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1. Introduction
It is widely recognized by researchers, practitioners and policy makers that the new technology intensive entrepreneurial ventures play a crucial role in stimulating economic growth of a nation by facilitating employment generation, income creation and aggregate output (Bala Subrahmanya, 2017; Bellavitis et al., 2017). Yet, these young innovative ventures are often confronted with financial constraints in order to sustain their growth throughout the lifecycle (Fraser et al., 2015; Gilbert et al., 2006; Ho and Wong, 2007). This leads these tech startups to approach and raise finance from various external sources in order to fund their resource requirements. Extant literature has many empirical studies on the individual sources of finance and their characteristics, viz. business angels (BAs), venture capitalists (VCs), banks, private equity (PE), etc. (Ding et al., 2014; Gompers et al., 2016; Shane, 2012). However, there is a dearth of empirical studies which (1) holistically studied diverse sources of finance available for a startup across all the stages of its lifecycle and (2) examined from what sources of finance startups would succeed to obtain finance in a particular stage of its lifecycle.
Moreover, each startup is unique in its own way and thus, the nature and quantum of financial requirements are heterogeneous among these startups (Alvarez and Busenitz, 2001; Alvarez and Barney, 2017). Therefore, the preference and accessibility of each startup to various external financial sources would vary with its nature and quantum of financial requirements. However, it is not clear how the variations in financial requirements would influence the propensity of a tech startup to approach and access a particular source of finance. This paper explores how the financial requirements of a tech startup drive its choice to approach and access a source of finance. We contribute to the literature by inferring that a tech startup's choice of a financial source is driven by its nature of financial requirements primarily human capital (HC), research capital (RC) and social capital (SC). As per our findings, while the HC and SC requirements lead a tech startup to approach growth stage investors, the financial requirement to acquire RC is funded by both early and growth stage investors. This asserts the significance of R&D and innovation for the growth of a...