The Family Owned Business: Capital Funding

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Abstract
Family owned corporations face unique constraints in their external business environments. One particularly critical external interface exists with sources of capital funding. This paper discusses the advantages and disadvantages which exist in this interface for family enterprises. Based on interviews with 25 family corporation executives, the study concludes that family firms have the advantages of financial privacy, flexibility, and personalized relationships with local bankers. Disadvantages are also identified. This study concludes by offering the family corporation executive some general guidelines regarding financial management, going public, and corporate survival.

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