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Financial Bootstrapping: a critical entrepreneurship skill

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  • 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

  • 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
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    Cited by:

    1. Maurice Nchabeleng & Olawale Fatoki & Olabanji Oni, 2018. "Owners' Characteristics and the Financial Bootstrapping Strategies Used by Rural Small Businesses in South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 10(4), pages 277-286.
    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. Ik MUO & Moruff Sanjo OLADIMEJI & O. I. OKUNBADEJO, 2020. "Financial Bootstrapping and Small Business Growth in Lagos Metropolis, Nigeria," Business & Management Compass, University of Economics Varna, issue 2, pages 198-213.

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    More about this item

    Keywords

    Entrepreneurship; Financial bootstrapping; Small firm financing.;
    All these keywords.

    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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