Who Funds Technology-Based Small Firms? Evidence from Belgium

Ant Bozkaya () and Bruno van Pottelsberghe de la Potterie

No 04-027.RS, Working Papers CEB from Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB)

Abstract: Using an original survey sample of 103 unquoted Belgian technology-based small firms (TBSFs), we examine the capital structure of start-up companies during their consecutive development stages. We find that internal funds, either alone as personal savings or in combination with family and friends, to be the primary source of financing. Personal funds of the founders are used to finance the start of 82 percent of TBSFs. Commercial bank and government funds are the most important sources of external finance for TBSFs subsequent to start-up. Most founders agreed that business angels and venture capitalists play a greater role at later stages. However, once granted, more substantial amounts of funding come from venture capitalists. There is also evidence that suggests an evolution in the mix of internal and external sources of finance. Finally, our findings based on founders’ scores in raising external funds suggest a call for urgent policy action to improve access to and availability of early-stage entrepreneurial finance in Belgium. We discuss our findings in light of the capital structure of small firms relating to TBSFs.

Keywords: capital and ownership structure; entrepreneurial finance; technology-based firms; seed capital; survey. (search for similar items in EconPapers)
JEL-codes: G32 M13 M21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-fin, nep-fmk and nep-ino
Date: 2004-09
View list of references View citations in EconPapers

Downloads: (external link)
http://www.solvay.edu/EN/Research/Bernheim/documents/wp04027.pdf First version, 2004 (application/pdf)

Related works:
Journal Article: WHO FUNDS TECHNOLOGY-BASED SMALL FIRMS? EVIDENCE FROM BELGIUM (2008)
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: http://EconPapers.repec.org/RePEc:sol:wpaper:04-027

Access Statistics for this paper

More papers in Working Papers CEB from Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB)
Contact information at EDIRC.
Series data maintained by CEB ().