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The use of bootstrapping by women entrepreneurs in positioning for growth

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  • Candida G. Brush
  • Nancy M. Carter
  • Elizabeth J. Gatewood
  • Patricia G. Greene
  • Myra M. Hart

Abstract

The number of women entrepreneurs is rising rapidly and many are creating substantial businesses. For most women-led ventures, growth is funded by personal investment and debt, although a small percentage draw on private equity investment to fuel high growth. Of those that seek growth, not only do they face higher obstacles in obtaining capital, but little is known about ways they position ventures for growth. This paper addresses the question: ‘How do women develop financing strategies to prove the business concept, meet early stage milestones, and demonstrate to external investors the value and potential of their businesses?’ Data are drawn from phone interviews with 88 US female entrepreneurs seeking an equity investment to grow their businesses. The analysis examines the correspondence between bootstrapping and stage of business development. Results show significant differences in the use of bootstrap options utilized by women-led ventures depending on stage of business development. Companies that have not achieved sales were more likely to emphasize bootstrapping to reduce labour, while those companies with greater sales were more likely to minimize cost of operations. Implications for future research and education are suggested.

Suggested Citation

  • Candida G. Brush & Nancy M. Carter & Elizabeth J. Gatewood & Patricia G. Greene & Myra M. Hart, 2006. "The use of bootstrapping by women entrepreneurs in positioning for growth," Venture Capital, Taylor & Francis Journals, vol. 8(1), pages 15-31, October.
    • Handle: RePEc:taf:veecee:v:8:y:2006:i:1:p:15-31
    DOI: 10.1080/13691060500433975
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    1. Joakim Winborg, 2008. "Use of financial bootstrapping in new businesses: a question of last resort?," Venture Capital, Taylor & Francis Journals, vol. 11(1), pages 71-83, April.
    2. Miao, Chao & Rutherford, Matthew W. & Pollack, Jeffrey M., 2017. "An exploratory meta-analysis of the nomological network of bootstrapping in SMEs," Journal of Business Venturing Insights, Elsevier, vol. 8(C), pages 1-8.
    3. Pourya Darnihamedani & Siri Terjesen, 2022. "Male and female entrepreneurs’ employment growth ambitions: the contingent role of regulatory efficiency," Small Business Economics, Springer, vol. 58(1), pages 185-204, January.
    4. Gry Agnete Alsos & Elisabet Ljunggren, 2017. "The Role of Gender in Entrepreneur–Investor Relationships: A Signaling Theory Approach," Entrepreneurship Theory and Practice, , vol. 41(4), pages 567-590, July.
    5. Kimberly A. Eddleston & Jamie J. Ladge & Cheryl Mitteness & Lakshmi Balachandra, 2016. "Do you See what I See? Signaling Effects of Gender and Firm Characteristics on Financing Entrepreneurial Ventures," Entrepreneurship Theory and Practice, , vol. 40(3), pages 489-514, May.
    6. Mansi Singh & Sanjay Dhir & Harsh Mishra, 2023. "Analysing the Antecedents of Entrepreneurial Bootstrapping and Bricolage: A Modified Total Interpretive Structural Modelling and MICMAC Approach," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 32(1), pages 7-38, March.
    7. Bradley, Samantha R. & Gicheva, Dora & Hassell, Lydia & Link, Albert N., 2013. "Gender Differences in Access to Private Investment Funding to Support the Development of New Technologies," UNCG Economics Working Papers 13-9, University of North Carolina at Greensboro, Department of Economics.
    8. Lars Löfqvist, 2017. "Product Innovation In Small Companies: Managing Resource Scarcity Through Financial Bootstrapping," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-27, February.
