Allan Riding

Women Entrepreneurs and Financial Capital

This work examines gender differences among Canadian small and medium enterprise (SME) owners seeking external financing, including commercial debt, leasing, supplier financing, and equity capital after controlling for size and industry sector. The work also examines potential gender differences in owners’ strategic choices (application rates) and financiers’ evaluative responses (turndown rates). Contrary to previous work that did not control for size and sector of firm, women business owners were equally likely as men to seek all types of external financing, except for external equity capital. Business in which women held majority ownership were significantly less likely to seek equity capital even after controlling for systemic factors. Male and female business owners that do apply for financing were equally likely to obtain capital. When asked the reasons for not seeking financing, the majority of respondents, male and female, specified that financing was not needed. Recommendations about future research are advanced.

Gender, structural factors, and credit terms between Canadian small businesses and financial institutions

This paper reports on an analysis of whether or not the terms of bank credit differ between men and women business owners. Based on a large sample of borrowing experiences, it is found that men and women business owners differ in systemic ways, but that when such differences are taken into account, no differences in the terms of credit persist. In spite of this conclusion, it is found that women small business owners feel themselves to have been treated disrespectfully by lending officers to a significantly greater extent than do male business owners. These findings provide a reconciliation of previous research findings, findings that report both equity of treatment of both genders by financial institutions yet a widespread sense of injustice on the part of women business owners. Implications for the training of loan account managers are developed.

Private investors' investment criteria: Insights from qualitative data

This paper provides an analysis of the acceptance and rejection criteria of private investors using formal qualitative analysis. The findings indicate that private investors view the overall business opportunity and the principals of the company as key criteria in the decision-making process. Active and occasional investors differ somewhat in the emphases that they place on particular criteria. Perhaps the single most important finding, however, is that the reasons that prompt investors to reject opportunities are not simply the converse of reasons that prompt them to invest.

The Role of Angels in Technology SMEs: A Link to Venture Capital

The presence of angels among early-stage financiers of new technology-based firms should improve chances of eventual venture capital financing. Reasons to expect that firms with private investment would have easier access to venture capital are discussed. This study presents findings that support this expectation. A total of 57% of the firms that had received private investor financing had also received financing from institutional venture capitalists; only 10% of firms that had not received angel financing obtained venture capital. Angel investor financing was a significant explanatory variable (among others) of differences between venture capital recipients and firms that had not received venture capital. It would appear that angels help firms to become more ready for future stages of investment by, among other contributions, being closely involved with the firms in which they invest. They usually provide advice and networking opportunities. They also serve on Boards of Directors and Advisors, and provide hands-on assistance and business intelligence. Angels also fulfill an important accreditation role. Overall, this study provides empirical support for the expectation that involvement of angels can substantially increase the attractiveness of firms to institutional venture capitalists.

Gender and Export Propensity

This article draws on theories about the internationalization process of small– and medium–sized enterprises (SMEs) and feminist arguments to explain gender differences in export propensity. Findings are based on a large–scale survey of Canadian SMEs. After controlling for sector, firm, and owner attributes, female majority–owned firms were significantly less likely to export than firms owned by men. The implications for entrepreneurship and feminist theory, export policy, and research are considered.

Business angels and love money investors: segments of the informal market for risk capital

This empirical study reports that returns on informal investments made by business angels are significantly higher than those made by non-angels. However, rates of return on informal investments made by friends and family members of business founders are, on average, dismal. This finding reinforces warnings that it may be counterproductive for public policy to encourage ‘amateur’ informal investors, yet stimulation of value-adding business angel investment seems well advised. The relative sizes, in terms of the annual flow of investment funds, in the main segments comprising the informal market were estimated. Love money accounts for more than three times as much annual investment as business angels, who in turn invest more than twice as much annually – and in many more firms – as institutional venture capitalists.

Growth history, knowledge intensity and capital structure in small firms

This paper explores the financial characteristics of successful Canadian small- and medium-sized enterprises (SME). It asks whether industry membership and early growth history play a role in shaping these financial characteristics. Our study reveals a strong correlation between capital structure and knowledge intensity. In contrast, growth histories are not obvious determinants of financial structure. Results also suggest that leverage strategies are more apparent in low-knowledge industries, in firms with higher expectations of future performance, and in businesses with more balanced financial structures. Industry comparisons are based on production activity and knowledge intensity. Growth distinctions are based on the firms employment and sales history. We evaluate our hypotheses with survey data from a stratified random sample of 2775 Canadian firms. Proportional weighting techniques are utilized in all analyses.

Perceived career challenges and response strategies of women in the advanced technology sector

The objective of this study is to gain a better understanding of the perceived barriers to career advancement specific to women in the advanced technology sectors. Strategies employed in response to perceived barriers are also examined. Empirical results are based on analysis of qualitative data from a sample of 115 women members of Canadian Women in Technology. Personal-, firm- and industry-level barriers to career advancement were documented. The respondents attributed a high proportion of the challenges they encountered to gender. Respondents were most likely to resolve challenges through personal, or ‘do-it-yourself’, solutions. Few cited firm- or industry-related support structures. While mentoring was identified as a frequently used response strategy through which women address career challenges, the majority of firms in the advanced technology sector lack sufficient numbers of suitable women mentors. The lack of mentorship opportunities is particularly acute for women entrepreneurs. The findings are discussed from the context of contradictions between an industry need to attract and retain entrepreneurial talent and respondents’ perceived career barriers. Industry-level remedial strategies are advanced in the form of: a womens mentoring programme; case studies about successful women entrepreneurs and a website to inform women about career advancement strategies. The programmes were designed by the research team to respond to the challenges cited by women and were implemented in cooperation with the trade association as a critical component of an on-going applied research programme.

Networks and linkages among firms and organizations in the Ottawa-region technology cluster

This paper reports on a study of the networking and linkage practices of technology and non-technology firms within the Ottawa cluster. The work seeks to understand how and why particular patterns of networks and linkages evolve and it examines empirically the usage and value of networks and linkages. Previous work argues that technology firms need to be relatively more adept at developing external relationships in order to be successful than do non-technology based companies. This work, however, finds that technology firms exhibit fewer linkages than non-technology based companies do within the Ottawa cluster. The research suggests that the vitality of the Ottawa cluster could be further enhanced through the promotion of additional networking and linkages among regional firms. A key implication for management practice is that CEOs of technology-based firms should work towards establishing and maintaining additional valued relationships.

Banking Experiences Of Canadian Micro-Businesses

Defined as those firms with three or fewer full time employees and annual sales of less than