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The funding decision by high-tech start-up firms: A multi-case study of Sweden
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2019 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

This paper examines how small high-tech start-ups in Sweden source their funding and aims to understand the underlying factors affecting these firms financing behaviour, contributing to the relatively limited field of research conducted in Europe. To fulfil the purpose of the study, a multiple case study method was implemented as the study’s research design. A literature review generated in a theoretical framework consisting of capital structure and specifically the pecking order theory. Together with our empirics, consisting of data from interviews with six different companies, the theoretical framework composed the basis for our analysis. The data from our sample displays that these firms initially source their funding through internal funds, suggesting that small high-tech start-up firms in Sweden rely heavily on their own saved funds or other personal resources available to them at the start-up face. Our findings suggests that these firms are limited in their financial options but also that independency and control is to be seen as factors to initially be funded through internal funds. Inconsistent with the pecking order theory, evidence in this paper finds that when looking for external funds, equity is the funding source rather than debt. Two conclusions can be drawn from this. First, the high-tech start-up firms seem to value the advisory of equity investor. Second, capital imperfections makes it hard to access debt. Furthermore, we find that majority of the case companies does not implement a capital structure policy since it seems to limited their financial options.

Place, publisher, year, edition, pages
2019. , p. 61
Keywords [en]
Small high-tech start-ups, internal funds, debt, equity, capital structure, pecking order theory, Sweden
National Category
Business Administration
Identifiers
URN: urn:nbn:se:uu:diva-388066OAI: oai:DiVA.org:uu-388066DiVA, id: diva2:1332864
Educational program
Freestanding course
Supervisors
Examiners
Available from: 2019-07-02 Created: 2019-06-28 Last updated: 2019-07-02Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • ieee
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  • Other locale
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Output format
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