    9. Wang, Xu & Deng, Shengliang & Alon, Ilan, 2021. "Women executives and financing pecking order of GEM-listed companies: Moderating roles of social capital and regional institutional environment," Journal of Business Research, Elsevier, vol. 136(C), pages 466-478.
    10. Alvarado, Marco & Mora-Esquivel, Ronald, 2020. "Financial bootstrapping among Costa Rican small businesses: an exploratory study," TEC Empresarial, School of Business, Costa Rica Institute of Technology (ITCR), vol. 14(1), pages 2-11.
    11. Khanin, Dmitry & Turel, Ofir & Mahto, Raj V. & Liguori, Eric W., 2021. "Betting on the wrong horse: The antecedents and outcomes of entrepreneur’s opportunity regret," Journal of Business Research, Elsevier, vol. 135(C), pages 40-48.
    12. Mansi Singh & Sanjay Dhir & Harsh Mishra, 2024. "Synthesizing research in entrepreneurial bootstrapping and bricolage: a bibliometric mapping and TCCM analysis," Management Review Quarterly, Springer, vol. 74(1), pages 487-520, February.
    13. Maha Aly & Galal Galal-Edeen, 2021. "Why is Germany less entrepreneurial? A behavioral reasoning perspective," The Journal of Technology Transfer, Springer, vol. 46(5), pages 1376-1416, October.
    14. Mehmet Nasih TAĞ & Duygu HIDIROĞLU, 2020. "The Playing Field of Innovative Entrepreneurship: A Multilevel Analysis of Institutional Effects on Female Entrepreneurship," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(44).
    15. Charles Dwumfour Osei & Jincai Zhuang, 2020. "Rural Poverty Alleviation Strategies and Social Capital Link: The Mediation Role of Women Entrepreneurship and Social Innovation," SAGE Open, , vol. 10(2), pages 21582440209, May.
    16. Malmström, Malin & Voitkane, Aija & Johansson, Jeaneth & Wincent, Joakim, 2018. "When stereotypical gender notions see the light of day, will they burst? Venture capitalists' gender constructions versus venturing performance facts," Journal of Business Venturing Insights, Elsevier, vol. 9(C), pages 32-38.
    17. Sheela Pandey & Alejandro S. Amezcua, 2020. "Women’s business ownership and women’s entrepreneurship through the lens of U.S. federal policies," Small Business Economics, Springer, vol. 54(4), pages 1123-1152, April.
    18. Brush, Candida G. & Greene, Patricia G. & Welter, Friederike, 2020. "The Diana project: a legacy for research on gender in entrepreneurship," Working Papers 02/20, Institut für Mittelstandsforschung (IfM) Bonn.
    19. Tansel Yilmazer & Holly Schrank, 2010. "The Use of Owner Resources in Small and Family Owned Businesses: Literature Review and Future Research Directions," Journal of Family and Economic Issues, Springer, vol. 31(4), pages 399-413, December.
    20. Talia Pfefferman & Michal Frenkel & Sharon Gilad, 2022. "On Gendered Justification: A Framework for Understanding Men's and Women's Entrepreneurial Resource‐Acquisition," Journal of Management Studies, Wiley Blackwell, vol. 59(2), pages 249-283, March.
    21. Joern H. Block & Christian Fisch & Mirko Hirschmann, 2022. "The determinants of bootstrap financing in crises: evidence from entrepreneurial ventures in the COVID-19 pandemic," Small Business Economics, Springer, vol. 58(2), pages 867-885, February.
    22. Douglas A. Bosse & Tom Arnold, 2009. "Trade credit: a real option for bootstrapping small firms," Venture Capital, Taylor & Francis Journals, vol. 12(1), pages 49-63, September.
    23. Forrester, Juanita Kimiyo & Neville, François, 2021. "An institutional perspective on borrowing discouragement among female-owned enterprises and the role of regional female empowerment," Journal of Business Venturing, Elsevier, vol. 36(6).
    24. Brush, Candida G., 2008. "Pioneering strategies for entrepreneurial success," Business Horizons, Elsevier, vol. 51(1), pages 21-27.

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