Funding the growth of UK technology-based small firms since the financial crash: are there breakages in the finance escalator?

David North, Robert Baldock and Farid Ullah

Venture Capital, 2013, vol. 15, issue 3, 237-260

Abstract: This paper presents recent research assessing the impact of the financial crisis on young and established technology-based small firms (TBSFs) and considers whether their ability to contribute to economic growth is being affected by ongoing problems in obtaining external finance. It reports on original findings from a survey of 100 TBSFs undertaken in late 2010 as well as 20 in-depth interviews with a range of finance providers. The surviving TBSFs exhibited considerable demand for external finance since 2007, particularly for working capital and early stage R&D, sought mainly from banks, but also with younger TBSFs seeking business angel finance and innovation grants and more mature TBSFs seeking venture capital finance. However, both debt and equity finance have become harder to access for TBSFs, particularly for early stage funding and for more R&D intensive firms, hampering their growth potential. Where external finance has been available, the terms and conditions set by providers were often unacceptable to business owners. The paper concludes that the smooth operation of the finance escalator has proved difficult to achieve under recent financial conditions and identifies a number of breakpoints relating to TBSFs which government policy needs to address.

Date: 2013
References: View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Downloads: (external link)
http://hdl.handle.net/10.1080/13691066.2013.804755 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:veecee:v:15:y:2013:i:3:p:237-260

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TVEC20

DOI: 10.1080/13691066.2013.804755

Access Statistics for this article

Venture Capital is currently edited by Colin Mason and Richard T. Harrison

More articles in Venture Capital from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().