Nascent Entrepreneurs, Innovation and Financing Constraints

David Audretsch (), Werner Bönte () and Prashanth Mahagaonkar

No 07-09, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: Innovative nascent entrepreneurs face the problem of obtaining finance, mainly due to information problems. We use new data on capital seeking start-ups allowing distinction between planning stage and early stage. Being innovative does not affect the probability of having external finance in the planning stage but has a positive effect in the early stage. Early start-ups with patents have a significantly higher probability of having equity whereas debt is not affected. Patents, coupled with prototypes have a higher probability for external finance which may be due to reduced uncertainties and learning. The most important determinant of debt is house ownership.

Keywords: Innovation; Entrepreneurship; Finance; Information Asymmetries (search for similar items in EconPapers)
JEL-codes: G32 M13 O32 O47 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-ino, nep-knm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:aal:abbswp:07-09

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