The role of R&D in entrepreneurial finance and performance

Alicia Robb, Robert Seamans

Research output: Contribution to journalArticlepeer-review


We extend theories of the firm to the entrepreneurial finance setting and argue that R&D-focused start-up firms will have a greater likelihood of financing themselves with equity rather than debt. We argue that mechanisms which reduce information asymmetry, including owner work experience and financier reputation, will increase the probability of funding with more debt. We also argue that start-ups that correctly align their financing mix to their R&D focus will perform better than firms that are misaligned. We study these ideas using a large nationally representative dataset on start-up firms in the United States.

Original languageEnglish (US)
Pages (from-to)341-373
Number of pages33
JournalAdvances in Strategic Management
StatePublished - 2014


  • Entrepreneurial finance
  • Entrepreneurship
  • Firm performance
  • Information asymmetry
  • Research and development
  • Transaction cost economics

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management


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