results can be used by owners of small firms, consultants, and support agencies that provide assistance to small firms in areas of financial planning and capital acquisition. Understanding the use and availability of all sources of capital will enable owners to obtain a comprehensive understanding of capital alternatives and financial strategies. Agencies that provide support services can use the information to better assist small firms in developing financing strategies. This information could easily be built into training programs for both new and existing small businesses.
Rights
This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Copyright Owner
Van Auken
Copyright Date
2003
Language
en
File Format
application/pdf
Recommended Citation
Van Auken, Howard, "An Empirical Investigation of Bootstrap Financing Among Small Firms" (2003). Management Publications. 22.
https://lib.dr.iastate.edu/management_pubs/22
Included in
Business Administration, Management, and Operations Commons, Entrepreneurial and Small Business Operations Commons, Finance and Financial Management Commons
Comments
This article is from Journal of Small Business Strategy 14 (2003): 22.