Venture and entrepreneur's characteristics as signals of new ventures' access to bank finance: a systemic csQCA approach

Research on entrepreneurial finance suggests new ventures often rely on signals to demonstrate venture quality and thus access bank finance. Previous works mostly examined individual signals in isolation. Moreover, researchers devoted limited attention to how the effectiveness of venture quality signals vary depending on the sender. This study explores how new venture’s access to finance depends on signals of venture quality, including innovation and performance, and on the characteristics of the entrepreneur as the signaller (i.e., gender, age, ethnicity, geography). Using crisp set Qualitative Comparative Analysis (csQCA) based on a sample of 325 new ventures, our results show that success in bank financing requires multiple signals to work together as a system. Our findings also uncover that young and ethnic minority entrepreneurs tend to be disadvantaged in the process of obtaining bank finance, whereas this is not the case for female entrepreneurs or for entrepreneurs located in non-core regions.