Bootstrapping Techniques and New Venture Emergence

Authors

John T. Perry, Wichita State UniversityFollow
Gaylen N. Chandler, Wichita State UniversityFollow
Xin Yao, University of ColoradoFollow
James Wolff, Wichita State UniversityFollow

Issue Season

Spring

Document Type

Research Article

Abstract

Among nascent entrepreneurial ventures, are some types of bootstrapping techniques more successful than others? We compare externally oriented and internally oriented techniques with respect to the likelihood of becoming an operational venture; and we compare cash-increasing and cost-decreasing techniques with respect to becoming operational. Using data from the first Panel Study of Entrepreneurial Dynamics, we find evidence suggesting that when bootstrapping a new venture, the percentage of cash-increasing and cost-decreasing externally oriented bootstrapping techniques that a venture’s owners use are positive predictors of subsequent positive cash flow (one and two years later). But, internally oriented techniques are not related to subsequent cash flow.

Recommended Citation

Perry, John T.; Chandler, Gaylen N.; Yao, Xin; and Wolff, James (2011) "Bootstrapping Techniques and New Venture Emergence," New England Journal of Entrepreneurship: Vol. 14: No. 1, Article 5.
Available at: https://digitalcommons.sacredheart.edu/neje/vol14/iss1/5