Capital acquisition remains one of the most challenging and time-consuming activities for small ventures (Ang 1992). This section of the report aims to identify linkages between the literature on entrepreneurial sources of finance and Mr. Eswaran Chandra, the entrepreneur interviewed for the purpose of this report. Several studies have confirmed that the main cause of small firm failure is inadequacy in capitalization. During the interview, Mr.Chandra disclosed that Glide Agency was funded through his own equity, and this source of finance is called bootstrap financing. .
Firms experiencing difficulties in obtaining finance rely on bootstrap financing, which are alternative ways of acquiring capital without the use of traditional sources of finance such as debt and equity financing (Neely and Van-auken 2012). Bootstrapping is the best option to start up entrepreneurial firms and ensure it is in a viable position to consider debt financing from banks or equity financing from external investors during progressing stages of the product life cycle. It relies heavily on the trust, networks, cooperation and effective use of existing resources (Frederick, Kuratko & Hodgetts 2007). .
Small firms commonly rely on personal sources (Savings, friends and family) for the acquisition of capital and this is attributed to the acute informational opacity of these firms (Neely and Van-Auken 2012). Several authors have revealed that the capital acquisition of small firms is determined by the owner's goals and market conditions. During the interview, Mr. Chandra stated the following in regard to funding Glide with his bootstrap financing: "Originally, we started as a partnership, however that ended badly as you learn a significant amount of knowledge after doing business with other individuals. Hence, since then I used my personal equity to fund start up projects and get the operational needs of the business" (Chandra, interview 2015).