We investigate the role of external financing in influencing firms' start-up size. The
econometric estimates run on a sample of Italian young firms operating in high-tech
industries highlight that bank debt-financed firms are not larger than firms created only
through founders' personal savings, while firms that received external private equity
financing have greater start-up size.

This study determines the role of different modes of financing in shaping firms' startup size
decision. According to the principal hypothesis, the greater the startup's access to bank
loans and external private equity, the larger the startup will be. It is also hypothesized that
the positive impact of external private financing will be greater than the positive impact of
bank financing. Data on 391 new technology-based firms that operate in Italy's
manufacturing and service industries are used to test these hypotheses. Econometric …