Abstract:

This study was carried out to empirically test the impact of financial structure on nascent enterprise performance. The study used a centralistic nomothetic longitudinal methodology to examine a panel data derived from the first four years of the Kauffman firm Survey (KFS). The result revealed that financial structure (equity financing, debt financing, and trade-financing) influenced nascent enterprise performance, but inconsistently over the first four years of business existence. The average capital structure of the sample was supported by the literature and followed the pecking order of equity, debt, and trade financing. Results suggested that capital structure has an important ramification for nascent enterprise performance, but the capital mix of successful nascent enterprises do not necessarily follow an orthodox format.