How does debt financing influence a Start-up's ability to raise equity financing?
This study aims to investigate the impact of debt financing on a start-up's capacity to attract equity investment later. Analyzing a comprehensive dataset of 43,013 start- ups, the research examines debt's dual role as a signal of financial stability, and as a deterrent due to financial di...
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| Tipo de recurso: | tesis de maestría |
| Fecha de publicación: | 2024 |
| País: | España |
| Institución: | Universitat Politècnica de Catalunya (UPC) |
| Repositorio: | UPCommons. Portal del coneixement obert de la UPC |
| Idioma: | inglés |
| OAI Identifier: | oai:upcommons.upc.edu:2117/420194 |
| Acceso en línea: | https://hdl.handle.net/2117/420194 |
| Access Level: | acceso abierto |
| Palabra clave: | New business enterprises Entrepreneurship Empreses--Creació Emprenedoria Àrees temàtiques de la UPC::Economia i organització d'empreses |
| Sumario: | This study aims to investigate the impact of debt financing on a start-up's capacity to attract equity investment later. Analyzing a comprehensive dataset of 43,013 start- ups, the research examines debt's dual role as a signal of financial stability, and as a deterrent due to financial distress risks. Employing three regression models to control for various factors, the findings reveal that previous debt significantly deters equity investment, supporting the debt overhang theory. These results are consistent across different models, underscoring the importance of understanding debt dynamics in start-up funding strategies. This research contributes to the literature by providing detailed empirical evidence on the interplay between debt and equity financing in start-ups, offering valuable insights for entrepreneurs and investors. |
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