Analysis of the capital structure of startups in light of the tradeoff and pecking order theories
Autor(a) principal: | |
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Data de Publicação: | 2023 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng por spa |
Título da fonte: | Revista de Empreendedorismo e Gestão de Pequenas Empresas - REGEPE |
Texto Completo: | https://www.regepe.org.br/regepe/article/view/2338 |
Resumo: | Purpose: Startups have significant differences compared to other companies. They have many intangible assets (e.g., team tenure and experience of founders), are risky, and tend not to generate profits in their initial years (Heirman & Clarysse, 2007; Weber & Zulehner, 2009). Does the startups’ financing choice also differ from that of traditional companies? We analyzed the capital structure of startups in their first years of life based on the classic tradeoff and pecking order theories. Methodology/approach: We collected data on 40 startups in the city of Ribeirão Preto, São Paulo, Brazil, through a questionnaire on the profiles of the founders, company characteristics, bottom-line performance and financing sources. The data collected covered the year of founding and the three subsequent years. Findings: The results indicated that these startups mainly financed themselves through the founders’ capital in all four years covered. Only in the third year did they start using resources generated internally, indicating pecking order adherence. However, the presence of angel investors and government subsidies contrasted with the absence of bank debt. In line with the tradeoff theory, bank debt was not a viable financing option in the early years of these firms since they had low profitability and high risk. Theoretical/methodological contributions: We offer a theoretical contribution by analyzing the adequacy of traditional financial theories in the specific context of startups. Originality: The finance literature about startups is scarce, and few studies have analyzed these companies from the capital structure theoretical perspective. Social contributions / for management: We provide a panorama of the financing of startups to support their financial planning regarding fundraising. |
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Analysis of the capital structure of startups in light of the tradeoff and pecking order theoriesAnálisis de la estructura de capital de las startups a la luz de las teorías de tradeoff e pecking orderAnálise da estrutura de capital de startups à luz das teorias de tradeoff e pecking orderStartupTradeoffPecking OrderFundraisingStartupTradeoffPecking OrderFinanciamientoStartupTradeoffPecking OrderFinanciamentoPurpose: Startups have significant differences compared to other companies. They have many intangible assets (e.g., team tenure and experience of founders), are risky, and tend not to generate profits in their initial years (Heirman & Clarysse, 2007; Weber & Zulehner, 2009). Does the startups’ financing choice also differ from that of traditional companies? We analyzed the capital structure of startups in their first years of life based on the classic tradeoff and pecking order theories. Methodology/approach: We collected data on 40 startups in the city of Ribeirão Preto, São Paulo, Brazil, through a questionnaire on the profiles of the founders, company characteristics, bottom-line performance and financing sources. The data collected covered the year of founding and the three subsequent years. Findings: The results indicated that these startups mainly financed themselves through the founders’ capital in all four years covered. Only in the third year did they start using resources generated internally, indicating pecking order adherence. However, the presence of angel investors and government subsidies contrasted with the absence of bank debt. In line with the tradeoff theory, bank debt was not a viable financing option in the early years of these firms since they had low profitability and high risk. Theoretical/methodological contributions: We offer a theoretical contribution by analyzing the adequacy of traditional financial theories in the specific context of startups. Originality: The finance literature about startups is scarce, and few studies have analyzed these companies from the capital structure theoretical perspective. Social contributions / for management: We provide a panorama of the financing of startups to support their financial planning regarding fundraising.Objetivo: Las startups tienen diferencias significativas con las organizaciones tradicionales. Tienen muchos activos intangibles, son riesgosos y tienden a no generar ganancias en sus primeros años (Heirman & Clarysse, 2007; Weber & Zulehner, 2009). ¿La elección de financiación de las startups también sería diferente de las empresas tradicionales? Nuestro objetivo es analizar la estructura de capital de las startups en sus primeros años de vida en función de las teorías clásicas de tradeoff e pecking order. Metodología/enfoque: Recolectamos datos de 40 startups en la ciudad de Ribeirão Preto, São Paulo, Brasil, a través de un cuestionario sobre el perfil de los fundadores, características de las empresas, su desempeño final y fuentes de financiamiento. Los datos recogidos abarcaron el año de fundación y los tres años posteriores. Resultados: Los resultados indicaron que estas nuevas empresas se financiaron principalmente a través del capital de los fundadores