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TABLE 3
Importance of factors contributing to entrepreneurial growth

Financing Strategies of High-Growth and Low-Growth Entrepreneurs

Table 4 illustrates the financing strategies used by high-growth and low-growth entrepreneurs to start and to expand the business.  Significant differences were found in the following sources:  family, friends, and relatives were more likely to be used by high-growth entrepreneurs at start-up (chi-square=6.60, p<.01), although there were no differences in the utilization of this source at expansion.  The Small Business Administration Loan Program was more  significantly  more  likely  to  be  a  source  for high-growth entrepreneurs at both start-up (chi-square=6.04, p<.01) and expansion (chi-square=6.05, p<.01).  In fact, high-growth entrepreneurs were 7 times more likely to use SBA than low-growth entrepreneurs.  High-growth entrepreneurs were 4 time more likely to use commercial finance companies at expansion (chi-square=10.76, p<.01).  Personal savings were more likely to be used at start-up by high-growth entrepreneurs (chi-square=5.20, p<.05), and leasing companies were more likely to be used by this group and both start-up (chi-square=12.79, p<.001) and expansion (chi-square=16.94, p<.001).

No differences were found between the groups on the use of commercial banks, Illinois Development Finance Authority loan program, Department of Commerce 7 Community Affairs loan program, private equity investors (angel financing), venture capital firms, local/municipal revolving loan programs, or the Women's Finance Initiative (a state-based program).  Hypothesis 5 is partially supported.

DISCUSSION AND CONCLUSIONS

The growth-oriented entrepreneurs in this study clearly differentiated themselves from the low-growth business owners.  Their entrepreneurial and organizational characteristics suggest that this group has less experience in the industry in which their firm operates, and fewer years of overall business experience.  Although the average years of experience (14) was substantial, the "ambitious" entrepreneurs tended to plan for growth earlier in the life of their business than did the others.  These entrepreneurs also tended to have held equity in more firms than the low-growth entrepreneurs.  Employment projections disclosed in this study are interesting.  The high-growth entrepreneurs project employment to reach double or more the level of their low-growth counterparts.  This corroborates Davidsson's (1991) finding that high-growth entrepreneurs favor employment growth, and establishes the association between growth willingness and organization size that Kolveried (1991) was unable to determine.  More research is needed to determine whether such increases in employment are actually observed over time (i.e., whether growth intention is actually demonstrated in the direction predicted).  High-growth entrepreneurs also aspire to reach ideal sales of more than $1.2 million higher than the other firms.  Perhaps they feel more confident because they are surrounded by a larger number of (more competent?) employees.

These entrepreneurs also tend to have a more structured organization, suggesting a more disciplined approach to management.  Although both groups utilized functional structures (as is common in smaller organizations), the "ambitious" entrepreneurs were more likely to use team-based structures, which can better position their firms to respond rapidly to changes in the external environment.  Nearly one-half of the low-growth entrepreneurs selected no design at all, suggesting that these business owners, and possibly their employees as well, may be called on to perform "hat tricks" in carrying out a wide variety of unassigned tasks with little coordination among them.  While this highly informal approach to organization design is likely to be found in fledgling firms in the early stages of business birth, it is ineffective for larger firms engaged in expansion.
 
It was proposed that high-growth entrepreneurs exhibit greater intensity to business ownership, and would be willing to incur greater opportunity costs.  Tests confirmed that these two dimensions in fact did discriminate entrepreneurs based on growth intention.  Ambitious entrepreneurs were more committed to doing whatever it takes to establish their businesses, and to make the necessary sacrifices to insure that success of that business.  However, neither group perceived owning their business was more important than spending time with their families.  This finding is intriguing, and may be attributable to the sample, in this case, women entrepreneurs. Previous research has suggested that women business owners often found their businesses to better balance (or control) their time spent on work and family (Starr & Yudkin, 1996, and others).  While we might expect high-growth oriented entrepreneurs to desire to eventually harvest their businesses, this study did not show such a goal.  Perhaps the psychological investment in and commitment to the business demonstrated by these women entrepreneurs precludes their intention to depart the business in the foreseeable future.

Several questions are raised by this study.  The first is the aspiration level of the entrepreneur himself.  Is the high-growth entrepreneur inherently driven to seek higher levels of attainment or does this come about as a result of previous successes?  Also, the cross-sectional nature of the study has caught entrepreneurs in various stages of their life-cycle.  It is possible in future research to control the stage of respondents and investigate the relationship to growth intention.  Finally, we have identified "ambitious" entrepreneurs relative to each other (i.e., within a sample of 832).  Are other definitions possible, such as those companies that seek venture capital?  Focusing on this latter group, however, may inhibit the rich implications found for entrepreneurs who are seeking to "make it on their own."  This research has attempted to highlight some of the differences that exist between "ambitious" and other entrepreneurs.  Uncovering these relationships allows researchers to more clearly discern the influence of growth intention in the entrepreneurial process, and to observe the underlying strategies selected by entrepreneurs that enable business growth and organizational change.
 

TABLE 4
Financing sources used by high-growth and low-growth entrepreneurs

 
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