Nascent Entrepreneurs, Innovation and Financing Constraints
AbstractInnovative nascent entrepreneurs face the problem of obtaining finance, mainly due to information problems. We use new data on capital seeking start-ups allowing distinction between planning stage and early stage. Being innovative does not affect the probability of having external finance in the planning stage but has a positive effect in the early stage. Early start-ups with patents have a significantly higher probability of having equity whereas debt is not affected. Patents, coupled with prototypes have a higher probability for external finance which may be due to reduced uncertainties and learning. The most important determinant of debt is house ownership.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 07-09.
Date of creation: 2007
Date of revision:
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Web page: http://www.druid.dk/
Innovation; Entrepreneurship; Finance; Information Asymmetries;
Find related papers by JEL classification:
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-13 (All new papers)
- NEP-CFN-2007-10-13 (Corporate Finance)
- NEP-ENT-2007-10-13 (Entrepreneurship)
- NEP-INO-2007-10-13 (Innovation)
- NEP-KNM-2007-10-13 (Knowledge Management & Knowledge Economy)
- NEP-TID-2007-10-13 (Technology & Industrial Dynamics)
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