The importance of the human capital attributes when accessing financial resources

Abstract

During the early stages of business development, access to finance is critically dependent upon the owner. Human capital attributes - including education, experience, and knowledge - have long been argued to be an important resource for accessing finance and spurring growth in entrepreneurial firms. Recognising the importance of demand-side factors of human capital when accessing funding, this study assembles a diverse sample of entrepreneurs in the greater Johannesburg area to determine empirically the relative importance attributed to each human capital variable when accessing funding. Results based on hypotheses testing indicate statistically significant findings and distinct clusters of human capital variables that illustrate the importance of knowledge, education and expertise when accessing funding. The results assist practitioners in understanding how the synergistic effects of knowledge, education and experience are helpful for acquiring financial resources.