Financing Strategies of New Technology-Based Firms: A Comparison of Women-and Men-Owned Firms

In this article we used data from the Kauffman Firm Survey to compare the financing strategies of women-and men-owned new technology-based firms. Our findings reveal that women raised dramatically less financial capital than men in the startup year and in the subsequent four years of operation. We also found that women used a significantly higher level of external debt and a significantly lower level of external equity during the startup year. Although our findings do not allow us to definitively rule out the possibility of discrimination, particularly in the market for external equity, our results indicate that women may have different motivations and expectations for their firms. These, in turn, may determine some of their financing choices.