A Comparison of New Firm Financing by Gender: Evidence from the Kauffman Firm Survey Data

This study uses data from the new Kauffman Firm Survey to explore gender differences in the use of start-up capital and subsequent financial injections by new firms. We find that, consistent with previous studies, women start their businesses with significantly lower levels of financial capital than...

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Bibliographic Details
Published in:Small business economics 2009-12, Vol.33 (4), p.397-411
Main Authors: Coleman, Susan, Robb, Alicia
Format: Article
Language:English
Subjects:
Bank loans
Business and Management
Business strategies
Business structures
Capital investments
Debt
Economic growth
Employees
Employment
Enterprises
Entrepreneurship
Equity
Equity capital
Financial investments
Financing
Financing methods
GDP
Gender differences
Gender differentiation
Gross Domestic Product
Growth rate
Industrial Organization
Inequality
Investment
Management
Men
Microeconomics
Personal debt
Small business
Start up firms
Startups
Studies
Survey data
Venture capital
Women owned businesses
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Summary:This study uses data from the new Kauffman Firm Survey to explore gender differences in the use of start-up capital and subsequent financial injections by new firms. We find that, consistent with previous studies, women start their businesses with significantly lower levels of financial capital than men. A new finding from this research is that women go on to raise significantly lower amounts of incremental debt and equity in years two and three. These results hold even controlling for a variety of firm and owner characteristics, including the level of initial start-up capital and firm sales. Our findings also reveal that women rely heavily on personal rather than external sources of debt and equity for both start-up capital as well as follow-on investments. Our findings have implications for further research into gender differences in financing sources and strategies and business outcomes.
ISSN:0921-898X
1573-0913
DOI:10.1007/s11187-009-9205-7