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Financial Bootstrapping: a critical entrepreneurship skill

Author

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  • Anabela Schinck

    (CEFAGE_UE)

  • Soumodip Sarkar

    () (CEFAGE_UE,Department of Management, University of Évora, Portugal)

Abstract

Bootstrapping finance involving the use of resources to start and grow a venture at the lowest possible or even at no cost, acquires especial significance in times of a credit crunch. In this paper we explore, for the first time the use of bootstrap finance techniques in a small country European case. Based on a sample of ninety-nine Portuguese firms we first determine the most popular bootstrapping strategies, and then we test a set of hypotheses involving several socio-demographic and economic variables, some for the first time in the literature. The results yield some very interesting insights on small business strategies of non-conventional methods of financing. This paper also reveals how these strategies are related to characteristics of the small business owner, namely gender and education, as well as two business characteristics of the firm, that of firm size and internationalization.

Suggested Citation

  • Anabela Schinck & Soumodip Sarkar, 2012. "Financial Bootstrapping: a critical entrepreneurship skill," CEFAGE-UE Working Papers 2012_20, University of Evora, CEFAGE-UE (Portugal).
  • Handle: RePEc:cfe:wpcefa:2012_20
    as

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    File URL: http://www.cefage.uevora.pt/en/content/download/3087/41142/version/1/file/2012_20.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Warrants: Entrepreneurship; financial bootstrapping; small firm financing.;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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