The Use of Bootstrap Financing Among Small Technology-Based Firms
Vol. Volume 9, Number 2 August/2004
Howard Van Auken
This study examines the use of 28 bootstrap financing methods among a sample of 44 small technology-based firms. The results indicate that, in general, the owners of these firms did not view bootstrap financing to be an important source of capital. The use of bootstrap financing was directly related to the risk of the firm, but inversely related to the size of the firms’ market and whether the owner had searched for capital during the past year. The results can be used by owners of small technology-based firms, consultants, and support agencies that provide assistance to technology-based firms in areas of financial planning and capital acquisition. Understanding the use and availability of all sources of capital can help owners develop comprehensive financial strategies. Agencies that provide support services can use the information to better assist small technology-based firms in developing financial strategies. This information could be incorporated into training programs for owners and managers of small technology-based firms.