Abstract
Drawing on the family embeddedness perspective, we explore how loans provided by family members, which we term family debt, affect the likelihood of new ventures to achieve profitability. Using a nationally representative sample of US nascent entrepreneurs (PSED II), we find that family debt increases the likelihood of achieving profitability. This positive effect is weaker in case when the new venture was started by an entrepreneurial team, as opposed to a sole founder, and is stronger for younger entrepreneurs. Our study contributes to research on entrepreneur’s family embeddedness, family business, and start-up financing.
Published Version
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