Differences in the Usage of Bootstrap Financing among Technology-Based versus Nontechnology-Based Firms

Author: Howard Van Auken

Source: Journal of Small Business Management, Volume 43, Number 1, January 2005 , pp. 93-103(11)

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Abstract:

This study compares owners’ assessment of the importance of 28 bootstrap financing methods between a sample of 44 technology-based and 44 nontechnology-based firms. The results indicated that owners’ of technology-based firms believed that 6 of the 28 bootstrap financing methods were more important as compared to owners’methods of nontechnology-based firms. The bootstrap financing methods also were grouped using Winborg and Landstrom (2001) factors. Owners of technology-based firms believed that bootstrap financing methods that improved cash inflows were more important and that bootstrap financing methods that slowed disbursements were less important compared to owners of nontechnology-based firms. The results can be used by owners of small firms, consultants and by support agencies that provide assistance with financial planning and capital acquisition. Understanding the use and availability of all sources of capital can help owners of small firms to develop comprehensive financial strategies. This information also could be incorporated into training programs for owners and managers of small firms.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1540-627X.2004.00127.x

Affiliations: 1: Iowa State University.

Publication date: 2005-01-01