Entrepreneurial firms and financial attractiveness for securing debt capital: a Bayesian analysis

摘要

Using theoretical arguments grounded in venture financing literature and signaling theory, we examine the impact of both intended and unintended signals on the venture's financial attractiveness perceived by external lenders. We develop two concepts, the venture's (i) emergent volatility associated with operations and (ii) deliberate diversity of its financing portfolio, and assess their signaling impact on the firm's overall financial attractiveness for securing debt. Using Bayesian inference on a large sample of growth-oriented entrepreneurial ventures in the United States, we obtain results that explain the ways in which emergent volatility and deliberate diversity act as unintended versus intended signals, respectively, thus affecting the venture's financial attractiveness for securing debt capital from external lenders.