How do entrepreneurial technology firms really get financed, and what difference does it make?

Kelvin W. Willoughby

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


This paper discusses an emerging heterodoxy in the academic literature on entre- preneurial technology finance that is based on the idea of "bootstrapping." Bootstrap finance is a third approach (emphasizing funding technology ventures through revenue and other non-traditional sources), alongside the orthodoxies of traditional business finance (emphasizing debt) and contemporary venture finance (emphasizing venture capital and public equity). The paper also reports the results of an original empirical study of entrepreneurial technology firms in the bioscience-related industries in the United States. The data from the study show that "unorthodox" bootstrap financing is actually the dominant kind of financing in those high technology industries. The data are analyzed to explore industry effects, regional milieux effects, and entrepreneurial-status effects on the relative mix of bootstrap finance and the three traditional sources of finance: venture capital, public equity and debt finance. The effects on firm behavior and performance of variations in financing strategy are explored, with implications for managers of entrepreneurial technology ventures and educators concerned with technology entrepreneurship.

Original languageEnglish
Pages (from-to)1-28
Number of pages28
JournalInternational Journal of Innovation and Technology Management
Issue number1
Publication statusPublished - Mar 2008
Externally publishedYes


  • Entrepreneurial technology
  • financial strategies
  • venture capital


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