en los cuatro años cubiertos. Solo en el tercer año comenzaron a utilizar recursos generados internamente, lo que indica adherencia al pecking order. Sin embargo, la presencia de ángeles inversionistas y recursos subsidiados contrastó con la ausencia de deuda bancaria. De acuerdo con la teoría del trade-off, la deuda bancaria no era una opción de financiación viable en los primeros años de estas empresas debido a su baja rentabilidad y alto riesgo. Aportaciones teóricas/metodológicas: Ofrecemos una aportación teórica analizando la adecuación de las teorías financieras tradicionales al contexto específico de las startups. Originalidad: La literatura financiera sobre startups es escasa y pocos estudios han analizado estas empresas desde la perspectiva de las teorías de estructura de capital. Contribuciones sociales / de gestión: brindamos una descripción general de la financiación inicial para respaldar su planificación financiera con respecto a la recaudación de fondos.Objetivo: As startups apresentam diferenças significativas em relação às organizações tradicionais. Elas têm muitos ativos intangíveis, são arriscadas e tendem a não gerar lucros em seus anos iniciais (Heirman & Clarysse, 2007; Weber & Zulehner, 2009). A escolha de financiamento das startups também seria diferente das empresas tradicionais? Nosso objetivo é analisar a estrutura de capital de startups em seus primeiros anos de vida com base nas teorias clássicas de tradeoff e pecking order. Metodologia/abordagem: Coletamos dados de 40 startups na cidade de Ribeirão Preto, São Paulo, Brasil, por meio de um questionário sobre o perfil dos fundadores, características das empresas, desempenho financeiro e fontes de financiamento. Os dados coletados abrangeram o ano de fundação da empresa e os três anos subsequentes. Resultados: Os resultados indicaram que as startups analisadas se financiaram principalmente por meio de capital dos fundadores em todos os quatro anos analisados. Somente no terceiro ano elas passaram a utilizar os recursos gerados internamente, indicando uma adesão à pecking order. No entanto, a presença de investidores-anjo e recursos subsidiados contrastou com a ausência de dívida bancária. Em consonância com a teoria do tradeoff, a dívida bancária não era uma opção viável de financiamento nos primeiros anos dessas empresas por apresentarem baixa rentabilidade e alto risco. Contribuições teóricas/metodológicas: Oferecemos uma contribuição teórica analisando a adequação das teorias financeiras tradicionais ao contexto específico das startups. Originalidade: A literatura de finanças sobre startup é escassa e poucos estudos analisaram essas empresas sob a ótica das teorias de estrutura de capital. Contribuições sociais / para gestão: Fornecemos um panorama do financiamento de startups para apoiar seu planejamento financeiro no que tange à obtenção de recursos.ANEGEPE - Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas2023-10-26info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdftext/htmltext/htmltext/htmltext/htmlhttps://www.regepe.org.br/regepe/article/view/233810.14211/regepe.esbj.e2338REGEPE Entrepreneurship and Small Business Journal; Vol. 12 No. 3 (2023): Sept-Dez. (Continuous Publication); e2338REGEPE Entrepreneurship and Small Business Journal; Vol. 12 Núm. 3 (2023): sept.-dic. (Publicación Continua); e2338REGEPE Entrepreneurship and Small Business Journal; v. 12 n. 3 (2023): set.-dez. (Publicação Contínua); e23382965-1506reponame:Revista de Empreendedorismo e Gestão de Pequenas Empresas - REGEPEinstname:Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas (ANEGEPE)instacron:ANEGEPEengporspahttps://www.regepe.org.br/regepe/article/view/2338/826https://www.regepe.org.br/regepe/article/view/2338/875https://www.regepe.org.br/regepe/article/view/2338/876https://www.regepe.org.br/regepe/article/view/2338/822https://www.regepe.org.br/regepe/article/view/2338/823https://www.regepe.org.br/regepe/article/view/2338/824https://www.regepe.org.br/regepe/article/view/2338/825Copyright (c) 2023 Gabriela de Carvalho Colombo, Matheus da Costa Gomes, João Paulo Augusto Eça, Maurício Ribeiro do Valle https://creativecommons.org/licenses/by/4.0info:eu-repo/semantics/openAccessColombo, Gabriela de CarvalhoGomes, Matheus da CostaEça, João Paulo Augusto Valle , Maurício Ribeiro do2024-01-26T21:19:16Zoai:ojs.regepe.org.br:article/2338Revistahttps://www.regepe.org.br/regepe/indexPRIhttps://www.regepe.org.br/regepe/oaieditorialregep@gmail.com2316-20582316-2058opendoar:2024-01-26T21:19:16Revista de Empreendedorismo e Gestão de Pequenas Empresas - REGEPE - Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas (ANEGEPE)false |
dc.title.none.fl_str_mv |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories Análisis de la estructura de capital de las startups a la luz de las teorías de tradeoff e pecking order Análise da estrutura de capital de startups à luz das teorias de tradeoff e pecking order |
title |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories |
spellingShingle |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories Colombo, Gabriela de Carvalho Startup Tradeoff Pecking Order Fundraising Startup Tradeoff Pecking Order Financiamiento Startup Tradeoff Pecking Order Financiamento |
title_short |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories |
title_full |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories |
title_fullStr |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories |
