ESHRAGHI, Farshad (2026) Relationship between entrepreneurial finance and success of High Tech Young Entrepreneurial Firms: the role of funding structure and governance characteristics. Post-Doctoral thesis, University of West London.

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Abstract

High Tech Young Entrepreneurial Firms (HTYEFs) are widely recognised as critical drivers of economic growth and technological advancement. They rely substantially on external equity financing, yet there are gaps in the understanding of how to structure such funding to optimise value creation and innovation outcomes. This thesis presents a quantitative empirical investigation of how external equity funding patterns and resulting governance structures have influenced performance and innovation outcomes in HTYEFs in the UK. Integrating agency theory and signalling theory, this study asks two research questions, using a bespoke governance architecture framework to explore how governance dimensions driven by funding choices—investor heterogeneity, insider ownership, and ownership concentration—impact firm performance and innovation. Drawing on panel data from 400 UK HTYEF for the period 2018 to 2023, the quantitative analysis employs longitudinal regression models to analyse performance outcomes (financial assets and employment growth) and cross-sectional models to interrogate innovation outcomes (patents and IP activity scores). Six hypotheses test competing theoretical mechanisms to determine whether (negative) horizontal agency costs or (positive) credibility signalling benefits dominate in explaining governance-outcome relationships. Findings reveal that investor diversity, lower insider ownership, and dispersed blockholder structures consistently enhance both performance and innovation through complementary resources, knowledge networks, and credibility signals for stakeholders. These governance characteristics support superior employment growth, asset accumulation, and innovation outcomes. Conversely, concentrated ownership structures constrain both performance and innovation through coordination costs and founder entrenchment. The same governance dimensions are consistently associated with superior outcomes across both performance and innovation, suggesting that governance architecture acts as a broad enabler of firm capabilities, even though the underlying mechanisms differ by context. The research advances entrepreneurial finance theory by providing empirical evidence on competing agency and signalling mechanisms, clarifying when agency costs or credibility signalling mechanisms dominate in outcomes for HTYEFs. The findings offer entrepreneurs strategic guidance on governance design and inform investors and policymakers about how governance characteristics influence both growth and innovation capacity. These insights from this research represent an essential contribution to the development of innovative high-tech ventures as they compete for both financial performance and technological advancement within innovation-driven economies.

Item Type:	Thesis (Post-Doctoral)
Identifier:	10.36828/thesis/15307
Subjects:	Business and finance > Business and management > Entrepreneurship
Date Deposited:	09 Sep 2026
Dates:	Date Publication status January 2026 Accepted
School, department or research centre:	Claude Littner Business School
URI:	https://repository.uwl.ac.uk/id/eprint/15307

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