Statistical Databases for Research on the Financing of Small and Start-Up Firms in the United States: An Update and Review

Charles Ou ()
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Charles Ou: The US Small Business Administration

Chapter Chapter 12 in Advances in Entrepreneurial Finance, 2011, pp 219-250 from Springer

Abstract: Abstract Academic and policy makers’ interest in start-up business financing originated from two areas of concern – capital requirements for a start-up and the availability of external sources of private financing for a start-up. The former is important because underestimation of capital requirements has been mentioned by most small business management professional as one of the most critical deficiencies in start-up planning affecting the prospect for success or survival of a start-up (Studies on “new firm creation” using the Panel Study Entrepreneur Dynamics (PSED) data concluded that majority of nascent entrepreneurial start-ups failed to become operational businesses (Reynolds 2007).) Many nascent entrepreneurs have lost their lifetime savings in starting a business by being overly optimistic about the time and the resources it takes to develop and operate a viable business. The amount of capital required relative to the availability of internal resources will determine the need for external sources of capital. (Internal resources include monetary resources such as personal savings, other income (from the spouse as well), personal credit lines, as well non-monetary resources such as an office/work place at home, office equipment and telecommunication facilities, and personal transportation.) Unavailability of external sources of financing from private capital markets has been blamed for the high failure rate among start-ups. This chapter updates information about the databases available for researchers in conducting financial research on small and startup firms. Three major databases on startup financing are discussed in detail, including comments on the strengths and weaknesses of each of the three major databases regarding their uses for conducting different types of research. It is followed by a review of major data sources for small firm financing, including time-series information, on activities in specific financing markets for small firms.

Keywords: Small Business; Small Firm; Venture Capital; Federal Reserve; Nascent Entrepreneur (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1007/978-1-4419-7527-0_12

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