title_full_unstemmed |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories |
title_sort |
Analysis of the capital structure of startups in light of the tradeoff and pecking order theories |
author |
Colombo, Gabriela de Carvalho |
author_facet |
Colombo, Gabriela de Carvalho Gomes, Matheus da Costa Eça, João Paulo Augusto Valle , Maurício Ribeiro do |
author_role |
author |
author2 |
Gomes, Matheus da Costa Eça, João Paulo Augusto Valle , Maurício Ribeiro do |
author2_role |
author author author |
dc.contributor.author.fl_str_mv |
Colombo, Gabriela de Carvalho Gomes, Matheus da Costa Eça, João Paulo Augusto Valle , Maurício Ribeiro do |
dc.subject.por.fl_str_mv |
Startup Tradeoff Pecking Order Fundraising Startup Tradeoff Pecking Order Financiamiento Startup Tradeoff Pecking Order Financiamento |
topic |
Startup Tradeoff Pecking Order Fundraising Startup Tradeoff Pecking Order Financiamiento Startup Tradeoff Pecking Order Financiamento |
description |
Purpose: Startups have significant differences compared to other companies. They have many intangible assets (e.g., team tenure and experience of founders), are risky, and tend not to generate profits in their initial years (Heirman & Clarysse, 2007; Weber & Zulehner, 2009). Does the startups’ financing choice also differ from that of traditional companies? We analyzed the capital structure of startups in their first years of life based on the classic tradeoff and pecking order theories. Methodology/approach: We collected data on 40 startups in the city of Ribeirão Preto, São Paulo, Brazil, through a questionnaire on the profiles of the founders, company characteristics, bottom-line performance and financing sources. The data collected covered the year of founding and the three subsequent years. Findings: The results indicated that these startups mainly financed themselves through the founders’ capital in all four years covered. Only in the third year did they start using resources generated internally, indicating pecking order adherence. However, the presence of angel investors and government subsidies contrasted with the absence of bank debt. In line with the tradeoff theory, bank debt was not a viable financing option in the early years of these firms since they had low profitability and high risk. Theoretical/methodological contributions: We offer a theoretical contribution by analyzing the adequacy of traditional financial theories in the specific context of startups. Originality: The finance literature about startups is scarce, and few studies have analyzed these companies from the capital structure theoretical perspective. Social contributions / for management: We provide a panorama of the financing of startups to support their financial planning regarding fundraising. |
publishDate |
2023 |
dc.date.none.fl_str_mv |
2023-10-26 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
https://www.regepe.org.br/regepe/article/view/2338 10.14211/regepe.esbj.e2338 |
url |
https://www.regepe.org.br/regepe/article/view/2338 |
identifier_str_mv |
10.14211/regepe.esbj.e2338 |
dc.language.iso.fl_str_mv |
eng por spa |
language |
eng por spa |
dc.relation.none.fl_str_mv |
https://www.regepe.org.br/regepe/article/view/2338/826 https://www.regepe.org.br/regepe/article/view/2338/875 https://www.regepe.org.br/regepe/article/view/2338/876 https://www.regepe.org.br/regepe/article/view/2338/822 https://www.regepe.org.br/regepe/article/view/2338/823 https://www.regepe.org.br/regepe/article/view/2338/824 https://www.regepe.org.br/regepe/article/view/2338/825 |
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https://creativecommons.org/licenses/by/4.0 info:eu-repo/semantics/openAccess |
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https://creativecommons.org/licenses/by/4.0 |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf text/html text/html text/html text/html |
dc.publisher.none.fl_str_mv |
ANEGEPE - Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas |
publisher.none.fl_str_mv |
ANEGEPE - Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas |
dc.source.none.fl_str_mv |
REGEPE Entrepreneurship and Small Business Journal; Vol. 12 No. 3 (2023): Sept-Dez. (Continuous Publication); e2338 REGEPE Entrepreneurship and Small Business Journal; Vol. 12 Núm. 3 (2023): sept.-dic. (Publicación Continua); e2338 REGEPE Entrepreneurship and Small Business Journal; v. 12 n. 3 (2023): set.-dez. (Publicação Contínua); e2338 2965-1506 reponame:Revista de Empreendedorismo e Gestão de Pequenas Empresas - REGEPE instname:Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas (ANEGEPE) instacron:ANEGEPE |
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Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas (ANEGEPE) |
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ANEGEPE |
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ANEGEPE |
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Revista de Empreendedorismo e Gestão de Pequenas Empresas - REGEPE |
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Revista de Empreendedorismo e Gestão de Pequenas Empresas - REGEPE |
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Revista de Empreendedorismo e Gestão de Pequenas Empresas - REGEPE - Associação Nacional de Estudos em Empreendedorismo e Gestão de Pequenas Empresas (ANEGEPE) |
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editorialregep@gmail.com |
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1801484735683231744 |