What are the key determinants of capital structure of small ventures? We empirically examined the question by analyzing capital structure decisions of 903 small ventures. Six categories of predictors were included in the analysis: goal orientation of the entrepreneur, business outlook for the enterprise, stock of human capital input, strategic changes made, gender, and life-stage of the enterprise. Goal orientation, especially satisfaction with economic need, and odds of success of the firm are among the most important predictors of equity vs. debt and Internal equity vs. external equity financing. The results suggest that entrepreneurs’ personal characteristics play a key role in capital structure decisions.
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