Bootstrapping and New-Born Startups Performance: The Role of Founding Team Human Capital

This study examines the influences of bootstrapping approach on new-born startup performance by investigating the interactive effects of founding team human capital.The sample includes new-born startups at 3 years of age, an initial stage of business development.Data was collected from the longitudinal panel data from Kauffman Firm Survey conducted by the Ewing Marion Kauffman Foundation over the period of 2005-2007.Results indicate that bootstrapping approach is negatively related to a new-born startup's profitability and revenue growth.Types of founding team human capital has various moderating impacts on startup performance.Startup teams' industry experiences and startup experiences have significant growth constrains on bootstrapping startup firms; while teams' education and entrepreneurial expertise facilitate bootstrapping startups to achieve positive revenue growth.