Essays on entrepreneurial finance : internationalization and corporate governance

Entrepreneurial firms drive innovation, employment, and economic growth, yet their ambitions usually exceed their internal resources. They need capital to develop products, build an organization, and expand abroad long before they generate cash flows to fund these activities themselves. For these firms, raising capital is never just about money: each source of finance carries a different mix of ownership, incentives, expertise, and control rights. This dissertation examines how the financing of entrepreneurial firms shapes two outcomes central to their development: internationalization and corporate governance. It brings together three complementary studies. The first study is a systematic review of 112 articles published over three decades, connecting the literatures on entrepreneurial finance and international entrepreneurship. The second study compares 602 UK firms that raised equity through crowdfunding with 602 comparable firms that did not, examining how this financing event affects board size. The third study follows 101,202 Italian new ventures for up to five years after incorporation to establish when boards form and how having a board relates to firm growth and survival. The first study shows that research has concentrated on venture capital and exporting, leaving other financing sources and forms of foreign expansion largely unexplored. The second study finds that equity crowdfunding is followed by a lasting increase in board size. Unlike venture capital or private equity investors, equity crowdfunding investors individually hold stakes that are too small to make monitoring worthwhile and are collectively too dispersed to do so effectively. Yet firms still expand their boards. This increase persists when the comparison is limited to firms that raised new capital by other means, indicating that it cannot be explained by the capital injection alone. The effect is strongest in firms without venture capital or private equity investors, whose direct monitoring can otherwise substitute for additional directors. In the third study, boards in Italian new ventures emerge as firms grow larger, older, and more widely owned, but also shortly before firms cease operations. Boards are thus not simply mechanisms intended to improve performance; they are also responses to firms’ existing circumstances. The familiar association between boards and outcomes partly reflects which firms adopt them. Financing decisions are, in this sense, also decisions about who governs the firm and when. By linking entrepreneurial finance to internationalization and board formation, this dissertation offers a more integrated understanding of how young firms are financed and governed, with implications for researchers, entrepreneurs, investors, crowdfunding platforms, and policymakers.