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High-tech entrepreneurial ventures seeking external equity: whether, when, where… and why not?

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  • Anita Quas

    (Emlyon Business School)

  • Diego D’Adda

    (Universitá Politecnica delle Marche)

Abstract

In this paper, we study the demand of high-tech entrepreneurial ventures for external equity, revealing the conditions that determine whether, when and where they decide to seek external equity during their lives. We also provide evidence on the most important reasons for not looking for external equity at all. We focus on a sample of 530 high-tech entrepreneurial ventures located in 7 European countries and founded between 1984 and 2009. We reveal that company-level characteristics, namely the human capital, the innovativeness, the size, the asset intangibility, and the alternatives to equity capital (internal cash flows and debt) determine whether, when (i.e., at what age) and when (i.e., in international or domestic markets) companies seek external equity. Industry- and country-level variables also play a secondary role in explaining high-tech entrepreneurial ventures’ demand for external equity.

Suggested Citation

  • Anita Quas & Diego D’Adda, 2018. "High-tech entrepreneurial ventures seeking external equity: whether, when, where… and why not?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(3), pages 311-334, September.
    • Handle: RePEc:spr:epolin:v:45:y:2018:i:3:d:10.1007_s40812-018-0094-0
    DOI: 10.1007/s40812-018-0094-0
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    More about this item

    Keywords

    High-tech entrepreneurial ventures; Demand for external equity; Human capital; Innovativeness; External financing;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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