TY - JOUR
T1 - Entrepreneurial financing in new business ventures
T2 - a help-seeking behavior perspective
AU - Au, Kevin
AU - Chiang, Flora F.T.
AU - Birtch, Thomas A.
AU - Kwan, Ho Kwong
N1 - Funding Information:
This study was supported by a research grant awarded to the first author by the Hong Kong RGC (CUHK 440008).
PY - 2016/3/1
Y1 - 2016/3/1
N2 - How and from whom prospective entrepreneurs seek their start-up capital for new venture formation represent fundamental questions in entrepreneurial financing. Drawing on research of help-seeking behavior, we propose that apart from economic rationale entrepreneurs’ decisions to seek financing may be influenced by socio-psychological factors. Using a scenario experiment (venture risk x relational proximity) to investigate how prospective entrepreneurs considered funding from family and outsiders, it was found that they tended to seek family financing when the family was close and the risk was high, and inclined to seek outsider funding when the venture risk was high and the family was not close. The findings might seem paradoxical but they actually underscore the influence of socio-psychological factors in entrepreneurial financing decisions and offer novel contributions to the entrepreneurship, informal investment, and education literatures.
AB - How and from whom prospective entrepreneurs seek their start-up capital for new venture formation represent fundamental questions in entrepreneurial financing. Drawing on research of help-seeking behavior, we propose that apart from economic rationale entrepreneurs’ decisions to seek financing may be influenced by socio-psychological factors. Using a scenario experiment (venture risk x relational proximity) to investigate how prospective entrepreneurs considered funding from family and outsiders, it was found that they tended to seek family financing when the family was close and the risk was high, and inclined to seek outsider funding when the venture risk was high and the family was not close. The findings might seem paradoxical but they actually underscore the influence of socio-psychological factors in entrepreneurial financing decisions and offer novel contributions to the entrepreneurship, informal investment, and education literatures.
KW - Entrepreneurial financing
KW - Entrepreneurship education
KW - Help-seeking behavior
KW - Informal investment
KW - Relational proximity
KW - Venture risk
UR - http://www.scopus.com/inward/record.url?scp=84956895418&partnerID=8YFLogxK
U2 - 10.1007/s11365-014-0332-5
DO - 10.1007/s11365-014-0332-5
M3 - Journal article
AN - SCOPUS:84956895418
SN - 1554-7191
VL - 12
SP - 199
EP - 213
JO - International Entrepreneurship and Management Journal
JF - International Entrepreneurship and Management Journal
IS - 1
ER -
