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Article
Evidence of Bootstrap Financing among Small Start-Up Firms
The Journal of Entrepreneurial Finance
  • Howard E. Van Auken, Iowa State University
  • Lynn Neeley, Northern Illinois University
Abstract
This study examines the use of bootstrap financing for a sample of 78 firms in a Midwestern state. The results show that traditional sources of capital accounted for 65% of the firms' start-up capital and 35% of the start-up capital was obtained from bootstrap sources. A Chi-squared analysis indicates a significant difference between the percentage of (!) sole proprietorship versus other firms and (2) construction/manufacturing versus other types of firms using bootstrap financing as compared to traditional sources of financing when bootstrap financing comprised at least 60% of the total start-up capital. No significant difference was found between the percentage of firms located in communities less than 10,000 versus greater than 10,000 that used bootstrap financing as compared to the traditional sources of financing.
Publication Date
12-1996
JEL Codes
L25, M13, G32
Keywords
  • Bootstrap Financing,
  • Small Business,
  • Start-Up,
  • Startup
Citation Information
Howard E. Van Auken and Lynn Neeley. "Evidence of Bootstrap Financing among Small Start-Up Firms" (1996) p. 235 - 249
Available at: http://works.bepress.com/howard-vanauken/7/